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Vilsack Unveils New Biofuels Incentives

posted on October 21, 2010

Hello, I'm Mark Pearson. A study released this week of bankers in 10 Midwestern states revealed growing optimism on the rural economy.

Creighton University's Rural Main Street Economic Index rose nearly a full percentage point to 48.4 in October. While that's an improvement from September, any reading below 50 suggests a shrinking economy over the next six months.

But the report's confidence index, which reflects bankers' expectations for the months ahead, improved to 57.3. Researchers credit favorable commodity prices for much of the optimism.

Other indicators in the survey also bode well for rural America. The agricultural equipment sales index rose to 61 this month and the farmland price index increased to a similar reading of 60.

And in a development with bullish implications for rural America, the Obama administration announced a string of incentives, this week, designed to wean the nation from its dependence on foreign oil and give a much-needed "shot in the arm" to the biofuels industry.

Vilsack Unveils New Biofuels Incentives

Sec. Tom Vilsack, USDA: "...the approach at the heart of the President's vision - which combines new technologies, new markets, and better use of our natural resources - is our nation's capacity to reduce its dependence on imported oil and fossil fuels through the increased production and use of biofuels and renewable energy."

Secretary of Agriculture Tom Vilsack, this week, unveiled a package of new incentives designed help produce 21 billion gallons of advanced biofuels by 2022. The goal would be achieved through several programs including:

-The Biorefinery Assistance Program to help pay for the construction of biorefineries or bioenergy plants in five regions across the country. The program is designed to demonstrate how the biofuels industry can create jobs and benefit biofuel producers.

-The allocation of money for matching funds to help pay for the installation of 10,000 blender pumps and underground storage systems to facilitate increased blends of ethanol.

- To convince biofuels producers to take advantage of biomass as a feedstock, Vilsack earmarked up to $280 million -- already authorized in the current Farm Bill -- to handle any additional costs.

-And to encourage farmers to capitalize on these next generation fuels, the Secretary unveiled the "Biomass Crop Assistance Program", or BCAP, which will pay for up to 75 percent of the cost to produce, store and transport the alternative feedstock.

Poised to take advantage of the program are several Iowa farmers who are working with ethanol industry leader POET. Through the use of new technology and off-the-shelf equipment, these farmers are hoping to squeeze a little more out of each field.

Dick Nelson, Emmetsburg, Iowa: "The farmer, we don't know the recession is here. We've had a really good run of luck the last few years. I think ethanol's had a lot to do with that. And the cellulosic part is real exciting. We've been customed to corn stocks for years because we have so much cover on the ground. Now, we can take off a ton or whatever and it won't affect the erosion or anything so it's a win, win proposition I think."

POET is paying 85 farmers participating in the program up to $60 per ton of biomass. The 1-for-1 federal funding match will help defer the cost of the new equipment.

In addition to new incentives for biofuels announced this week, Vilsack also called on Congress to reauthorize the Biodiesel Tax Credit and to extend the Volumetric Ethanol Excise Tax Credit, also known as the "Blender's Credit", currently scheduled to expire on December 31st.


Tags: biofuels ethanol news renewable fuels rural Tom Vilsack