Source: MEATINGPLACE, 10/31/11

Companies trying to commercialize the production of ethanol from biomass are urging leaders of the agriculture committees in Congress to seek extension of the federal loan guarantee and grant programs that have supported the initial development of the industry.

“We look forward to thinking creatively with you about comprehensive solutions that cut cost but continue to provide meaningful value to an emerging advanced ethanol industry,” said a letter from the Advanced Ethanol Council (AEC) to the chairmen and ranking minority members of the House and Senate agriculture committees.

The committees are racing to get key points of the federal Farm Bill program to the congressional Joint Select Committee on Deficit Reduction – the “Supercommittee” – before that panel recommends federal spending cuts. The agriculture leaders are bracing for spending cuts, and interest groups are trying to shield their favorite programs.

“We are currently finalizing the policies that would achieve $23 billion in deficit reduction and will provide a complete legislative package by November 1, 2011,” said a letter to the Supercommittee signed by Sens. Debbie Stabenow (D-Mich.) and Pat Roberts (R-Kan.), chairman and ranking member, respectively of the Senate Agriculture Committee, and Reps. Frank Lucas (R-Okla.) and Collin Peterson (D-Minn.), chairman and ranking member in the House.

AEC represents companies including Coskata, Inc., which in January received a loan guarantee of $250 million from the U.S. Department of Agriculture to build a plant in Alabama. Other AEC member companies received over $150 million in loan guarantees at the same time.

In a letter signed by AEC Executive Director R. Brooke Coleman, the group urged the Congressional agriculture leaders to:
• Extend USDA’s biorefinery loan guarantee program for biorefinery projects and “improve critical provisions of the program to more effectively facilitate participation by lending institutions.”
• Extend USDA’s Rural Energy for America Program (REAP), which awards grants to small business for project such as installation of the “blender pumps” needed to dispense gasoline with more than 10 percent ethanol. “This will facilitate market access that is critical to the ongoing development and deployment of advanced ethanol fuels,” the letter said.
• Reform the Biomass Crop Assistance Program (BCAP) to increase cost effectiveness and encourage and energy crop production. BCAP provides matching payments for biomass purchased from producers by bioenergy facilities.

Meanwhile, a House bill that would reduce the federal ethanol mandate when corn supplies are tight has picked up four more sponsors, bringing to 28 the number of House members publicly supporting the bill. The Renewable Fuel Standard Flexibility Act (H.R. 3097), introduced by Reps. Bob Goodlatte (R-Va.) and Jim Costa (D-Calif.) would require the Environmental Protection Agency to reduce the mandate by as much as 50 percent if corn stocks fall below five percent of expected use.

Meatpacking and poultry processing organizations strongly support the bill.

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