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Howard Learner Executive Director Environmental Law & Policy Center Presentation to

FARM BILL 2007: CLEAN ENERGY DEVELOPMENT. Howard Learner Executive Director Environmental Law & Policy Center Presentation to Sustainable Agriculture and Food Systems Funders Annual Forum Santa Fe, New Mexico – June 7, 2005 Contact Info: HLearner@elpc.org, 312-673-6500.

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Howard Learner Executive Director Environmental Law & Policy Center Presentation to

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  1. FARM BILL 2007: CLEAN ENERGY DEVELOPMENT Howard Learner Executive Director Environmental Law & Policy Center Presentation to Sustainable Agriculture and Food Systems Funders Annual Forum Santa Fe, New Mexico – June 7, 2005 Contact Info: HLearner@elpc.org, 312-673-6500

  2. FARM BILL -- NEW CLEAN ENERGY PROGRAMS:A WIN-WIN-WIN FOR FARMERS, RURAL ECONOMIC DEVELOPMENT & THE ENVIRONMENT • Farm Bill: Today and Positioning for the Future -- the 2007 Federal Farm Bill • Put Title IX (Energy) on Title II (Conservation) Successful Growth Path • Conservation + Clean Energy = More Robust, Sustainable Economics than Chemical-Intensive Corn/Soy Row Cropping

  3. CLEAN ENERGY DEVELOPMENT WIN-WIN-WIN • FARM INCOME STRATEGY • STATE RURAL ECONOMIC DEVELOPMENT STRATEGY • ENVIRONMENTAL PROGRESS STRATEGY

  4. Clean Energy Development in the 2002 Farm Bill Energy Title IX: $400+ Million over 5 years (if fully funded) Half for direct financial assistance to farmers, ranchers, and rural small businesses for renewable energy system purchases and energy efficiency investments Half for Commodity Credit Corporation Bioenergy Program Conservation Title II: Windpower and Biomass Energy Development on CRP lands Rural Development Title VI: Renewable Energy Development Eligible for Grant and Loan Programs Research Title VII: Energy Efficiency Supported

  5. 2002 Farm Bill - Clean Energy Title:Key Driver for Renewable Energy Development • § 9006, Energy Efficiency and Renewable Grants and Loans: • $45 Million to 280 projects in FY 2003 and FY 2004 • Increasing number of applicants in FY 2005 • Successful Major push by ELPC and others to retain funding, revise rules, promote program • § 9002, Federal Procurement of Biobased Products • § 9003, Biorefinery Development Grants • § 9010, Bioenergy Payment Support Program • § 2101, Use of CRP Land for Energy Crops and Wind Turbines • § 6013, Renewable Energy Systems Eligible for USDA RD loans

  6. Section 9006: Results from 2003-04 280 Projects Funded Distribution of Funding by Technology

  7. Section 9006: Results from 2003-04 Distribution of Funding by State Primarily utility-scale wind Primarily anaerobic digesters

  8. Average Section 9006 Grant Amounts - 2004 Project Type # of Grants Avg. Grant Amount Large Wind 26 $280,828 Small Wind 12 $48,774* Digesters 37 $256,999 Biofuels 13 $241,241 Other Renewables+ 6 $77,861 Building Efficiency 64 $25,559 Industrial Efficiency 9 $19,686 *one project received $307,000 +solar, geothermal, hybrid

  9. Iowa Recipients of Section 9006 Funding in 2003 RECIPIENT COUNTY DESCRIPTION AMOUNT Bee Kleen Linen Service O’Brien Waste Heat Recapture $37,500 Consumers Energy Coop Marshall Wind/Efficiency $119,000 Chapman Lumber Delaware Efficiency Kiln Operations $166,000 Sjerp Yesslstein Sioux Manure to Hydrogen $400,000 Northern Iowa Wind Power Worth Wind $100,000 Neppel Energy Dickinson Wind $402,000 Vedic City Organic Farms Jefferson Wind Greenhouse Oper. $23,000 Kathryn Neighbor Jefferson N/A. $10,000

  10. Positioning Clean Energy Programsfor the 2007 Farm Bill • Commodity Subsidies Vulnerable Under GATT • Environmental Subsidies Are “Non-GATT” and Can Increase • Farm Income If Expanded in 2007 Farm Bill: • Renewable Energy Grants (Goal: $250 million@year program) • Biobased Products/Biorefineries • Conservation Programs • Midwest/Great Plains -- Big Winner • Section 9006 -- $13M out of $22M in FY 2003 • Tremendous Renewable Energy Resources

  11. Policy-Political Transformation Midwest-Great Plains Senators Are the Key Swing Votes in Congress on most environmental issues Environmentalists + Farmers + Neutralize Rural Electric Cooperatives = Strong, bi-partisan clean energy policy Farm Bill - Clean Energy Title: Largest federal commitment to renewable energy ($400 M).

