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Vilsack: CCC to make innovative biofuels cost effective

Agriculture Secretary Tom Vilsack said today that he has decided to use the Commodity Credit Corporation to reduce the cost of the feedstocks that the military and the commercial aviation industry will use to pursue new innovations in biofuels technologies and increase production of biofuels.

Tom Vilsack
Tom Vilsack
The Agriculture department “will use the CCC to buy down the cost of the feedstock for both military and commercial purposes,” Vilsack told reporters in call with Navy Secretary Ray Mabus and White House official Heather Zichal announcing that the Obama administration is making new funding available to purse innovations in biotechnologies..

The refineries to make the fuel will most likely be located in rural America, Vilsack said.

Ray Mabus
Ray Mabus
Mabus said that the administration is using authority under the 1950 Defense Production Act to boost industries that are considered critical to national security. Under the new program, companies will apply to the government for a total of $30 million in matching grants to develop the commercial-scale advanced drop-in biofuels, and when they need raw materials to develop the fuels the CCC will help them buy them.

Vilsack has allocated $171 million for the project, a spokeswoman said. The amount of money that will be used will depend on the applications the government receives, she added. Once the projects have been identified, the Defense Department will have access to the money until the $171 million is spent, she also said.

Heather Zichal
Heather Zichal
Zichal, deputy assistant to the president for energy and climate change, said that the announcement is part of the Obama administration’s “all-of-the-above energy plan” to reduce oil imports by one-third by 2025. Vilsack also said that the projects resulted from the White House Rural Council that he encouraged President Barack Obama to set up.

The CCC Charter Act, which dates to the 1930s, provides the USDA a line of credit at the Treasury to be used to enhance agricultural production.

The act also authorizes the sale of agricultural commodities to other government agencies and to foreign governments and the donation of food to domestic, foreign, or international relief agencies. CCC also assists in the development of new domestic and foreign markets and marketing facilities for agricultural commodities.

Mabus said the money for the project comes from 2012 appropriations and Vilsack noted that CCC authority does not depend on appropriations.