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Proposed Appropriations Could Set Back Ag Energy

September 15, 2017
Congress’s proposed cuts for 2018 set back progress in ag energy, progress that serves every state and every sector, writes Lloyd Ritter, Executive Director of the Agriculture Energy Coalition in Biomass Magazine. Ritter argues that these programs merit reauthorization and continued, stable funding.
Farm Bill energy programs have made significant contributions to the U.S. economy, spurring job growth, revitalizing rural economies and leveraging billions of dollars in private investment. Rural America has proven its ability to contribute to energy independence through production of renewable energy and materials, despite challenges across the agricultural sector.

From developments in next-generation biofuels to renewable chemicals to biobased products, the biobased economy is poised for massive growth, and Farm Bill energy programs play a significant role in helping rural America capitalize on those opportunities. These programs deserve to be reauthorized in the next Farm Bill, and fully funded in 2018 appropriations.

The Rural Energy for America Program is a huge success story. The program provides grants and loan guarantees for energy efficiency and renewable energy projects. REAP provides benefits to a broad spectrum of energy technologies, including wind, solar, hydroelectric, geothermal and bioenergy initiatives. Since the 2008 Farm Bill, nearly 13,000 projects in all 50 states have received awards, leveraging more than $3 billion in private investment.

Section 9003, the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program, provides loan guarantees to build cutting-edge biorefineries that produce advanced biofuels and renewable chemicals. This program provides biorefineries access to capital that would otherwise be unavailable in underserved agricultural communities. These facilities create new markets for agriculture, new biobased products and new jobs. The program has helped companies such as Fulcrum, Sapphire Energy, and others secure private financing for biorefinery construction and create jobs in rural areas.

The Biomass Crop Assistance Program helps agricultural producers begin planting new, dedicated energy crops for next-generation biorefineries. This assistance is critical to producers simultaneously developing new supply chains and growing new crops. BCAP could also be used more effectively to remove and utilize forest residues—including hazardous fuels—by clearing out areas at high risk for forest fires. BCAP is the only federal program of its kind, and serves an important purpose in developing new crops dedicated to energy and biomaterial production, and combating forest fires.

And yet, House and Senate appropriators have proposed massive cuts to these vital programs for 2018. The House Appropriations Committee’s draft FY2018 Agricultural Appropriations bill, released end of June, proposed to cut mandatory funding for REAP by 82 percent, from $50 million to $9 million. A late manager’s amendment then sought to further cut the program from $9 million to just $1 million—a staggering 98 percent cut. Similarly, the legislation provided Section 9003 $31 million, but the manager’s amendment later sought to cut funding completely. And, the bill proposed to zero out BCAP.

The Senate Appropriations Committee took less of a heavy hand. Its bill would keep Section 9003’s unexpended funding from prior years, providing $139 million to the program. However, the Senate bill would also cancel BCAP.

At a time when rural America has seen massive challenges—declines in commodity prices have slashed net farm income by 15 percent in 2016, with incomes projected to drop another 9 percent in 2017, according to USDA—the Farm Bill energy programs have supported new investments in rural communities, created jobs and helped boost incomes. Rural America has clearly demonstrated its ability to make major contributions to the biobased and clean energy economy when given the opportunity. Congress’s proposed cuts for 2018 set back progress in ag energy, progress that serves every state and every sector. These programs merit reauthorization and continued, stable funding.