Executive Order and Proposed Bill Will Boost Biobased Products and Bioenergy
Developments in the world of biobased products and bioenergy have flourished in recent years, as reported by sources such as The Carbohydrate Economy newsletter, the USDA’s Agricultural Research Service, the New Uses Council, and In Business magazine, among others. But while each new use for crop residues or another cellulosic ethanol project brings encouragement to sustainability proponents, the biomass and biofuels arena remains small and fragmented compared to the status quo of virgin materials and petroleum-based products.
That may be changing dramatically however, thanks to two recent government initiatives. President Clinton’s August 12 Executive Order on Bio-based Products and Bioenergy brings together several federal departments to accelerate support of alternative technologies for generating products based on forestry and agricultural materials, and clean energy sources. A strong influence on the Executive Order was “Biobased Industrial Products,” a recently released report by the National Research Council, which concluded that federal support for research is vital to fulfilling the economic and environmental potential of biobased industries. Leading scientific and industry groups have called for a federal role in transferring these technologies from the laboratory to the marketplace.
The second measure is S.935, which would amend the National Agricultural Research, Extension, and Teaching Policy Act of 1977 to authorize research promoting “the conversion of biomass into biobased industrial products, and for other purposes.” Introduced April 30 by Sen. Richard Lugar (R-Indiana) chairman of the Senate Agriculture Committee, the bill was unanimously approved by the Senate Agriculture Committee and is expected to reach the Senate floor early in the fall legislative session. A companion bill is being drafted by Congressman Mark Udall (D-Colorado) in the House of Representatives.
Biobased products are defined as commercial or industrial products — other than food or feed — that use biological, renewable agricultural or forestry materials, including dedicated energy crops and trees, agricultural food and feed crop residues, aquatic plants, wood and wood residuals, and animal wastes. Bioenergy refers to biomass used in the production of energy: electricity; liquid, solid, and gaseous fuels; and heat.
President Clinton has asked for $242 million in his proposed budget for investments in biomass/biofuels research and development. “We’re talking about a tiny fraction of the budget for the combined recommendations we have made that can change the whole future of this country and this world, in the way that the automobile and the perfection of petroleum processing did at the beginning of the century,” he explained in a Rose Garden signing ceremony.
President Clinton also has proposed a five-year extension of the current 1.5-cent/kW hour tax credit for electricity produced from biomass. The measure would expand the types of biomass eligible for the credit to include certain forest-related, agricultural and other resources. In addition, a one-cent/kW hour tax credit would be given for electricity produced by cofiring biomass in coal plants.
The Executive Order itself sets a goal of tripling U.S. use of biobased products and bioenergy by 2010. According to the administration, meeting that could create $15 billion to $20 billion in new income for farmers and rural America, as well as reduce carbon emissions by the equivalent of taking 70 million cars off the road. The secretaries of Energy and Agriculture were instructed in a separate Executive Memorandum to prepare a report within 120 days that outlines and assesses options for modifying their departments’ programs to meet the 2010 target.
“WHOLE NEW DIRECTION”
“This is an important step the administration is taking to say that we need a whole new direction as we enter the next century,” says Carol Werner, executive director of the Environment and Energy Study Institute in Washington, D.C., who serves on the New Uses Council’s board of directors and participated in the Department of Energy’s Bioenergy Initiative, a group of federal, commercial and nonprofit stakeholders that helped provide input for the Executive Order and the Department of Energy’s future plans. She also participated in the signing ceremony for the Executive Order and has worked with the Clinton Administration on revamping the biomass tax credit. “This is what the future will be and what we should be doing to address our problems as we look at helping farmers, rural economic development, the environment and the oil dependency situation,” adds Werner.
The Executive Order establishes the Interagency Council on Biobased Products and Bioenergy, with representation from the heads of the federal Agriculture, Commerce, Energy and Interior departments, the Environmental Protection Agency, the Office of Management and Budget, the National Science Foundation and others. The council will prepare an annual strategic plan outlining national goals for development and use of biobased products and bioenergy, as well as how to achieve them. Areas of focus will include rural economic growth, energy security, environmental sustainability and protection, and ensuring safe and affordable supplies of food, feed and fiber.
