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Howard LearnerExecutive Director

Environmental Law & Policy Center

Presentation toSustainable Agriculture and Food Systems

Funders Annual ForumSanta Fe, New Mexico – June 7, 2005

Contact Info: HLearner@elpc.org, 312-673-6500

FARM BILL 2007:

CLEAN ENERGY DEVELOPMENT

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Farm Bill: Today and Positioning for the Future -- the 2007 Federal Farm Bill

Put Title IX (Energy) on Title II (Conservation) Successful Growth Path

Conservation + Clean Energy = More Robust, Sustainable Economics than Chemical-Intensive Corn/Soy Row Cropping

FARM BILL -- NEW CLEAN ENERGY PROGRAMS:

A WIN-WIN-WIN FOR FARMERS, RURAL ECONOMIC DEVELOPMENT & THE

ENVIRONMENT

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CLEAN ENERGY DEVELOPMENT WIN-WIN-WIN

• FARM INCOME STRATEGY

• STATE RURAL ECONOMIC DEVELOPMENT STRATEGY

• ENVIRONMENTAL PROGRESS STRATEGY

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Clean Energy Development in the 2002 Farm Bill

Energy Title IX: $400+ Million over 5 years (if fully funded)

Half for direct financial assistance to farmers, ranchers, and rural small businesses for renewable energy system purchases and energy efficiency investments

Half for Commodity Credit Corporation Bioenergy Program

Conservation Title II: Windpower and Biomass Energy Development on CRP lands

Rural Development Title VI: Renewable Energy Development Eligible for Grant and Loan Programs

Research Title VII: Energy Efficiency Supported

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2002 Farm Bill - Clean Energy Title:Key Driver for Renewable Energy

Development § 9006, Energy Efficiency and Renewable Grants and Loans:

– $45 Million to 280 projects in FY 2003 and FY 2004– Increasing number of applicants in FY 2005– Successful Major push by ELPC and others to retain funding, revise rules, promote program

§ 9002, Federal Procurement of Biobased Products§ 9003, Biorefinery Development Grants§ 9010, Bioenergy Payment Support Program

§ 2101, Use of CRP Land for Energy Crops and Wind Turbines§ 6013, Renewable Energy Systems Eligible for USDA RD loans

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Section 9006: Results from 2003-04

Efficiency8%

Big Wind33%

Small Wind2%

Digesters37%

Biofuels/Bioenergy13%

Other Renewables

7%

Distribution of Funding by Technology280 Projects Funded

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Section 9006: Results from 2003-04

0

2

4

6

8

10

12

90

06

Gra

nts

by

Sta

te (

$M

M)

Distribution of Funding by State

Primarily utility-scale wind

Primarily anaerobic digesters

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Average Section 9006 Grant Amounts - 2004

Project Type # of Grants Avg. Grant AmountLarge Wind 26 $280,828Small Wind 12 $48,774*

Digesters 37 $256,999Biofuels 13 $241,241

Other Renewables+ 6 $77,861Building Efficiency 64 $25,559Industrial Efficiency 9 $19,686

*one project received $307,000+solar, geothermal, hybrid

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Iowa Recipients of Section 9006 Funding in 2003

RECIPIENT COUNTY DESCRIPTION AMOUNT

Bee Kleen Linen Service O’Brien

Waste Heat Recapture $37,500

Consumers Energy

Coop Marshall Wind/Efficiency $119,000

Chapman Lumber DelawareEfficiency

Kiln Operations $166,000

Sjerp Yesslstein SiouxManure toHydrogen $400,000

Northern IowaWind Power Worth Wind $100,000

Neppel Energy Dickinson Wind $402,000

Vedic CityOrganic Farms Jefferson

WindGreenhouse Oper. $23,000

Kathryn Neighbor Jefferson N/A. $10,000

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Positioning Clean Energy Programsfor the 2007 Farm Bill

Commodity Subsidies Vulnerable Under GATT

Environmental Subsidies Are “Non-GATT” and Can Increase Farm Income If Expanded in 2007 Farm Bill:

Renewable Energy Grants (Goal: $250 million@year program)Biobased Products/BiorefineriesConservation Programs

Midwest/Great Plains -- Big Winner Section 9006 -- $13M out of $22M in FY 2003Tremendous Renewable Energy Resources

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Policy-Political Transformation

Midwest-Great Plains Senators Are the Key Swing Votes in Congress on most environmental issues

Environmentalists + Farmers + Neutralize Rural Electric Cooperatives = Strong, bi-partisan clean energy policy

Farm Bill - Clean Energy Title: Largest federal commitment to renewable energy ($400 M).

