The United States leads the world in agricultural innovation, with crop and livestock production that feeds our country and more than enough to export overseas. In fact for years, agriculture has been the second most productive aspect of the U.S. economy, achieving record harvests even during years of severe weather events or market downturns. We achieve these goals despite having less land in agricultural production and fewer farmers and ranchers compared to when USDA was first established over 150 years ago.
The economic potential of rural America doesn’t stop just at growing food. The entrepreneurial, pioneering spirit of America’s farmers and ranchers now has put them at the forefront of a remarkable transformation, ranging from homegrown renewable energy to biobased materials, keeping rural manufacturing humming and ensuring that our communities throughout the countryside stay economically competitive.
Over the past seven years, President Obama has undertaken historic and unprecedented action to reduce the nation’s reliance on foreign sources of energy while investing in cleaner, affordable fuels that are made in America. The Obama Administration has pursued a carefully balanced approach, deploying technologies that improve the very best of our existing energy sources, while rigorously implementing policies that invest in the second and third generations of tomorrow’s fuels.
USDA has been working closely with farmers and ranchers to make critical investments in renewable fuels, from manufacturing facilities to storage tanks and dispensing pumps, and bio-based products, including research breakthroughs and enhanced product visibility. Even in rural businesses or on the farm, USDA has supported significant deployments of solar and wind power systems, anaerobic digesters, and energy efficiency solutions.
These USDA investments have created remarkable momentum in rural economic growth. As the U.S. Department of Energy has documented, the United States has enough diversity in biomass resources that more than a billion tons of biomass annually could be sustainably grown and harvested to displace up to a third of existing fossil fuel use. This could double or even triple current levels of biomass use for bioenergy or biobased products — an untapped potential that provides almost limitless opportunities for rural economies.
At the same time, we’re scaling up a biobased industry that is pumping $393 billion into the U.S. economy and contributing over 4.2 million jobs each year, harnessing consumer demand for products that are good for them and the economy. Today, USDA’s BioPreferred program has an online catalog of more than 15,000 products, of which 2,700 have been tested and feature the USDA Certified Biobased Product label. Use of biobased products have displaced about 6.8 million barrels of oil per year.
Finally, we’re reducing our fossil footprint by helping thousands of farmers, ranchers and other rural businesses shift away from fossil-based energy. Today, more than 4,000 USDA wind and solar renewable electricity generation projects power more than 158,000 homes annually. USDA has also helped roughly 15,000 rural small businesses, farmers and ranchers improve their bottom lines by installing renewable energy systems and energy efficiency solutions, while support for more than 100 anaerobic digesters have helped farm operations capture methane to produce electricity. All told, these projects are generating renewable energy and saving energy reducing greenhouse gas emissions equivalent to removing almost 1.2 million cars from the road annually.
President Obama entered office in 2009 with a strong commitment to pursue an “all-of-the-above” energy strategy and, since then, domestic energy-related emissions have fallen to their lowest level in 20 years, and our dependence on foreign oil is at a 40-year low and declining. In the last eight years, USDA has helped lead an effort to promote the domestic production and use of advanced biofuels and biobased products, supporting millions of jobs. On top of that, we’ve invested in research, supported farmers growing bioenergy feedstocks and helped fund thousands of bioenergy and renewable energy projects nationwide. And today, because of USDA’s targeted investments, it’s safe to say that rural America is leading the way to a more diversified, more mature renewable energy sector that’s making our country more energy secure than ever before.
I. Support for Growers, Landowners and Producers of Renewable Energy Feedstocks
Since the beginning of this Administration, USDA has taken significant steps to support producers as they “grow” the emerging bioeconomy.
The Biofuels roadmap, launched early on the Administration, is a comprehensive regional strategy to help recharge the rural American economy by laying out the strategy for meeting the biofuels goals of the current Renewable Fuels Standard (RFS2). The strategy ensures federal efforts are better coordinated and targets barriers to and proposed plan of action to meet congressionally mandated RFS2 goals for biofuels production.
