Guest Commentary: 5 things corn farmers (and everyone else) should know about the Bioeconomy bill (Anna Boroff, Minnesota Corn Growers Association)

The Minnesota Corn Growers Association (MCGA) is one of several organizations supporting the Bioeconomy bill during the ongoing Minnesota legislative session. The Bioeconomy bill would develop new market opportunities for Minnesota corn farmers, create new jobs and economic output, require minimal up-front investment from the state and protect our state’s land, soil and water resources.

As with many new concepts, the Bioeconomy bill is complicated, but the program and objectives are simple. To try and develop a better understanding of the Bioeconomy bill, here are 5 things corn farmers (and everyone else) should know about the bill:

1. The Bioeconomy bill opens new markets for Minnesota’s corn farmers. Under the bill, industries that use corn stalks, crop residues and other compounds produced from agricultural or forestry materials that displace compounds typically made from petroleum would receive a much-needed boost. With corn prices down more than 50 percent in recent years, it’s essential that corn farmers continue working to open new markets and add value to their crop. The Bioeconomy bill does that.

Examples of eligible projects include:

  • Cellulosic ethanol from corn fiber, crop residues, perennials and cover crops
  • Commercial-scale biomass heating projects
  • High value biobased chemicals from corn sugar
  • Plastics, solvents, personal care products, polymers and other compounds typically made from petroleum, which would now be made from biobased materials found on many Minnesota farm fields.

2. This bill positions Minnesota as the best place in the world for developing renewable, biobased chemicals, advanced biofuels and biomass thermal energy. Minnesota biochecmical companies have attracted $200 million in venture capital funding, received more than $1.6 million in federal grants and have been awarded 200 patents and patent applications.

Minnesota’s bioindustrial sector, which includes biochemicals, biofuels and biomass thermal energy, currently employs 11,000 people with an average wage of $75,000 per year. The Bioeconomy Bill will invest about $235 million annually over 15 years, which will help our state gain over $830 million in new economic output and over 3,000 jobs annually. Those benefits will continue once the program expires.

3. The Bioeconomy bill is not another “subsidy for corn ethanol.” It does not impact traditional ethanol production in any way. Here’s how the production incentive works.

First, we should state clearly that current ethanol production is not subsidized.

Second, the Bioeconomy bill creates a production incentive, which means there is no upfront investment from the state. The state of Minnesota pays nothing until a project is up and running and producing a viable product.

Third, the production incentive applies not only to the advanced biofuels portion of the bill, but also renewable chemicals and biomass thermal energy.

Fourth, the return on a relatively small potential investment is huge. Minnesota invested $450 million to help build our state’s 21 ethanol plants. Today, the ethanol industry adds $5 billion per year to our economy and supports thousands of local jobs, many in rural areas.

Fifth, the production incentives will not only pay off for our economy, but also our environment. Products made from biobased sources are environmentally safer and less carbon intensive than petroleum-derived products. We want to help companies invest in renewable technology, and reward them for coming to Minnesota and doing something innovative. Being innovative and forward-thinking almost always involves more risk than simply starting up a status quo production facility.

4. The environmental benefits of the Bioeconomy bill are numerous. According to the Environmental Protection Agency, cellulosic ethanol, which is considered an advanced biofuel, must have a carbon footprint at least 60 percent lower than gasoline. Many renewable chemicals are environmentally-safer than their petroleum-based counterparts. The bill includes a responsible sourcing plan element to ensure farmers use the best conservation practices when growing feedstock.

5. When they work together, agricultural, forestry, industrial and environmental leaders can develop public policy that grows our economy and protects our land, soil and water resources. Too often, projects like the Bioeconomy Bill don’t see the light of day because environmental activists and proponents for modern agriculture and economic development can’t get along.

The Bioeconomy bill is an excellent example of what can happen when groups with differing opinions come together, create a dialogue around those differences, and develop a practical and workable solution.

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U.S. House Members Introduce Companion Bill to Senate’s Fuel Choice and Deregulation Act of 2015 (via Biofuels Journal)

Congressman Rod Blum (R-IA), on April 22 along with Congressman Ken Buck (R-CO), Congressman Collin Peterson (D-MN), and Congressman David Young (R-IA) introduced the House companion to the Fuel Choice and Deregulation Act of 2015.

U.S. Senators Rand Paul (R-KY) and Chuck Grassley (R-IA) authored the legislation, which removes the burdensome restrictions placed on the ethanol marketplace by the Environmental Protection Agency (EPA), further encourages manufacturers and producers to develop new technologies, and equalizes the tax between liquid natural gas (LNG) and diesel fuel.

