USDA Announces Additional 9,000 Acres for Non-Food Energy Crop Production

WASHINGTON, June 13, 2012—Agriculture Secretary Tom Vilsack announced today $9.6 million for the creation of two new Biomass Crop Assistance Program (BCAP) project areas in New York and North Carolina, and the expansion of an already established BCAP project area in Arkansas. The announcement provides the opportunity to expand the nation's non-food, energy crops used in the manufacturing of liquid biofuels and to help meet state mandated Renewal Portfolio Standards (RPS).

"Increasing the production of renewable, home-grown fuels is vital to reducing our country's reliance on foreign oil, while creating good-paying jobs and diversifying the agriculture economy," said Vilsack. "These projects are the foundation for an even stronger energy future in rural America. Because most energy crops are perennial and take time to mature before harvest, BCAP is designed so that sufficient quantities of feedstock will be available to meet future demand. Most importantly: these crops can grow where other crops cannot, providing farmers with new opportunities to diversify into more markets."

USDA's Farm Service Agency (FSA) administers BCAP. BCAP, created in the 2008 Farm Bill, helps farmers and forest land owners with start-up costs of planting new energy crops that can take several years to reach maturity until harvest, a timeline designed to parallel the construction schedule of commercial-scale energy facilities that will use these crops. BCAP is the only federal program that ensures sufficient biomass is available to reduce U.S. reliance on foreign oil, improve domestic energy security, reduce pollution and spur rural economic development and job creation.

One of the two new BCAP project areas is sponsored by Chemtex International Inc., targeted for the heart of North Carolina, where it will grow more than 4,000 acres of Freedom® Giant Miscanthus and switch grass. The crop production will support Chemtex's Project Alpha, a cellulosic biorefinery with an expected annual production of 20 million gallons of bioethanol and downstream sustainable chemicals, as well as onsite biogas for power generation. Project Alpha expects to create 65 direct jobs and 250 indirect jobs. The crop propagations, planting and mitigation and monitoring plan for Freedom® Giant Miscanthus, a crop based on strains developed by Mississippi State University, will be coordinated by REPREVE Renewables LLC. REPREVE Renewables, based in Georgia, also is the sponsor of the project's accompanying environmental assessment. Enrolled producers will receive establishment assistance and five years of annual production support under BCAP.

The second new BCAP project area ramps up efforts in upstate New York to meet the state's goal of sourcing 24 percent of electric and power generation from renewables by 2013. The BCAP project area, sponsored by ReEnergy Holdings LLC, seeks to enroll up to 3,500 acres in fast growing shrub willow to generate more than 100 megawatts of electricity. ReEnergy Holdings LLC, has three committed facilities dedicated to purchasing from growers in the project area. This project complements USDA's Wood-to-Energy Initiative; it seeks to build a forest restoration economy by integrating energy feedstock within the larger forest products sector to sustain rural jobs and prosperity. The project area dedication is expected, according to industry estimates, to create 144 jobs — direct and indirect — and support these shrub willow establishments over the course of 11 years. Outreach for this Area will include access to the region's "Come Farm With Us" campaign, which targets new & beginning farmers and the St. Regis Mohawk reservation located 15 miles from one of the committed facilities.

Additionally, BCAP Project Area 2 in northeast Arkansas will expand its area within three counties, bringing enrollment up to nearly 8,000 acres of Giant Miscanthus. This Arkansas BCAP project area is sponsored by MFA Oil Biomass LLC, in Columbia, Mo. MFA Oil Biomass and partner Aloterra Energy LLC, operating in Ohio, will continue to coordinate the crop propagations, planting and mitigation and monitoring plan. These crops support the expected production of fuel pellets for export and in-farm heating and biobased packaging. MFA Oil Biomass and Aloterra Energy are predominantly locally owned and have sponsored three additional BCAP projects in Missouri, Ohio and Pennsylvania, investing more than $6 million in the operation. Continuing enrollments in this project area will contribute to an industry-estimate of 750 new jobs, indirect and direct, to be created.

On Nov. 18, 2011, Congress enacted the Consolidated and Further Continuing Appropriations Act, 2012, limiting the total amount of funding available for BCAP to $17 million, a reduction of 96 percent from funding levels available last spring.

"The Renewable Fuels Standard calls for 20 billion gallons more in just 10 years, but without using corn starch," said FSA Administrator Bruce Nelson. "Many states have also implemented Renewable Electricity Standards to encourage more biomass for heat and power. That's why BCAP is so important. It provides the risk management tools necessary for farmers and forest landowners to begin growing non-food, dedicated energy crops."

Producers in these 28 counties throughout Arkansas, North Carolina and New York who voluntarily sign up and enter into BCAP contracts are eligible for reimbursements of up to 75 percent of the establishment costs of the perennial energy crop, and up to five years of annual maintenance payments for herbaceous crops and up to 11 years for woody crops.

USDA selected nine project areas in FY 2011, which resulted in the approval of more than 860 producer contracts to grow camelina, hybrid poplar, warm season grasses and giant miscanthus on almost 50,000 enrolled acres in project areas covering 168 counties in 10 states: Arkansas, California, Kansas, Missouri, Montana, Ohio, Oklahoma, Oregon, Pennsylvania and Washington. These crops, such as switchgrass, hybrid poplar and giant miscanthus, are the first-ever national investments in expanding U.S. biomass resources to meet domestic energy security. The total investment in those projects is estimated to be $55 million.

The sign-up period for the New York, North Carolina and Arkansas project areas will begin June 18, 2012. The deadline to sign up for the project areas is Friday, Sept. 14, 2012. FSA, administering the program on behalf of the Commodity Credit Corporation with conservation planning assistance from the Natural Resources Conservation Service and other partners, will enter into contracts with landowners and operators in these project areas. Producers interested in participating in the project areas should visit their local FSA county office. Information about BCAP may be found at http://www.fsa.usda.gov/bcap [ http://www.fsa.usda.gov/bcap ].

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.