New USDA Report

New USDA Report Provides Roadmap to America's Renewable Energy Goals


June 25th, 2010

USDA should be commended for taking a big step this week that that will put the nation on the road to a clean energy future. The department issued a report Wednesday that offers a roadmap for meeting the nation’s renewable energy goals. The report outlines both the current state of renewable transportation fuels efforts in America and a plan to develop regional strategies to increase the production, marketing and distribution of biofuels. The report provides information on current production and consumption capacities, as well as projections to meet the Renewable Fuels Standard (RFS2) mandate to use 36 billion gallons of biofuel per year in America’s fuel supply by 2022.

The report marks an opportunity for America to reaffirm a commitment to reducing our dependence on foreign oil by identifying the numerous biomass feedstocks available for developing biofuels and advocating greater investment in their research and development. In addition to feedstocks, the report also specifically looks at sustainable production and management systems; efficient conversion technologies and high-value bioproducts; and decision support and policy analysis tools.

The report provides data showing the significant impact the ethanol industry will continue to have on job creation, estimating that as many as 40 direct jobs and additional indirect jobs are created with each 100-million-gallon ethanol facility built.

A unique aspect of the report is a USDA plan for regional strategies that allow the placement of biorefineries in areas of economic distress. By leveraging of regional resources, including transportation, labor and feedstocks, the strategy provides greater potential for economic benefit for impacted rural areas. The department mapped out the regions based on the biofuel feedstock crops that will be prevalent in those areas, each based on historic planting data and weather, soil and water conditions.

The department estimates that meeting the RFS2 will require an investment of some $168 billion over the next 12 years, assuming that construction costs will run an average of $8 per gallon of capacity. However, the department acknowledges the cost estimates are high because the roadmap does not take into account any advances in technology. The roadmap rightly points out that “the RFS2 is predicated on challenging the industry to create newer, cleaner fuels,” and that “the agricultural sector as a whole is incredibly productive and has consistently outpaced productivity increases in other sectors, in part, due to its investment in technology.”

In a conference call with reporters announcing the roadmap, Agriculture Secretary Tom Vilsack said the current, corn-dominated ethanol industry “provides a solid foundation” upon which to build the biofuel market expansion necessary to reach the 36-billion-gallon RFS in 2022. The document makes the case that the future of renewable energy rests on products other than corn in the manufacturing of ethanol, including wood fiber, algae, municipal waste, grasses and crop residue. The report says these renewable resources can be grown in areas with high demand for ethanol and reduce the need to transport fuel from the Midwest.

Vilsack’s    “absolute” confidence in the industry’s capabilities of meeting current and future goals reflects the kind of support stakeholder need to achieve a clean energy future that maximized the use of sustainable biofuels. It is important that USDA back strong words with strong action, including the development of of loan guarantee programs that are structured to provide the greatest benefit to next-generation biofuel companies. It is also important for the Obama administration to support legislation that sets a mandate on the sale of flexible fuel vehicles, and to expedite a twice-delayed EPA approval of E15 fuel blends in 2001-model and newer vehicles.

The USDA biofuels roadmap promotes strategies that play to the strength of farm communities and can offer a strategy for boosting our rural economy. Stakeholders and policy makers should use take the roadmap and move forward together to optimize the role of America’s croplands and forestlands in meeting our nation’s energy needs.