Agriculture for Energy Touted

July 25, 2001

U.S. farmers and ranchers can and must be an integral part of the nation's renewable energy industry, and legislation that would promote agriculture's role in generating valuable energy should become law, the American Farm Bureau Federation Tuesday told a House Small Business panel. "The potential for our farmers, our consumers, our environment, our economy and our national security is staggering," Pennsylvania Farm Bureau President Guy Donaldson told the panel. "We are close to realizing this potential. We simply cannot miss this opportunity."

Donaldson told the Small Business Subcommittee on Rural Enterprises, Agriculture and Technology that the Renewable Fuels for Energy Security Act of 2001 (H.R. 2423) is the "type of policy that must be implemented to bring prosperity back to rural America and energy security back to the United States." The measure would require 5 percent of the nation's fuel to contain renewable energy by 2016.

The increased use of corn-based ethanol and soybean-based biodiesel mandated by the legislation will benefit the nation, Donaldson told the panel. The Adams County, Pa., fruit producer said a larger role for renewable energy would help the farm economy by providing increased income to producers, also slashing the amount of money the federal government spends in the form of farm support payments.

"It will provide an income to our corn and soybean farmers from the marketplace, not the federal government - and both farmers and the government should work toward that goal," said Donaldson, a member of the AFBF board of directors.

The farm leader also spoke about other emerging renewable energy technology on which farmers and ranchers are willing to capitalize. He told the panel that "a great deal of interest" exists in farm country in building wind and solar generators on farms. He also called for continued research into other technologies, including capturing methane from livestock manure and converting manure into heat-generating fuel.

"We all gain when we better utilize all of the production from our farms and ranches," Donaldson said. "The technology to use these sources is now in the research lab. With a new demand created for bio-based energy, that technology continues to develop and to become economically viable."

Donaldson reiterated agriculture's potential to produce energy. He said if allowed the necessary time and allotted the necessary resources, farm-produced energy would be a major component of the nation's energy mix.

"Farmers and ranchers have long provided safe and affordable food to this nation," Donaldson said. "We will continue to do so. But as we have produced such an abundance of food, agriculture needs to provide energy as well. We can."

The American Bioenergy Association (ABA) testified that the dual issues of increased energy demand and the need for reducing U.S. dependency on foreign oil has put this nation at a crossroads of energy policy. This situation, although not new, opens the door for policymakers to redirect priorities towards cleaner, cheaper energy sources that satisfy our nation's supply and demand issues. Low-value/high-quantity cellulosic biomass is widely available throughout the United States, mostly in the form of agriculture and forest residues, and is found in every state of our nation, ABA noted.

However, Megan Smith, ABA co-director, said any plan regarding the use of cellulosic biomass for conversion to a renewable fuel such as ethanol is going to take a large commitment on the part of the nation. At the same time, she said an increased use of corn for ethanol production would require a large amount of support from key decision makers in the United States, especially for reaching the production goals contained in various legislation now being considered by Congress.

In consideration of increasing the market for ethanol, however, Smith warned the subcommittee that it must be done prudently. "Chairman John R. Thune's (R-S.D.) bill, H.R.2423, 'Renewable Fuels for Energy Security Act of 2001', now being considered by Congress is a concern in that it might be biting off more corn than the U.S. fuel market can chew".

"While ABA agrees with the premise of this bill, that is, to displace imported oil used in transportation in the form of gasoline with the renewable fuel ethanol, we feel that the goal of increasing the ethanol market by almost 10-fold may be out of reach for passage and possibly even detrimental to the volatile commodity market of corn."

Smith continued, "The USDA has studied up to a three-fold increase in ethanol production from today's market, a 10-fold increase from the current market has not been studied extensively; therefore, this increase may be pre-mature for now" Smith added that H.R. 2423 does not include any special provision for biomass ethanol production, such as the 1.5 to 1 leveraging plan contained in Sens. Tom Daschle (D-SD) and Richard Lugar's (R-IN) S.670, the Renewable Fuels Act of 2001, a bill that would triple the market for ethanol by 2011.

"The U.S.' ever-increasing dependency on hydrocarbons in the form of petroleum has put us in a precarious position both with respect to our economy and national security, as energy is the lifeblood of this great country," Smith said. "If we could begin to phase-down our hydrocarbon use and phase-in our biomass, or carbohydrate, use, the impact would be tremendous. We would start down a critical path of true energy security, while helping to stabilize our economy overall, increasing jobs around the U.S. for many put out of work in rural areas where the majority of biomass is grown."

Low-value biomass can be converted to several high-value products, such as electricity, ethanol for transportation, and chemicals. Markets will determine which of these three is the highest-value in that particular situation, and industry will adapt these 'bio-refineries' accordingly. Cellulosic biomass ethanol differs from corn-starch ethanol in that it is more energy efficient, using the lignin in the biomass to fuel its conversion process. This will allow for biomass ethanol to compete head-to-head with gasoline within the next decade.