“It is time for the EPA to stop denying American consumers access to new fuels in the marketplace,” said Rep. Blum.

“Choice and competition are an integral part of our free market system: consumers deserve the opportunity to choose clean, domestically produced fuel options, and producers and manufacturers should be allowed to innovate within the fuel sector to bring new products to consumers. This bill from Senators Paul and Grassley reduces unnecessary red tape while promoting competition, innovation, and fairness in the energy marketplace, and I look forward to working with my colleagues in the House and the Senate to move this measure forward.”

Sen. Paul added: “The EPA’s onerous regulation of fuels is artificially limiting options for consumers and producers and preventing the adoption of new fuel options that could benefit our environment, our economy, and our energy security. Through competition and consumer choice, my bill will free fuel producers and automobile manufacturers to innovate and bring new products to market that can lower costs to consumers, increase domestic energy production, and benefit the environment. I am proud to stand with Rep. Rod Blum today as he introduces the House companion to the Fuel Choice and Deregulation Act.”

“Consumers appreciate having choices, whether it’s at the grocery store or the fuel pump,” Sen. Grassley said.

“Those of us who live in biofuels-producing states like Iowa understand the appeal of cleaner, domestic, renewable fuels. The EPA should be consistent in the way it treats different fuel blends as a matter of fairness and to give consumers more options for fueling their vehicles. The EPA has never acted on its authority to grant a waiver for E15.  A legislative fix will fill the void.

I’m glad to see Rep. Blum is taking the lead on the House companion to this common sense bill. Between the E15 fix and other measures, this bill goes a long way toward clearing key regulatory hurdles while further encouraging the use of alternative fuels.”

Monte Shaw, Iowa Renewable Fuels Association Executive Director: “Iowa ethanol producers and consumers appreciate Rep. Blum taking the lead on this important issue. There are several government impediments to fair market access for higher ethanol blends that restrict consumer choices at the pump. The unfair regulatory treatment of E15 is one of the most important to address quickly. We look forward to working with Rep. Blum to move this legislation forward.”

Webinar Link: The Developing Dynamics of Agricultural and Rural Policy in the 114th Congress

David Ladd, President, RDL & Associates, recently hosted an American Agri-Women Webinar to discuss the dynamics of change and the evolution of stakeholder engagement in relation to agriculture and rural policy.

The webinar has been archived and is available on the American Agri-Women website:

https://attendee.gotowebinar.com/recording/7819259769558838017

Please contact Mr. Ladd at (651) 247-5458 or send a message to daveladd66@gmail.com if you would like additional information or are interested in having him speak to your organization.

 

Commentary: A Letter from Minnesota Milk’s Board of Directors (via Minnesota Milk Producers Association)

The Land Stewardship Project (LSP) group is once again spreading misinformation, thus creating fear while unfairly criticizing good people. This time, LSP is trying to drive their agenda through a “Dear Friend” letter dated March, 2015. We hope this response clarifies some of their misinformation and leads us all to more productive solutions for everyone’s sake.

The topic of their misinformation is Riverview’s Baker Dairy, which is a proposed dairy farm in Stevens County. The facility would be owned by locals from the region and would provide significant economic development to an area that has a median income of $27,299, according to the U.S. Census. Baker Township has a population density of seven people per square mile, identified by the Census as “very low.” Roughly 25 percent of the people who live there were below the poverty level in 2009 compared to the state as a whole, in which 8 percent were below the poverty level. The median age of men in the region is 65.5; for women it is 75.2. This is a part of the state that relies on agriculture and bringing dairy cows to the township will support other agriculture businesses and local vendors, add jobs, income and vitality.

The LSP letter writer states that Riverview’s Baker Dairy would use water at a rate that is “absolutely unsustainable.” In reality, Riverview’s Baker Dairy water use estimates are 100 million gallons per year. That is equivalent to the annual use of 685 households of four, according to EPA. Minnesota’s DNR has approved water appropriations of 226 million gallons from the existing wells already drilled for an ethanol plant that was never built. So, the dairy farm would use less than 50 percent of what DNR appropriated.

The letter writer also claims that the handling of 75 million gallons of manure wouldn’t provide safeguards to people, their drinking water, or local lakes and streams. Using proper manure injection methods employed at their other dairy farms will protect the 0.2 square miles of surface water in Baker Township. Second, the Minnesota Pollution Control Agency only issues a permit for a dairy to operate if, and ONLY if, the dairy has the appropriate amount of land area to apply manure at agronomic rates. NO permit would be issued unless this regulation was met.

