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Johanns outlines administration's farm bill energy proposals

Agriculture.com Staff 03/22/2007 @ 6:55am

Agriculture Secretary Mike Johanns on Wednesday discussed details of the Administration's farm bill proposals during a renewable energy roundtable discussion at Purdue University in Indiana. The proposals would dramatically expand the commitment to renewable fuels in the farm bill, according to a USDA report.

"We heard during our Farm Bill Forums real excitement about renewable energy and our proposals reflect that enthusiasm by providing $1.6 billion in new funding for renewable energy research, development and production -- targeted to cellulosic ethanol, which creates fuel from switchgrass, wood chips and other biomass," said Johanns, after touring a cellulosic research laboratory at Purdue University. "The cellulosic research being conducted is very exciting and I'm confident we are on the right path to meet President Bush's goal to reduce gasoline consumption by 20 percent in ten years. Our proposals will help our nation to expand beyond corn ethanol toward cellulosic ethanol, which could be produced in virtually every state."

The $1.6 billion commitment includes funds to support $2.1 billion in guaranteed loans for cellulosic projects, $500 million for bio-energy and bio-based product research and $500 million for renewable energy systems and energy efficiency grants.

The following renewable energy proposals are contained within the energy, conservation, and rural development titles of the Administration's farm bill proposal:

  • Reauthorize the Renewable Energy Systems and Energy Efficiency Improvements loan guarantee program.
    The administration proposes a loan guarantee program funding level of $210 million, which would support $2.17 billion in guaranteed loans over 10 years. The loan cap for funding cellulosic ethanol projects would increase to $100 million per project, and these cellulosic projects would be exempt from the cap on loan guarantee fees.

    Further, the administration recommends incorporating these programs into Rural Development's Business and Industry Loan and Loan Guarantee Program. Funding would be prioritized for the construction of biorefinery projects in the Business and Industry loan guarantee program.

  • Reauthorize the Renewable Energy Systems and Energy Efficiency Improvements grant program.
    The grant program would be funded at $500 million over 10 years. This program will continue to support smaller alternative energy and energy efficiency projects that directly help farmers, ranchers and rural small businesses. The goals would be consistent with those contained in the Biorefinery Development Grants program, which include providing diversified markets for agricultural and forestry products, increasing the country's energy independence, and enhancing rural development opportunities.
  • Revise the Biomass Research and Development Act of 2000 to increase the annual competitive grant funding for biomass research -- focusing on cellulosic ethanol -- with $150 million in mandatory funding over 10 years.

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