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Nebraska's Senator Ben Nelson and South Dakota Senator John Thune today announced that they are introducing legislation to promote the development and production of celluosic ethanol.
"Celluosic ethanol has always faced a chicken-or-the-egg problem: it's difficult to start commercial production without a guaranteed supply of biomass, but it's hard to encourage farmers to grow the biomass unless they know they'll have a market," said Nelson. "This legislation will help resolve that problem by encouraging the construction of biofuel facilities while simultaneously pushing the production of biomass."
"Cellulosic ethanol has incredible potential to supplement corn-based ethanol. But if cellulosic ethanol is to achieve its potential, it is critical that Congress help this industry overcome initial market barriers. This legislation would spur the construction of biorefineries across the country and provide incentives to farmers in surrounding areas to grow energy dedicated crops that can eventually supply these biorefineries in a cost-effective, environment-friendly way," Thune said. "If we are going to be serious in this country about reducing our dependence on foreign oil, we have to be serious about giving the necessary jumpstart to America's budding alternative fuels industry and the farmers who supply it, so they can transform this infant industry into the future answer to America's energy needs."
The legislation, the Biofuels Innovation Program Act of 2007, seeks to help advance our biofuels production and move us closer to capturing the potential of cellulosic ethanol production. The bill provides business planning and assistance matching grants of up to $30,000 for entities and communities interested in developing a project area for producers to begin producing dedicated energy and biomass crops, as well as for attracting or creating a cellulosic biofuels facility. The grant applicants would be required to submit a proposal that identifies eligible cropland and indicates that the area has a strong likelihood for producing biomass for energy. The proposals would have to include a letter of commitment from an existing or proposed biofuels production facility to use the feedstock for producing biofuels or other energy.
Once the grant is approved, the areas around the plant (within a 75 mile radius) would be classified as Biofuels Innovations Program (BIP) Project Areas, making them eligible for transitional assistance for the production of biomass feedstock. The assistance would be provided in the form of a percentage of the establishment cost incurred by a producer to plant and grow a biomass crop, as well as yearly rental payments on the land that is growing the biomass crop for the first five years of the BIP contract. This will help producers get energy and biomass crops established and growing at the same time that the cellulosic biofuel plant is being built so that the feedstock will be ready when the biofuel plant needs it. Finally, the bill provides optional transitional assistance in the form of a matching payment to producers for the purchase of the biomass by the biofuel facility. This provision will help create a market for the biomass.
"While the grants help get biofuel plants up and running, assistance will be given to area producers to transition to biomass development," said Nelson. "We'll be pushing both areas of development along the same track, providing a boost for the new fuel site and encouraging further development of domestic energy supplies. Celluosic ethanol has shown great potential, but faced significant hurdles. Our bill will help clear the hurdles and encourage widespread development of biofuel plants."
"On behalf of the American Coalition for Ethanol (ACE), I applaud Senators Thune and Nelson for developing a forward-thinking initiative that takes a balanced and sustainable approach to provide land owners with the financial and technical means to plant, harvest, store, and transport biomass feedstocks for ethanol production. I encourage Members of Congress to include an innovative program such as this in the 2007 Farm Bill," said Brian Jennings, Executive Vice President. "While important gains are being made in the cellulosic ethanol production process, it is critically important to place an equal amount of focus on the feedstock side of the equation. The Biofuels Innovation Program attends to the fundamentals of establishing, growing, harvesting, and transporting the cellulosic feedstocks necessary for this new generation of ethanol."
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