The Commodity Credit Corporation released a proposed rule in the Federal Register on Feb. 8 to implement the Biomass Crop Assistance Program (75 FR 6264) (http://bit.ly/Biomass). The biomass program is designed to ensure that a sufficiently large base of new, non-food, non-feed biomass crops is established in anticipation of future demand for renewable energy consumption.
The assistance program is intended to reduce the financial risk for farmers, ranchers and forest landowners by providing incentive payments to those who produce, harvest, store and transport new, first-generation energy crops that displace hydrocarbon-based materials now used for heat, power and vehicle fuel. Agriculture Secretary Tom Vilsack said that helping "biomass and biofuel production holds the potential to create green job[s] ... [to help] to rebuild and revitalize rural America[.]"
The Commodity Credit Corporation is a federal corporation within the U.S. Department of Agriculture and was created in 1933 to "stabilize, support, and protect farm income and prices." The agency is authorized to buy, sell, lend, make payments and engage in other activities for the purpose of increasing production, stabilizing prices, assuring adequate supplies, and facilitating the efficient marketing of agricultural commodities.
The Commodity Credit Corporation, which has no staff, is essentially a financing institution for USDA's farm price and income support commodity programs, and agricultural export subsidies. The programs funded through Commodity Credit Corporation are administered domestically by employees of the Farm Service Agency.
Section 9001 of the Food, Conservation, and Energy Act of 2008 (aka the 2008 Farm Bill) (P.L. 110-246) (http://bit.ly/2008Farmbill), enacted by the 110th Congress by overriding President George W. Bush's veto, authorizes the biomass program to assist agricultural and forest land owners and operators with the collection, harvest, storage, and transportation of eligible material for use in a biomass conversion facility and to support the establishment and production of eligible crops for conversion to bioenergy in selected project areas.
The biomass program supports two main types of activities. First, it provides funding for agricultural and forest land owners and operators to receive matching payments for eligible material that is sold to qualified biomass conversion facilities for the production of heat, power, biobased products or advanced biofuels to offset producers' costs. Payments may continue for up to two years after the first payment is issued.
Second, the program designates special project areas that may be proposed to the Commodity Credit Corporation by biomass conversion facilities or by groups of producers. Producers of eligible crops in those project areas may receive payments up to 75 percent of the cost to establish eligible woody and non-woody perennial crops, and annual payments for up to 15 years for the production of those crops.
Production activities may include annual payments for producers who are unable to sell crops due to a reduction in the size or scope of a biomass conversion facility's operation. If a producer experiences crop failure caused by a natural event such as drought, flooding or hail, as determined by the Commodity Credit Corporation, payments could be issued. Producers in project areas can be eligible for both types of payments; producers outside the project areas can be eligible for matching payments only.
Other proposed notable goals of the biomass program include improvements in forest health by removing uneconomical forest thinning, reducing the risk of disease, invasive species and forest fires and providing new options for improving air quality by avoiding open-air burning of scrap biomass.
The Farm Service Agency issued the first Biomass Program payment in August 2009. Early program beneficiaries include a Vermont school that will replace 100 percent of its fossil fuel consumption with biomass, a start-up pellet company that uses locally grown agriculture residues from Iowa farms and a rural electric cooperative that displaces fossil fuels with wood chips to generate low-cost electricity in northeastern Georgia.
Orange County and Chapel Hill are not among these leaders in alternative energy yet, although our county and area have vast reserves of excess trees.
There are many considerations in adopting wood energy policy. North Carolina forests were estimated to be able to sustainably produce 6-13 million tons of wood per year. (See C. Hopkins, "Potential of Biomass to Support a Renewable Portfolio Standard in North Carolina.") (North Carolina State University, Raleigh, USA, 2006, http://bit.ly/R4Roh)
Duke professor Daniel deB. Richter Jr. recently stated if North Carolina were to install one community scale Advanced Wood Construction project (at 75 hp, 0.75 MW thermal) per year in each of the 100 counties over a five-year construction period, that the state could recognize fuel savings of $100 million to $180 million per year. Emissions of fossil CO2 could decrease by 0.75 to 1.0 million tons per year as a result. Recent studies suggest that such a program would require approximately 20 percent of an estimate of the state's energy-wood supply. (http://bit.ly/1IZd8l)
Here in Orange County our farmers are currently starting to utilize the biomass program by selling their oat and wheat straw, according to Phyllis Ruth, county executive director of the Orange and Durham County FSA Office. In addition, Ruth said that Orange County's large forest land owners are not taking advantage of the program yet since there is no facility that utilizes the materials to make biofuels or uses them in combustion.
A facility easily can be built right here in Orange County, and I strongly urge the planners of Carolina North to plan to heat and power the project with Advanced Wood Combustion.
Jeremy Todd Browner maintains a solo law practice in Chapel Hill.