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Midwestern Wind Resources and theSenate Agriculture Committee

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The Blue-Red Map: Bush-Gore

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Key Senate Vote onRenewable Portfolio Standard (2002)

One voteTwo votes

No votes

Pro-Environmental Votes against the Kyl Amendment, which was defeated 58-40.

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Net Farm Income/Acre (2000 Data)

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

IL IA ND

Ave

rage

Inc

ome/

Acr

e, 2

000

Source: USDA ERS, NASS; Excludes farms with gross revenue <$10,000/year

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Native crops, such as switch grass, can be harvested forenergy, creating both farm income and wildlife habitat

Biomass Energy

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Renewable and Energy Efficiency Programs -

Energy Title IX

Section 9005 - Energy Audit & Renewable Energy Development Program. This program is authorized and funding is subject to appropriations.

Section 9006 - Renewable Energy Systems & Energy Efficiency Improvements. “Mandatory appropriations” of $23,000,000 for each year in 2003-2007. USDA shall make grants, low-interest loans and loan guarantees to farmers, ranchers, and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements.

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Section 9006 - Renewable Energy and Energy Efficiency Program

Grant may not exceed 25% of the project cost, and a combined grant and loan/guarantee may not exceed 50% of the project cost.

In determining the grant or loan amount, USDA shall consider the type of renewable energy system, the quantity of energy likely to be generated, the expected environmental benefits, the extent to which the system is replicable, and the amount of energy savings from energy efficiency improvements and the likely payback period.

The loan interest rate shall be the interest rate of Treasury securities of comparable maturity.

“The [Conference Committee] Managers intend for the Secretary to consider funding energy audits [as] an energy efficiency improvement measure under this section.”

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Bioenergy and Biomass Energy Programs -

Energy Title IX

Section 9002 - Federal Procurement - Biobased Products

Section 9003 - Biorefinery Development

Section 9004 - Biodiesel Fuel Education

Section 9008 - Biomass Research & Development Act

Section 9010 - Bioenergy Program

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Section 2101 Windpower and Biomass - Conservation Title II

Conservation Reserve Program (CRP): Wind Turbines and Biomass on CRP Land

Wind turbine installation is subject to USDA approval, taking into account the site location, habitat, and the purposes of the CRP. No reduction in CRP payments.

Biomass harvesting must be consistent with soil, water quality, and wildlife habitat conservation. CRP payments shall be reduced by economic value of the biomass activity.

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Sections 6401 and 6013 Renewables - Rural Development Title VI

Section 6401 - Value-Added Agricultural Product Market Development Grants – Eligibility for Funding Start-Up of Renewable Energy Projects. Expands the definition of the term “value-added agricultural product” to include farm- and ranch-based renewable energy.

Section 6013 - Expands Loan Eligibility to Include Renewables.

Extends loans and loan guarantees under Consolidated Farm and Rural Development Act to renewable energy systems, including wind energy systems and anaerobic digesters used to produce energy. Solar energy systems already eligible.

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Section 7207 Energy Efficiency - Research Title VII

Amends the Agricultural Research, Extension, and Education Reform Act of 1998, 7 U.S.C. § 7623.

Now includes improvement of farm energy efficiency as a priority research area for precision agriculture and related farm research programs.

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More Key Clean Energy Provisions

The Conference Committee Managers emphasized that renewable energy projects should receive priority for loan financing under the Business and Industry loan program in Section 310B(g) of the Consolidated Farm and Rural Development Act.

Cooperative Extension Service -- Although the Farm Bill does not specifically appropriate funds for technical assistance to farmers and ranchers to develop new renewable energy resources, the Conference Committee Managers’ Statement urged USDA to focus on this issue

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Regional Economics Applications LaboratoryJOB JOLT -- Midwest

Net New Jobs and Economic Gains

Net Job Growth Economic Output

2010 2020 2010 2020 84,000 141,000 $7.0 Billion $12.6 BillionEnergy Efficiency

37,000 68,000 $3.6 Billion $6.7 BillionRenewables

121,000 209,000 $10.6 Billion $19.4 BillionTOTAL

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Minnesota:Net New Jobs & Economic Gains

Initiative Net Job Growth Economic Output

2010 2020 2010 2020 4,006 8,197 $187 Million $399 MillionEfficiency3,899 6,415 $410 Million $674 MillionRenewables

7,905 14,612 $597 Million $1.1 BillionTOTAL

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Job Jolt: The Economic Impacts of Repowering

IowaClean Energy Generation

468 1021

3817432

647

526

1588

0

1000

2000

3000

4000

5000

6000

7000

2003 2010 2020

Meg

aw

atts

Wind Biomass Eff. NG

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The Environmental Law & Policy Center is the Midwest’s largest environmental legal advocacy and

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