BCAP: Consider It a Holliday Wish Come True

Posted by Tanya Brown, Farm Service Agency, Public Affairs Specialist, on March 28, 2012 at 11:03 AM

Chris Holliday has more pastureland than he needs for his cows—335 acres to be exact. So when USDA introduced a way to use that land to help create clean energy while reducing U.S. dependence on foreign oil, he saw it as an opportunity.

“I thought it was a good idea and I had a good feeling about it,” said Holliday, owner of Holliday Investment in Prairie Home, Mo. He is one of several farmers that signed up acreage in the Biomass Crop Assistance Program, or BCAP, last year. All 335 acres will be used to plant Miscanthus, a giant perennial grass that can be processed into a biofuel.

The USDA incentive greatly reduces farmers’ expenses to finance the planting, harvesting and delivery of the Miscanthus for processing. BCAP pays farmers up to 75 percent of the planting costs and offers an annual rental payment while producers wait for the crop to mature, which takes about three years.

Eric Allphin, an agronomist for MFA Oil, travels throughout Missouri and Arkansas offering advice on the best methods to grow the crop. “I give advice on initial fertilizer rates, field preparation and planting,” said Allphin. He also helps educate the public by dispelling the myth that Miscanthus is an invasive perennial.

“People who think it is invasive don’t know a lot about the crop,” said Allphin. Miscanthus is a sterile crop that doesn’t produce seeds that can be blown away by the wind or carried by birds. “It’s less invasive than its native species,” he said.

For Holliday, the crop is a win-win situation.

“I wouldn’t have put up the upfront costs to do this if it were not for the BCAP program. The government took the risk out of it and made it easier,” he said. “There really is no downside and I like doing new things. If it helps lower the price of gas and oil, then I’m all for it.”

Holliday signed up for the program through MFA Oil Biomass—a partnership between Aloterra Energy and MFA Oil. “FSA picked a good company to work with,” said Holliday. “Farmers know and trust MFA.”

The company manages three project areas in Missouri, Arkansas and a portion of Pennsylvania. This spring, the company expects to plant 6,588 acres of Miscanthus, including the 335 acres on Holliday’s farm.

BCAP is an important element of our national energy strategy to address high fuel prices and reduce reliance on petroleum. To create jobs in rural communities, drive economic growth, and help reduce our dependence on foreign oil, USDA is aggressively pursuing investments in renewable energy, investing in or making payments to over 5,700 renewable energy and energy efficiency improvement projects. More than 130 biodiesel and ethanol projects funded by USDA are currently producing almost 3.7 billion gallons of biodiesel and ethanol annually, enough fuel – in equivalence to gasoline – to keep five million vehicles on the road every year. In addition, USDA provided financial assistance for blender fuel pumps so drivers can pump fuels with higher ethanol mix into their gas tanks. This year, these programs provided financial assistance to help support nearly 250 blender fuel pumps.

The Energy Behind Alternative Energy

Posted by Tanya Brown, Farm Service Agency, Public Affairs Specialist, on March 27, 2012 at 12:00 PM

The Biomass Crop Assistance Program, or BCAP, is still in its infancy, but its potential success has producers and businesses wanting more.

“We have people on a waiting list,” said Tim Wooldridge, Arkansas project manager with MFA Oil Biomass. MFA was selected by USDA to manage three of nine project areas in fiscal year 2011. Each project area was awarded federal funding to provide incentives to farmers to grow non-food crops that can be processed into biofuels. “Our initial target in the Arkansas project was 5,000 acres, which we surpassed in signing up 6,588 acres. We now have 1,500 acres on a waitlist. We could easily get another 6,000.”

Those 6,588 acres will be planted this spring with Miscanthus, a perennial grass that can be dried and compressed into fuel pellets. These pellets will work toward President Obama’s goal of increased energy independence by decreasing U.S. dependence on foreign oil. The harvesting and processing of the grass will have an economic impact on communities by creating jobs.

This photo shows giant miscanthus (measuring seven feet tall). Photo courtesy of NRCS

“It has been a phenomenal success in Arkansas,” said Wooldridge. “I receive calls daily from farmers hoping that we expand.”

Scott Coye-Huhn, senior vice president of corporate development and chief legal officer of Aloterra Energy LLC, mirrors that sentiment. Aloterra Energy manages four project areas — three of which are through the MFA Oil Biomass partnership — in Ohio, Missouri, Arkansas and a portion of Pennsylvania.

Coye-Huhn said it took a lot of hard work and long hours to initially educate farmers about BCAP and how it will help the community. But once it took hold, producers jumped at the chance to participate.

“It has exceeded our expectations. We are surprised at the number of ideas and spin offs that [BCAP] has created. It is really exciting.”

Aloterra also has a waitlist, and together the two companies have hired more than 100 employees to plant Miscanthus on 18,000 acres in the four project areas. Aloterra and MFA Oil Biomass expect to grow each project area to 50,000 acres, which will produce 2.4 million tons of biomass per year.