“The odors, dust and noxious gases of a facility of this size would be overwhelming, even dangerous,” the letter also states. Yet Minnesota has strict hydrogen sulfide emission regulations. Practices must be in place to ensure the facility does NOT exceed those levels, which are stricter than those of other states. In fact, the dairy facility plans include covers over all manure basins.

Another allegation in the letter is that other Riverview dairy farms are causing road problems. The practices at their other sites indicate otherwise. All of the other Riverview farms work closely with township and county officials to take care of roads. Some would argue increased road traffic is good because it means economic development in the area and kids in the local schools, in addition to people patronizing the local restaurants and other small businesses.

The writer also makes false claims that these farms drive out the “independent livestock farms,” while there is no evidence to back that up. Farmers have to continue to find ways to be economically, environmentally and socially sustainable. Creating a new business like Riverview’s Baker Dairy is one example of how dairy farmers are finding ways to achieve this important goal. Other farmers find other ways to accomplish this goal. What is important is that we stick to the facts, don’t discriminate and treat people with respect in their decisions.

The writer calls Riverview Baker Dairy an “assault on the land and the people”. Yet, these are real people who take real pride in caring for the animals and land while producing a wholesome product, and are adversely affected by the insensitive and misleading comments made by the letter writer.

LSP is encouraging people to contact their legislators with a message of “keeping their hands off local democracy and local control.” There is no piece of legislation being proposed or pushed that would deter local democracy and control. This dairy, like others of any size, must have approval from the local township, county and the state through the Minnesota Pollution Control Agency (MPCA). Input and comments are encouraged in each level of approval process.

There is, however, a proposal to change the role of the MPCA Citizens’ Board. This board was set up when MPCA was in its infancy nearly 40 years ago. Today, no other state agency has a Citizens’ Board to make final decisions. This is an extra cost to everyone involved. If the Citizens’ Board role is changed as in the proposed legislation, local citizens should and would continue to have the right to comment locally, while the current MPCA Citizen’s Board doesn’t necessarily even have a member from a local area weighing in on decisions. We would argue that right belongs to local people and to the experts at the MPCA, not a group of citizens who assemble in St. Paul.

If the organizers of LSP are interested in bringing people together, they would do better through respecting people and having open dialogue. This would serve a more constructive purpose. Allowing the local people of Baker Township to find common ground and make an informed decision based on facts is the more respectful way to proceed.

In fact, this type of meeting occurred just a couple of months ago. The meeting was titled, the Minnesota Dairy Growth Summit and the theme was “Stronger Together – Dairy Growth is Good for Minnesota.” Some leaders of LSP were present at the meeting where productive dialogue occurred with leaders of the university, government, industry and farmers. The consensus of the group was that we can and should have responsible growth of dairy in Minnesota because it benefits farmers, consumers, industry, environment and the economics of the state.

We ask LSP and other organizations to come to the table and hear the facts about today’s agriculture practices, find common ground and pursue productive solutions.

Sincerely,

Minnesota Milk Producers Association
Dairy Farmer Board of Directors

 

The entire board of directors of the Minnesota Milk Producers Association, all dairy farmers from different parts of the state, felt it was necessary to respond not only for Riverview Farms, but for all the dairy farmers in Minnesota. As dairy farmer leaders, we believe constructive, productive dialogue is needed in this debate for the sake of all our dairy farmers. We hope you join us in this effort.

EPA settles lawsuit over ethanol mandate (via The Hill)

The Environmental Protection Agency (EPA) has settled an oil industry lawsuit and agreed to set the ethanol blending mandates for this year and last year by Nov. 30.

The 2014 mandate under the Renewable Fuel Standard will be two years late and this year’s will be one year late. But with an end to the delays finally in sight, the settlement ends a dispute that angered both the oil industry and ethanol producers.

“This schedule is consistent with EPA’s commitment to get the RFS program back on track, while providing certainty to renewable fuels markets and promoting the long-term growth of renewable fuels,” the agency said in a statement.

The settlement does not require the agency to set the volumes at any particular level. The agreement is still subject to approval by a federal court.

Friday’s announcement ends lawsuits filed by the American Petroleum Institute (API) and American Fuel and Petrochemical Manufacturers (AFPM) over the EPA’s delays, which they said force refiners to guess how much ethanol to blend into their products before the agency decides a retroactive mandate.

