Written by R.E. Lord

Biomass Crop Assistance Program

The Obama Administration reiterated its support for the biofuel industry this week when Agriculture Secretary Tom Vilsack announced that the Biomass Crop Assistance Program (BCAP) will continue.

The subsidy program pays farmers to establish perennial crops that can be used as feedstock for biofuels, in some cases providing up to 75 percent of the costs for up to five years (15 years for woody crops). Heretofore a pilot program, the BCAP is now the law of the land, and is “accepting project area proposals,” according to the USDA.
The program also provides matching payments to farmers, ranchers and other rural Americans who transport biomass to facilities that convert it into power and biofuels.

"Domestic production of renewable energy, including biofuels, is a national imperative and that's why USDA is working to assist in developing a biofuels industry in every corner of the nation," Vilsack said in a speech in Washington, D.C. "By producing more biofuels in America, we will create jobs, combat global warming, replace our dependence on foreign oil and build a stronger foundation for the 21st century economy. BCAP will help the nation's power, biobased product, and advanced biofuel industries produce energy from sustainable rural resources and create jobs that will stimulate rural economies across the nation."

Vilsack also announced new findings on the probably future of biofuel production and use.

In “Effects of Increased Biofuels on the U.S. Economy in 2022,” a study released this week, the USDA’s research arm predicts that the Renewable Fuel Standard (RFS-2), which requires a four-fold increase in biofuels in the next 12 years—from 9 billion gallons in 2008 to 36 billion gallons by 2022—could help the economy, but only if “biofuel production technology advances and petroleum prices continue to rise as projected.”

The report finds that, with increased biofuels production and high oil prices, “U.S. household consumption would rise because of higher real wages, increased household income, and lower import prices,” according to a summary. “By substituting domestic biofuels for imported petroleum, the United States would pay less for imports overall and receive higher prices for exports, providing a gain for the economy from favorable terms of trade. Improved technology and increased investment would enhance the ability of the U.S. economy to expand.”