Strategic plans will cover “biobased products, including commercial and industrial chemicals, pharmaceuticals, products with large carbon-sequestering capacity, and other materials; and biomass used in the production of energy ... these strategic plans shall be based on analyses of the economic impacts of expanded biomass production and uses; and the impacts on national environmental objectives, including reduction of greenhouse gas emissions.” The first annual strategic plan will be due within eight months of the date of the order, describing research, investment and legislative priorities and plans.
Representatives from farm, forestry, chemical manufacturing and other businesses, energy companies, electric utilities, environmental organizations, conservation groups, the university research community and other relevant sectors will serve on an Advisory Committee on Biobased Products and Bioenergy to provide information and advice to the Interagency Council. Among other tasks, it will assess federal agencies’ goals for fulfilling the Executive Order, and review proposed research initiatives and demonstration programs.
Additionally, the Secretaries of Agriculture and Energy will establish a joint coordinating office to support implementation of the strategic plans. One of its functions will be to spread information to farm operators, various business sectors, the university community and public interest groups.
Although the President’s initiative carries considerable weight, as an Executive Order, funding must come from Congress, where similar goals are being pursued on both sides of the aisle. Sen. Lugar’s legislation, “The National Sustainable Fuels and Chemicals Act,” is a six-year authorization bill with 15 cosponsors that calls for:
Cooperation between the Departments of Agriculture and Energy in the research, development and deployment of new technologies for low-cost conversion of biomass into fuels, chemicals and power; Creation of a Sustainable Fuels and Chemicals Board, consisting of senior officials from several federal bodies, to coordinate federal research and development efforts; Founding of the National Sustainable Fuels and Chemicals Research Initiative, a grant program for biomass conversion research and economic analysis; and Authorization of $49 million/year for the initiative in fiscal years 2000 through 2005.
One of Lugar’s main goals in proposing the bill is to reduce American dependence on imported oil by substituting domestic biofuels, biochemicals and biomaterials. Another aim is to help U.S. farmers. “This would be a huge boon to farmers, and, in broad terms, for rural development,” notes Joseph Michels, science policy advisor for Sen. Lugar. “Farmers are struggling with a glut in world markets. This can increase the number of products and markets by having them get paid for what currently is thrown away as waste.” A third objective is to introduce environmentally friendly technologies that will decrease impacts on climate change without overhauling the transportation infrastructure. These principles were outlined by Lugar and former CIA director James Woolsey in “The New Petroleum,” a well received article cowritten for the January/February, 1999 issue of Foreign Affairs.
“I think it’s a good bill,” says Werner. “It’s an important step because of the kind of attention that it calls to this whole area. Forty-nine million dollars/year isn’t a big amount, but for the first time, there’s a very specific authorization involving interagency effort. It’s the first time that there’s been this kind of articulation in policy of the need to do this.”
Michels believes that there is tremendous potential for furthering the biomass and biofuels marketplace, regardless of future election results. “I think the politics of this are compelling,” he says. “During hearings on Senator Lugar’s bill, you had administration officials in favor, chemical companies and some large agriculture interests in favor, and farmers in favor. There are not too many issues where you have that collection of supporters. It cuts across traditional war zones.”
The day after the release of the Executive Order, the U.S. Department of Energy announced the awarding of more than $13 million in grants to promote the growth of the biomass industry. Like S.935, the awards are aimed at developing technologies to reduce the cost of using biomass to create energy, fuels and products.
For example, Michigan Biotechnology Institute in Lansing will get $3 million for its partnership with Heartland Grain Fuels in Aberdeen, South Dakota and the Energy and Environmental Research Center in Grand Rapids, North Dakota to further development of biomass technologies for fuels and chemicals. BC International Corp. in Dedham, Massachusetts will receive $1.4 million toward its pioneering biomass ethanol facility in Jennings, Louisiana, which utilizes sugar cane bagasse. Cargill Polymers, Inc. in Minnetonka, Minnesota and its partners — the National Renewable Energy Laboratory and the Colorado School of Mines — will use a $1.3 million grant for research on polyactic acid (PLA), an environmentally benign plastic material made from corn with applications in fibers, films, rigid materials and coatings. By Dave Block.