The Hagstrom Report

Agriculture News As It Happens

Vilsack announces four more BCAP contracts

One day after the Environmental Protection Agency announced it would lower the goal for cellulosic ethanol use in the nation’s energy supply because there is not enough available, Agriculture Secretary Tom Vilsack declared his faith in cellulosic energy, and announced $45 million in federal contracts for four additional Biomass Crop Assistance Program (BCAP) project areas in six states to expand the availability of non-food crops to be used in the manufacturing of liquid biofuels.

EPA announced Monday that for the second year in a row it was cutting the amount of cellulosic ethanol that must be mixed into motor fuel, Reuters reported. In 2012, only 3.45 million to 12.9 million gallons of cellulosic biofuel will have to be mixed into the country's gasoline pool by fuel blenders, far below the original goal of 500 million gallons, Reuters said. Congress and EPA have both expressed faith in cellulosic fuels, but the technology has been slow to develop.

Vilsack said in a media briefing today that he has “full faith and confidence in the capacity of the United States” to develop a variety of alternative energy sources that will create jobs in rural America and avoid dependence on foreign oil in the long term. And even though the House of Representatives has cut funding for BCAP in its 2012 Agriculture appropriations bill, Vilsack said that USDA has the resources to fulfill the contracts announced today and will work with the Senate to try to continue additional funding for BCAP in 2012.

The four project areas set aside acres in California, Kansas, Montana, Oklahoma, Oregon and Washington for the production of renewable energy crops. Two of the new BCAP project areas, targeted for California, Montana, Washington and Oregon, will grow camelina, an oilseed, in rotation with wheat on marginally productive land.

Biofuel from camelina is an ideal jet fuel substitute, Vilsack said, noting that the announcement of these projects coincides with the first anniversary of a joint announcement by USDA, the Boeing Corporation and the Air Transportation Association on an initiative to bring sustainable and renewable aviation fuels to the marketplace. The project has a target of 51,000 acres. The sponsors are Beaver Biodiesel, LLC and AltAir Fuels LLC. The project areas are near biomass conversion facilities in Bakersfield, Calif.; Tacoma, Wash., and Albany, Ore.

Another BCAP project area, part of an effort sponsored by cellulosic biofuels company ZeaChem, will encourage growth of hybrid poplar trees in Oregon. The goal is to enroll up to 7,000 acres. This project is part of a series of measures that comprise USDA’s Wood-to-Energy Initiative. It seeks to build a forest restoration economy by integrating energy feedstock within the larger forest products sector to sustain rural jobs and prosperity. The project area surrounds a biomass conversion facility in Boardman, Ore.

Additionally, a BCAP project area in Kansas and Oklahoma, sponsored by Abengoa Biofuels, has been designated to grow up to 20,000 acres of switchgrass. The project area surrounds the future facility's biomass conversion facility in Hugoton, Kan.

Producers who enter into BCAP contracts are eligible for reimbursements of up to 75 percent of the establishment costs of the perennial energy crop, and up to five years of annual maintenance payments for herbaceous crops and up to 15 years for woody crops.

According to industry estimates, more than 3,400 jobs in the biorefinery, agriculture and supporting sectors will be created due to these new BCAP project areas, with more than 2 million gallons annually of biofuels manufactured when full production levels are achieved, USDA said in a news release.

Biomass Crop Assistance Program