  12. Midwestern Wind Resources and theSenate Agriculture Committee

  13. The Blue-Red Map: Bush-Gore

  14. One vote Two votes No votes Pro-Environmental Votes against the Kyl Amendment, which was defeated 58-40. Key Senate Vote onRenewable Portfolio Standard (2002)

  15. Net Farm Income/Acre (2000 Data) Source: USDA ERS, NASS; Excludes farms with gross revenue <$10,000/year

  16. Biomass Energy Native crops, such as switch grass, can be harvested for energy, creating both farm income and wildlife habitat

  17. Renewable and Energy Efficiency Programs - Energy Title IX Section 9005 - Energy Audit & Renewable Energy Development Program. This program is authorized and funding is subject to appropriations. Section 9006 - Renewable Energy Systems & Energy Efficiency Improvements. “Mandatory appropriations” of $23,000,000 for each year in 2003-2007. USDA shall make grants, low-interest loans and loan guarantees to farmers, ranchers, and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements.

  18. Section 9006 - Renewable Energy and Energy Efficiency Program Grant may not exceed 25% of the project cost, and a combined grant and loan/guarantee may not exceed 50% of the project cost. In determining the grant or loan amount, USDA shall consider the type of renewable energy system, the quantity of energy likely to be generated, the expected environmental benefits, the extent to which the system is replicable, and the amount of energy savings from energy efficiency improvements and the likely payback period. The loan interest rate shall be the interest rate of Treasury securities of comparable maturity. “The [Conference Committee] Managers intend for the Secretary to consider funding energy audits [as] an energy efficiency improvement measure under this section.”

  19. Bioenergy and Biomass Energy Programs - Energy Title IX Section 9002 - Federal Procurement - Biobased Products Section 9003 - Biorefinery Development Section 9004 - Biodiesel Fuel Education Section 9008 - Biomass Research & Development Act Section 9010 - Bioenergy Program

  20. Section 2101 Windpower and Biomass - Conservation Title II Conservation Reserve Program (CRP): Wind Turbines and Biomass on CRP Land Wind turbine installation is subject to USDA approval, taking into account the site location, habitat, and the purposes of the CRP. No reduction in CRP payments. Biomass harvesting must be consistent with soil, water quality, and wildlife habitat conservation. CRP payments shall be reduced by economic value of the biomass activity.

  21. Sections 6401 and 6013 Renewables - Rural Development Title VI Section 6401 - Value-Added Agricultural Product Market Development Grants – Eligibility for Funding Start-Up of Renewable Energy Projects. Expands the definition of the term “value-added agricultural product” to include farm- and ranch-based renewable energy. Section 6013 - Expands Loan Eligibility to Include Renewables. Extends loans and loan guarantees under Consolidated Farm and Rural Development Act to renewable energy systems, including wind energy systems and anaerobic digesters used to produce energy. Solar energy systems already eligible.

  22. Section 7207 Energy Efficiency - Research Title VII Amends the Agricultural Research, Extension, and Education Reform Act of 1998, 7 U.S.C. § 7623. Now includes improvement of farm energy efficiency as a priority research area for precision agriculture and related farm research programs.

  23. More Key Clean Energy Provisions The Conference Committee Managers emphasized that renewable energy projects should receive priority for loan financing under the Business and Industry loan program in Section 310B(g) of the Consolidated Farm and Rural Development Act. Cooperative Extension Service -- Although the Farm Bill does not specifically appropriate funds for technical assistance to farmers and ranchers to develop new renewable energy resources, the Conference Committee Managers’ Statement urged USDA to focus on this issue

  24. Regional Economics Applications LaboratoryJOB JOLT -- MidwestNet New Jobs and Economic Gains Net Job Growth Economic Output 2010 2020 2010 2020 Energy Efficiency 84,000 141,000 $7.0 Billion $12.6 Billion Renewables 37,000 68,000 $3.6 Billion $6.7 Billion TOTAL 121,000 209,000 $10.6 Billion $19.4 Billion

  25. Minnesota:Net New Jobs & Economic Gains Initiative Net Job Growth Economic Output 2010 2020 2010 2020 Efficiency 4,006 8,197 $187 Million $399 Million Renewables 3,899 6,415 $410 Million $674 Million TOTAL 7,905 14,612 $597 Million $1.1 Billion

  26. Job Jolt:The Economic Impacts of RepoweringIowa

  27. The Environmental Law & Policy Center is the Midwest’s largest environmental legal advocacy and eco-business innovation organization. www.elpc.org www.repowermidwest.org

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