Introduction and Background
Good morning Chairman Thompson, Ranking
Member Holden, and other members of the Subcommittee. Thank you very much for
providing me the opportunity to testify here this morning. My name is Ryan
Stroschein and I am co-director of the Agriculture Energy Coalition. The
Coalition is a diverse and dynamic group of renewable energy, energy
efficiency, agriculture, environmental and rural development organizations, and
private companies that represent a very broad spectrum of renewable
electricity, energy efficiency, advanced biofuel, biopower and bioproduct
interests. This Coalition has come together, in part, to support the important
energy programs contained in the Farm Bill, to urge continuation of meaningful
funding for these programs, and to promote policy changes that will make them
even more effective.
Renewing and funding these successful
programs, which work in partnership with our nation's farmers, ranchers, rural
small businesses and innovative energy entrepreneurs, will continue to leverage
hundreds of millions of additional dollars in private investment for these
industries and is vital to the commercialization of renewable energy, energy
efficiency and bio-based products.
Across the country, we've seen some early
successes from these initiatives. First-of-their-kind biorefineries will soon
start producing advanced biofuels in Florida and elsewhere; wind turbines are
powering farms, ranches and rural businesses from Maine to California; solar
systems are being used for various on-farm or business purposes, including to
lower irrigation costs in dozens of states; and biobased products such as
bioplastics and solvents are being produced in states like Michigan, Iowa and
Ohio for industrial applications.
The Senate Agriculture Committee recently
agreed that these are worthwhile investments to make. In April they adopted a
bi-partisan farm bill that maintains modest and necessary mandatory funding and
makes improvements to several core energy title programs. The Ag Energy
Coalition supports these efforts and believes that the final Farm Bill should
include these minimum investments to preserve and grow ag energy jobs across
the U.S.
A Track Record of Accomplishment for the
Energy Title
The 2002 and 2008 Farm Bills recognized the
potential of Rural America to deliver clean, domestic, renewable energy, energy
efficiency and bio-products, and provided significant resources for their
development across a broad spectrum of technologies in all regions of the
country. These foundational policies have transformed the promise of an
emerging clean, renewable, sustainable rural energy sector into a growing
reality. A continued commitment to these goals will accelerate this momentum
and is a vital component of the "all-of-the-above" national energy
strategy that has broad bipartisan support in this Congress.
Conversely, without an ongoing commitment to
these goals, our world leadership in energy innovation will be fleeting and the
U.S. will lose ground to international competitors. Other countries are poised
to catapult ahead of the U.S. in the global race to commercialize clean energy
technology, and those jobs will go with them. This would undermine our
economic, energy, environmental and national security and could put the U.S. in
the position of purchasing and importing these technologies from foreign
companies and nations in the years ahead.
The core energy title and risk management
directives of the existing Farm Bill perform many functions vital to the
continued and accelerated development of the emerging clean technology
industry. They provide:
* Loan guarantees and grants to fund new
biorefineries in every region of the country that utilize diverse local
feedstocks, accelerate commercialization of innovative technologies and the
development of new advanced biofuels, renewable chemicals, and bio-products;
* Labeling and incentives to speed the
development of a U.S. renewable chemicals and bio-based products industry;
* Assistance in improving the energy
efficiency of farms and rural businesses to cut input costs and boost producer
margins;
* Incentives to install distributed renewable
energy systems that benefit every agricultural sector, including wind, solar,
geothermal and biogas;
* Support for developing perennial energy
crops grown to benefit both agricultural producers and the environment;
* Research and development funding for
biomass feedstocks and renewable chemical technologies;
* Funding to promote the installation of
energy systems that use biomass for heat and power; and
* Crop insurance and risk management tools
that agricultural producers can use to mitigate the risks of growing new energy
crops.
Economic Impact: Jobs, Increased Rural
Income, New Business Opportunities
American agriculture is the key to the
successful development and commercialization of clean, abundant, renewable,
domestic energy and biobased products in this country, and the "core"
Farm Bill energy programs provide American farmers, ranchers and entrepreneurs
with the tools they need to make it happen. This can be a game-changer for
rural economies across the country, with the potential to create hundreds of
thousands of energy-jobs over the coming years.
Although relatively new, the Farm Bill energy
programs already have had a tremendous positive impact on economic and job
growth in rural America, and they can do so much more. USDA estimates that the
BCAP and Biorefinery Assistance programs alone have the potential to create
more than 700,000 new jobs as a result of increased cellulosic feedstock
production and the construction and operation of new biorefineries.
Furthermore, based on a survey of companies that could potentially qualify for
the Biobased Markets Program, it is estimated that that program could create an
additional 100,000 American jobs in the coming years.
Despite the fact that the 2008 Farm Bill
allocated only 0.7 percent of its total funding for energy, these programs have
been very successful. Many new feedstocks, processes, fuels and technologies
are on the cusp of successful commercialization as a result. The impact of
these investments is broad, with projects in all 50 states, and outsized relative
to the total dollar amount allocated because the programs are targeted.
Moreover, they leverage much more in state and private sector investments than
would ever be possible without them.
These programs also will help us keep energy
dollars here at home where they have a significant multiplier effect, both in
terms of economic development and job creation. This is clearly a 'win-win'
approach to meeting our nation's economic and energy security challenges.