“To put these initial 18,000 acres into oil and gas terms, they can produce a reserve of 10,000,000 barrels of liquid fuels.  At full maturity, these projects will be ten times larger and will have a real impact on our fuel supplies.”

According to Coye-Huhn, based on a third party projection, the BCAP project is expected to produce 3,600 new jobs in all four project areas, which will have a $200 million economic impact.

USDA is currently accepting applications for the next round of BCAP project areas. For more information, visit http://www.fsa.usda.gov/bcap.

BCAP, administered by USDA’s Farm Service Agency (FSA), is an important element of our national energy strategy to address high fuel prices and reduce reliance on petroleum. To create jobs in rural communities, drive economic growth, and help reduce our dependence on foreign oil, USDA is aggressively pursuing investments in renewable energy, investing in or making payments to over 5,700 renewable energy and energy efficiency improvement projects. More than 130 biodiesel and ethanol projects funded by USDA are currently producing almost 3.7 billion gallons of biodiesel and ethanol annually, enough fuel – in equivalence to gasoline – to keep five million vehicles on the road every year. In addition, USDA provided financial assistance for blender fuel pumps so drivers can pump fuels with higher ethanol mix into their gas tanks. This year, these programs provided financial assistance to help support nearly 250 blender fuel pumps.

USDA Announces Funding for Two Renewable Energy Programs

News release from the USDA:


USDA Announces Funding for Two Renewable Energy Programs
 
WASHINGTON, Feb. 3, 2012 — Agriculture Secretary Tom Vilsack today announced the availability of funds for Fiscal Year 2012 for two key programs to encourage the use of renewable biomass and production of advanced biofuels. About $25 million will be made available through each program.

"President Obama has laid out a new era for American energy—an economy fueled by homegrown and alternative energy sources that will be designed and produced by American workers," said Vilsack. "These programs support that vision by helping biorefineries use renewable biomass as a replacement fuel source for fossil fuels and supporting advanced biofuel producers as they expand production."

The Repowering Assistance Program provides approximately $25 million in funding to biorefineries that have been in existence on or before June 18, 2008. The purpose of the program is to provide a financial incentive to biorefineries to use renewable biomass in place of fossil fuels used to produce heat or power. By providing this assistance, USDA is helping these facilities install new systems that use renewable biomass.

The amount of the payment will be based on (1) the cost effectiveness of the renewable biomass system; and (2) the percentage reduction in fossil fuels used by that biorefinery. The maximum amount an individual biorefinery can receive under the Notice is 50 percent of total eligible project costs up to a maximum of $10 million.

Eligible costs must be related to construction or repowering improvements, such as engineering design, equipment installation and professional fees. The application deadline for this program to receive funds for Fiscal Year 2012 is June 1, 2012. For additional details, please see pages 5232 through 5234 of the February 2, 2012, Federal Register, or go to http://www.gpo.gov/fdsys/pkg/FR-2012-02-02/pdf/2012-2244.pdf.

USDA also announced the availability of up to $25 million to make payments to advanced biofuels producers who expect to produce eligible advanced biofuels at any time during Fiscal Year 2012. To be eligible for these funds, an advanced biofuels producers must have enrolled in the program by October 31, 2011, even if the producer has an existing contract with the Agency.

Payments will be made to producers of advanced biofuels derived from renewable biomass, other than corn kernel starch. These include cellulose, sugar and starch, crop residue, vegetative waste material, animal waste, food and yard waste, vegetable oil, animal fat, and biogas.

Contract payments will be made quarterly. For additional details, please see pages 5229 through 5232 of the February 2, 2012, Federal Register, or go to http://www.gpo.gov/fdsys/pkg/FR-2012-02-02/pdf/2012-2240.pdf.

Both of the programs referenced in the Federal Register are important parts of achieving the Obama Administration goal to increase biofuels production and use.

The Obama Administration is working to promote domestic production of renewable energy to create jobs, reduce our dependence on foreign oil, reduce emissions, and build a stronger rural economy. Today, Americans import just over half of our transportation fuels – down from 60 percent when President Obama took office – but we can do more to meet the President's goal of reducing our net fuel imports by one-third by 2025. At Secretary Vilsack's direction, USDA is working to develop the national biofuels industry by producing energy from non-food sources in every region of the country. We are conducting and encouraging research into innovative new energy technologies and processes, helping companies build biorefineries – including the first ever commercial-scale cellulosic biofuel facilities – and supporting farmers, ranchers, and businesses taking risks to pursue new opportunities in biofuels. Along with Federal partners, we're establishing an aviation biofuels economy, and have expedited rules and efforts to promote production and commercialization of biofuels.

USDA, through its Rural Development mission area, administers and manages housing, business and community infrastructure and facility programs through a national network of state and local offices. Rural Development has an active portfolio of more than $165 billion in affordable loans and loan guarantees. These programs are designed to improve the economic stability of rural communities, businesses, residents, farmers and ranchers and improve the quality of life in rural America.

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