Washington puts biofuels on the chopping block

According to an article on The Hill’s website, biomass and biofuels groups warn that the loss of $800 million in guaranteed federal support would stall progress in developing the fuel source and cause job losses in rural communities that can least afford it.

The industry claims interest groups such as fossil fuel producers and livestock owners have hijacked the process as the House Agriculture Committee begins a markup of the bill this week.

“What is probably more broadly at play is a concerted effort by livestock groups, oil groups and some in the environmental community to denigrate biofuel production,” said Matt Hartwig, a spokesman for the Renewable Fuels Association. “They spend more money. They have a big microphone.”

While the Senate farm bill included mandatory funding of $800 million over five years for energy programs, the House bill offers only discretionary spending on energy programs, while cutting $500 million from the funding level in the 2008 farm bill.

The funding goes toward a variety of loans and grants for bio-refineries and renewable-energy programs, as well as subsidies for dedicated energy crops.
The Energy Information Administration (EIA) has predicted strong growth for biofuels and biomass companies even without targeted tax incentives.

Between 2010 and 2035, biofuels will expand at an annual 4.6 percent clip, making it the second-fastest-growing energy source in the nation, the EIA projected in its “Annual Energy Outlook 2012” report released last month. Similarly, biomass production will yield the nation’s fastest production increase, at 3.3 percent annual growth.

But that study assumes the continuation of policies that would face an uncertain future under the House farm bill, according to Matt Carr, a managing director at the Biotechnology Industry Organization.

“The House bill contains no mandatory funding for programs, and if history is any guide, we’re not likely to get a lot of appropriations through the appropriations process,” Carr said. “The House bill as it now stands is a serious risk to energy title programs.”