USDA Release No. 0165.10 Contact: Andre Kok (202) 720-9733
Biomass Producers, Energy Facilities and Communities Benefit from Innovative USDA Program
Washington, DC, April 5, 2010 – USDA Farm Service Agency Administrator Jonathan Coppess said today that biomass producers, energy facilities and communities are benefitting from USDA's innovative Biomass Crop Assistance Program (BCAP). Through April 2, 2010, USDA has approved 4,605 agreements for the delivery of more than 4.18 million tons of biomass and paid eligible biomass owners $165,274,695 in matching payments under BCAP's first phase.
BCAP authorized USDA's Farm Service Agency (FSA) to help those who own biomass by providing matching payments for the collection, harvest, storage and transportation of eligible biomass delivered to approved facilities to convert it to biofuels. FSA service centers across the country have issued payments of up to $45 per dry ton for eligible biomass deliveries. Biomass is any organic matter that is available on a renewable or recurring basis including: agricultural commodities, plants, trees, algae, and other animal, vegetative and wood waste materials.
"Congress directed USDA to establish a program to encourage farmers and forest landowners to help develop the biomass supply chain and accelerate energy independence, rural economic development and renewable sources of energy," said Coppess. "Since we issued initial guidance last June, BCAP has gathered momentum and our efforts to expedite matching payments provided valuable, real-world information and experiences that will inform the crafting of the final regulation, as well as some much-needed economic stimulus in many rural areas.
"We've had dozens of reports from biomass producers, energy facilities and communities that are benefitting from BCAP payments right now, which shows the incredible potential of this innovative program," said Coppess.
Show Me Energy Cooperative of Centerview, Mo., comprised of 600 Midwestern farmers-owners, was the first facility to see matching payments paid out for biomass material deliveries.
"The farmers who we once asked to feed America are now being asked to fuel America, too," Steve Flick, chairman of the cooperative, said. "I'm very enthusiastic about what can happen next."
In Guilford, Maine, Hardwood Products Company General Manager & Chief Operating Officer Terry Young said BCAP enabled his company to hire 62 employees in Maine's poorest county where unemployment rates were the highest. BCAP payments gave the company a chance to lower prices and be competitive internationally.
"This beneficial program has created a snowball effect, which has provided other Maine businesses critical operating revenue to sustain their businesses," Young said. Co-generation of lower cost electricity are among those benefits, Young said, along with reduced heating costs at an area textile plant that employs 400 people, and lower costs for an area wood pellet manufacturing company, which enabled them to remain competitive in selling pellets to thousands of Mainers for home heating.
Bamford Company, a small lumber operation, has been dealing with its scorched private forestlands in Butte County, Calif. BCAP funds made it economically feasible for Bamford to convert 15,500 dry tons of charred timber into clean energy. The company collected, chipped and delivered their partially-burned biomass to a nearby conversion facility, enabling Bamford to keep 37 employees on the payroll during tough economic times.
Bamford has additional damaged timber that it needs to remove from its land so that the forest can return to healthy production. The company is looking forward to a final BCAP rule. There are additional benefits to the state as well as to Bamford. Using the damaged timber for electrical generation helps California utilities meet mandates for renewable fuels and avoids the air pollution that would be caused by burning the charred material in the forest, which is the standard practice for disposal.
Armstrong, a well-established name in the flooring business, is the largest flooring company in the country. It produces hundreds of thousands of tons of sawdust each year. Because of BCAP, Armstrong can now transport its excess sawdust to qualified biomass conversion facilities in five states. This provides more feedstock needed for alternatives for energy facilities while helping Armstrong remove excessive waste through expanded distribution networks that previously were not economically feasible.
"Armstrong is very concerned about the environment and BCAP provides a way to minimize waste while providing an incentive to direct our sawdust towards biofuel uses," said Armstrong World Industries Energy, Utilities & Disposal Procurement Manager David Wilcox.
These are just a few examples of BCAP's potential, Coppess said. The final rule will provide funding for producers of renewable biomass who establish new biomass crops within select geographical areas and will continue to provide matching payments for deliveries of eligible materials.
"With this program, we are helping to build new opportunities in rural America," said Coppess. "Already BCAP has spurred new capital investments among biomass producers, improved existing supply chains and spurred new uses among new consumers. With BCAP, biomass has helped to save money and create jobs, while reducing fossil fuels and improving air quality. The program has improved forest health by removing uneconomical, diseased or invasive growth."
Established in the 2008 Farm Bill, BCAP was designed to spur new energy and economic developments in rural America by reducing the financial risk for farmers, ranchers and foresters who invest in the establishment, production, harvest and delivery of biomass crops to displace fossil feedstocks used for biofuels and renewable energy. BCAP matching payments began after a notice of funding availability was issued June 11, 2009, pursuant to President Obama's May 2009 directive. The proposed rule to implement the full BCAP was announced in early February 2010, with a 60-day public comment period ending April 9, 2010. After reviewing the comments, FSA will issue a final rule for the BCAP program this year.
"The final rule will unleash the full potential of the BCAP program to encourage on-the-ground innovation through new crops and new economic development for farmers and rural communities," Coppess said.
Charts showing BCAP Collection, Harvest, Storage & Transportation Component and Summary Reports are at www.fsa.usda.gov/bcap.