bioenergy and the usda: policy perspectivescnas.tamu.edu/confsummaries/harrybaumesusdapres.pdf ·...
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Office of the Chief Economist
Office of Energy Policy and New Uses
Harry S. Baumes, Ph. D. Associate Director
Office of Energy Policy and New Uses
The Economics of Alternative Energy Sources and Globalization: The Road Ahead
Embassy Suites Airport Orlando, Florida
November 16, 2009
Bioenergy and the USDA:
Policy Perspectives
Office of the Chief Economist
Office of Energy Policy and New Uses
BACKGROUND
• Energy Independence and Security Act of 2007
– RFS 2
– GHG Reductions
• Food, Conservation and Energy Act of 2008
– Energy Title IX
• Positions and Personalities
Office of the Chief Economist
Office of Energy Policy and New Uses
President Obama’s
Commitment to Renewable
Energy
“To put people back to work
today, and reduce our
dependence on foreign oil
tomorrow, we will double
renewable energy
production.”
Office of the Chief Economist
Office of Energy Policy and New Uses
President Commitment to
Renewable Energy
“From China to India, from Japan to Germany, nations everywhere
are racing to develop new ways to
produce and use energy. The nation
that wins this competition is the
nation that will lead the global
economy. I am convinced of that.
And I want America to be that
nation”.
Remarks made at MIT, October 23, 2009
Office of the Chief Economist
Office of Energy Policy and New Uses
“USDA is working to expand
energy opportunities by producing
alternative forms of energy and fuel,
and to ensure that we are doing the
research necessary to allow
agriculture to transition away from
its rather significant dependence on
fossil fuels.”
Tom Vilsack
Agriculture Secretary
Office of the Chief Economist
Office of Energy Policy and New Uses
EISA – EPACT Renewable Fuels Standard
0
5
10
15
20
25
30
35
40
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Billion Gallons
Years
RFS1 Conventional - Corn Starch Biobased Diesel Cellulosic Biofuels Other Advanced Biofuels
RFS1
Conventional Corn Starch
Cellulosic Biofuels
Other Biofuels
Biobased Diesel
Years
Bil
lio
n G
all
on
s
Office of the Chief Economist
Office of Energy Policy and New Uses
0
100
200
300
400
500
600
700
800
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009e
Millio
n g
allo
ns
U.S. Biodiesel Production, 1999-2009
Office of the Chief Economist
Office of Energy Policy and New Uses
0
2000
4000
6000
8000
10000
12000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
Millio
n g
allo
ns
U.S. Ethanol Production, 1980-2009
Office of the Chief Economist
Office of Energy Policy and New Uses
Biofuels Interagency Working Group
On May 5, 2009, President Obama signed the directive
establishing a new working group to be chaired by
the Secretaries of Energy and Agriculture and the
Administrator of the EPA.
The group will work with the National Biomass Research and
Development Board on:
– Creating a biofuel market development program to boost
next-generation biofuels, increase use of flex-fuel vehicles,
and assist retail market development
– Coordinating infrastructure policies
Office of the Chief Economist
Office of Energy Policy and New Uses
Food, Conservation, and Energy Act of 2008 - Title IX – Energy
• Federal Procurement of Biobased Products (9002)
• Biorefineries Assistance (9003)
• Repowering Assistance (9004)
• Bioenergy Program for Advanced Biofuels (9005)
• Rural Energy for America Program (9007)
• Biomass Research and Development (9008)
• Biomass Crop Assistance Program (9011)
• Forest Biomass for Energy (9012)
Office of the Chief Economist
Office of Energy Policy and New Uses
Loans, Grants &
Combos
Technology No. Amount Leveraged
Biomass 271 $65,188,772 $321,322,470
Wind 245 48,008,511 582,427,329
Solar 108 4,683,405 11,207,057
Geothermal 52 1,969,517 4,576,639
Hybrid 18 2,620,736 85,968,197
Subtotal 694 $122,470,941 $1,005,501,692
Energy Efficiency 1,329 $34,456,722 $76,743,867
Subtotal 2,023 $156,927,663 $1,082,245,559
Guaranteed Loans 153 $91,529,855 $181,321,296
Grand Total 2,176 $248,457,518 $1, 263,566,855
Farm Bill Title IX
Section 9006 Funding Activity FY2003 - 2008
Renewable Energy/Energy Efficiency
Office of the Chief Economist
Office of Energy Policy and New Uses
Looking Ahead
• USDA working with the EPA – final rule for
implementation of the RFS2
• EPA Ruling on Growth Energy Waiver Request –
raise fuel blend to 15%
• House and Senate Energy Bills
• Commitment by USDA to Expand Biofuels
(Biomass) Production
• USDA Strategic Plan
• IWG - Biofuels
Office of the Chief Economist
Office of Energy Policy and New Uses
Biofuels • 1st generation, corn-ethanol, sugar-ethanol,
biodiesel, used vegetable oil, animal fats
• 2nd generation, cellulosic biofuels
• 3rd & 4th generation, biofuel from organic wastes (solid waste, biosolids, animal wastes, green wastes, food production and pulp and paper wastes, plastics, auto shredding residues, tires) and biofuel from plants that can sequester high levels of CO2 (algae, eucalyptus)
Office of the Chief Economist
Office of Energy Policy and New Uses
Expanding Biofuel Feedstock • Increasing export demand for food and high crop returns
compete for land and limit the conversion to dedicated energy crops
• Expansion of land comes from - cropland, cropland idled by farmers and government programs, cropland pasture, and summer fallow – limited resource
• International response to higher commodity prices can change the equation
• Cropland expansion at the global level is possible in several countries (Angola, Rep. of Congo, Sudan, Brazil, Argentina, and others)
• Conversion of land (rain forest, savanna and pasture) to crops in the above countries can increase GHG emissions
Office of the Chief Economist
Office of Energy Policy and New Uses
Environmental Issues
• Land-use (direct and indirect)
• Nutrient and other contaminant runoff
• Water quality and availability
• Soil loss due to water and wind erosion
• Greenhouse gas emissions ( CO2 and
non CO2)
Office of the Chief Economist
Office of Energy Policy and New Uses
BIOFRENZY
Office of the Chief Economist
Office of Energy Policy and New Uses
Friday, July 4, 2008 by
The Guardian / UK
Office of the Chief Economist
Office of Energy Policy and New Uses
BIOFRENZY
At USDA
with Commitment and
Direction
Office of the Chief Economist
Office of Energy Policy and New Uses
THANK
YOU!
Contact Information: Harry S. Baumes
202-401-0497