If the Federal government retreats from its
commitment to clean energy, in the Farm Bill and elsewhere, the U.S. will risk
losing even more ground to China, Europe, India, Brazil, and other proactive
nations, and the new manufacturing jobs, industries and revenue this sector is
going to generate in the coming decades will migrate overseas. A clean energy
future provides domestic economic growth and jobs and improves national
security and environmental quality. Everyone stands to benefit if we maintain
this commitment. The U.S. is a nation rich in renewable resources with core
strengths in industrial biotechnology, agriculture and chemical manufacturing,
among other competencies. For these reasons, it makes competitive and economic
sense for the U.S. to make the investments necessary to keep it at the vanguard
of global renewable energy, energy efficiency and bioproduct development.
Key Programs for Clean, Ag-based Energy Jobs
The suite of programs contained in the energy
title covers the entire renewable energy, energy efficiency and bioproducts
landscape. Wind power works very well throughout the U.S. and especially in the
Midwest, West, and offshore, solar works well across the country and in
particular the South and West, biogas potential is huge in dairy, livestock and
food processing states, bioproduct manufacturing will develop near industrial
hubs and significant biomass exists almost everywhere. In other words, every
State will benefit because these programs allow them to exploit their
individual, inherent resource bases.
The Coalition believes that the following
programs are the most important initiatives in the energy title of the Farm
Bill and have focused on their reauthorization and funding:
Rural Energy for America Program
The Rural Energy for America Program provides
grants and loan guarantees for energy efficiency and renewable energy projects
as well as support for feasibility studies and energy technical assistance. Of
all the Farm Bill energy programs, REAP provides benefits to the broadest
spectrum of energy technologies, including the installation of wind, solar and
biogas energy systems, biofuels infrastructure and energy efficiency
initiatives throughout rural America. These programs also promote distributed
generation - clean, decentralized energy production that promotes energy security
and relieves pressure on our national energy grid. Energy efficiency boosts
producer margins by cutting input costs for the long term and creates jobs in
rural America. USDA estimates that REAP saved or created 15,000 jobs between
2009 and 2011.
Biomass Crop Assistance Program
The Biomass Crop Assistance Program (BCAP) is
the only federal program that assists producers who seek to grow, harvest,
store and deliver dedicated energy crops to eligible next-generation
biorefineries and is the only program that assists in the collection, harvest,
storage and delivery of the biomass to electric generating facilities. Without
this program, the agricultural community is reluctant to embrace these crops
and forest residues due to the risk involved. Farmers and others in rural areas
are bullish on renewable energy development but energy crops are unfamiliar to
producers, lenders and insurers of these crops, and they enjoy almost none of
the safety net components afforded traditional "farm program" crops. These
crops can also be grown to improve soil conservation and water quality
practices. In addition BCAP's promotion of utilizing woody biomass supports
healthy forests and contributes to rural economies.
Biorefinery Assistance Program
The Biorefinery Assistance Program promotes
the construction of the new infrastructure needed to manufacture cutting-edge
new biofuels. Only commercial-scale biorefineries that produce advanced
biofuels and bioproducts derived from renewable biomass are eligible for the
program. Given the challenges borrowers in all industries have faced in
accessing credit markets in recent years, it is no surprise that developers of
next-generation, first-of-their-kind biorefineries have faced difficulties in
finding private credit to fund the construction of these new facilities.
Government loan guarantees are extremely valuable in economic conditions such
as these because they allow promising new technologies to advance while
leveraging significant private lending and investment that would otherwise remain
on the sidelines.
Biobased Markets Program
The Biobased Markets Program enables
qualifying bio-based products to receive a "bio-based" label, and
uses federal purchasing power to build new markets. To date, USDA has
designated a total of 77 categories and 10,000 products and it continues to
expand that list.
On May 1 of this year, Agriculture Secretary
Vilsack announced new, expanded proposed guidelines for the USDA program that
would allow for the designation of intermediate ingredients such as fibers,
resins, and chemicals so that the products made from them could more easily be
designated for preferred Federal procurement. This inexpensive program has
served as a vital springboard for the emerging bio-based products industry and
it will continue to drive innovation and expansion of the industry if it is
reauthorized and funded.
Conclusion
Rural America has been at the epicenter of
our nation's burgeoning new renewable energy and bioproducts industries, and
farmers, ranchers, rural small businesses and rural economies have already
begun to realize the benefits. American agriculture, and the rural communities
it supports, have demonstrated that they have the vision, entrepreneurialism,
optimism, and tenacity to continue to develop these important and lucrative new
industries if provided the tools to do so.
And the progress that has been made to date
really is really just the tip of the iceberg. If we continue our national
investments and policy commitments in these areas, the economic and job growth
that will follow will exceed what we've already experienced. As we all hear
from business over and over again, resource and policy certainty are critical
for sustained growth and innovation.
Continuing these vital Farm Bill energy title
programs will promote the protection and expansion of American ag energy jobs,
drive innovation, develop cutting-edge technology we can export to the world,
provide meaningful benefits to the environment, enhance national security, and
ensure that we continue to lead the world in the development of these vital and
lucrative new industries. For these reasons, we urge this panel, and this
Congress, to reauthorize these vital energy programs and provide them with
mandatory funding through the life of the next Farm Bill.
Thank you and I look forward to your
questions.
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