The Renewable Fuel Standard requires that fuel refiners mix a certain volume of ethanol into gasoline and biodiesel into diesel each year.

The EPA is legally obligated to set those volume mandates by Nov. 30 each year for the following year.

The agency proposed in 2013 to reduce the ethanol mandate for the first time, to 15.21 billion gallons, while keeping the biodiesel mandate the same as the previous year. After multiple delays, EPA officials said most recently that they would make final the 2014 mandate by the end of spring.

The EPA said it will set next year’s mandate during this year, as it is required to do under the law.

The oil industry groups welcomed the settlement, but said they would rather see the EPA comply with the law. They said they still hope Congress either repeals or significantly reforms it to reduce the amount of ethanol that must be used.

Industry groups complain that the mandate increases their costs significantly, which are passed onto consumers through gasoline and diesel prices.

Ethanol producers and other proponents of the mandate say that it reduces the oil industry’s monopoly on fuels and helps the environment.

“It’s unfortunate that we will, under this agreement, have a 2014 rule that comes out by Nov. 30, which will be two years late, and a 2015 rule that comes out, also Nov. 30, which will be one year late,” said Rich Moskowitz, general counsel at the AFPM. “That is not the solution we’re looking for.”

Brendan Williams, the refinery group’s executive vice president, said the lawsuit exposed major flaws in the Renewable Fuel Standard.

“This is just another glaring example of the need for Congress to step in and either repeal or significantly reform what is a broken program,” he said. “Today’s announcement, as well as what we see them propose at these deadlines are just going to continue to be stark reminders that will continue to bolster momentum for a legislative change.”

“We hope this agreement helps get the RFS back on track, but the only long-term solution is for Congress to repeal the program and let consumers, not the federal government, choose the best fuel to put in their vehicles,” added Stacy Linden, general counsel for API, in a statement.

“Failure to repeal the unworkable law could put millions of motorists at risk of higher fuel costs, damaged engines, and costly repairs,” she said.

Editorial: Adding Minnesota jobs without hurting water quality (via Minneapolis StarTribune)

Too often economic development advocates are at odds with those who stand guard over Minnesota’s beloved natural resources. But a recent compromise between two influential special interests — the state’s agricultural industry and its environmental watchdogs — is a timely reminder that job growth and resource protection can go hand in hand. It doesn’t have to be an either-or proposition.

The critical issue on which these lobbying powerhouses are plowing common ground involves a ripening technology — advanced biofuels that are derived from corn-crop residue (think leftover stalks) or other crops such as switch grass. More specifically, an accord was reached on legislation that would provide $5 million in production-based incentives over the next two fiscal years to attract new advanced biofuel plants or spur additional capacity to utilize corn residue, perennials or cover crops.

The bill includes incentives for biomass thermal energy companies and those developing “renewable chemicals.” An example of a renewable chemical: one that would be derived from crops to replace petroleum-based additives used to make plastic more flexible.

The hang-up for the legislation has been over its biofuels incentives. While economic estimates suggest that the burgeoning biotech industry could generate more than 3,000 jobs in Minnesota, water quality watchdogs raised legitimate concerns about the impact on rivers and streams already impaired by agricultural runoff. In particular, overreliance by biofuel producers on crop residue left after harvesting corn could exacerbate sediment runoff because removing the residue, called “stover,” could worsen erosion. This would be at odds with the state’s ambitious goal to clean up impaired waters and the hundreds of millions in Legacy Amendment sales tax dollars being invested in this.

The compromise targets biofuel producers and provides incentives to them to gradually increase reliance on perennial or cover crops. These guard against erosion, improve soil health and provide wildlife habitat. If scaled up, this could be a historic boost for state water quality.

Biofuel producers who don’t want to meet these cover crop targets don’t have to; only those who want state incentives do. But given new ventures’ needs for economic development assistance, it’s likely that many would sign on. That should create a growing market for crops besides corn, providing new revenue streams for farmers.

The Minnesota Environmental Partnership (MEP), the Bioeconomy Coalition of Minnesota and the Great Plains Institute provided welcome leadership on the compromise. MEP represents groups such as Friends of the Mississippi River, while the Bioeconomy Coalition includes the Minnesota Corn Growers Association and the Minnesota Farmers Union.

The legislation has bipartisan backing and has cleared key procedural hurdles in both chambers. Its passage would help attract new ventures to Minnesota and show other Midwestern states how to balance economic needs with robust stewardship of fertile yet fragile prairies.

Link: http://www.startribune.com/opinion/editorials/298972301.html