We’ve taken steps to create much-needed certainty for farmers by offering insurance coverage for producers growing biofuel crops. For years, commodity crop farmers have had the ability to purchase insurance to keep their crops protected. Now, the Noninsured Crop Disaster Assistance Program allows for specialty crop growers to purchase similar levels of protection. Ensuring these farmers can adequately protect themselves from factors beyond their control is critical not only for the consumers who enjoy these products but also for the rural communities whose economies depend on them.
We’ve encouraged feedstock production for renewable energy by establishing the Biomass Crop Assistance Program (BCAP) which is incentivizing nearly 1,000 growers and landowners farming nearly 49,000 acres to establish and produce dedicated, nonfood energy crops for delivery to energy conversion facilities. We’re also doing our part to encourage the production of advanced biofuels from non-food sources through our Advanced Biofuel Payment Program. Established in the 2008 Farm Bill, this program allows payments to be made to biofuels producers based on the amount of advanced biofuels produced from renewable biomass, other than corn kernel starch; feedstocks like crop residue, food and yard waste, vegetable oil and animal fat. Through this program to date, USDA has made $312 million in payments to almost 400 producers in 47 states all of which have contributed to producing enough biofuel to provide more than 63 billion kilowatt hours of electric energy and over 8.6 billion gallons of advanced biofuel.
Equally importantly, we’re investing in our renewable energy future, by ensuring that we are continuously striving to create better, cleaner and more efficient renewable energy technologies. Over the course of this Administration, USDA has invested $332 million to accelerate research on renewable energy ranging from genomic research on bioenergy feedstock crops, to development of biofuel conversion processes and costs/benefit estimates of renewable energy production.
II. Investments in Renewable Energy Production and the Developing the Biobased Economy
The U.S. biobased economy, worth $393 billion and over 4.2 million jobs, is generating considerable opportunities for American jobs and economic mobility in rural America. In fact, estimates show that shifting just 20 percent of the current plastics produced into bioplastics could create 104,000 jobs. Every 1,000 jobs in the biobased industry supported 1,760 additional jobs in other parts of the economy.
The increased use of biobased products has the potential to reduce greenhouse gas emissions by an estimated 10 million metric tons of CO2 equivalents per year. And USDA’s BioPreferred program has continued to grow by leaps and bounds, with an online catalog of more than 15,000 products, of which 2,700 have been tested and feature the USDA Certified Biobased Product label. That list includes everything from plastics and packaging to everyday cleaning supplies, all of which help Americans make choices that lessen their carbon footprint while at the same time investing in new opportunities for working families in America’s rural communities.
In addition to that, biofuels originating in our nation’s rural communities are a key component of the Obama Administration’s all-of-the-above energy strategy and play an important role in reducing America’s dependence on foreign oil. To ensure the energy feedstocks produced by our farmers are put to use, USDA has invested in the infrastructure work needed to build advanced biofuels refineries. With USDA support, six new biorefineries will produce advanced biofuels in Louisiana, Georgia, Oregon, Nevada and North Carolina, in addition to an existing facility in New Mexico previously supported by the program.
We’re also putting cutting-edge innovation to good use by exploring innovative uses for bioproducts. We’ve invested nearly $1 billion through grants, loans and loan guarantees to support over 230 wood energy projects across the country to reduce reliance on costly fossil fuels, support rural economic growth and advance forest restoration. In addition to that, since 2013, the Forest Service has also established cooperative agreements with 16 states to support Statewide Wood Energy Teams to increase the knowledge and use of wood energy.
And, earlier this year, the Biomass Research and Development Board, an interagency collaborative co-chaired by USDA and the U.S. Department of Energy and spanning several vested Federal agencies as well as The White House, released the Federal Activities Report on the Bioeconomy (FARB) that documents the ways the Federal government is developing and supporting the bioeconomy. The FARB identified a Billion Ton Bioeconomy vision and some of the next steps to expand our nation’s economy by reaching the full potential of biomass-derived products.
III. Support for Biofuels and Biofuels Infrastructure
In his State of the Union address in 2011, President Obama reaffirmed his administration’s commitment to government investment in clean-energy technology research, development and deployment as a means to strengthen our national security, protect our planet and create countless new American jobs.
As a part of that, USDA has formed partnerships with the Federal Aviation Administration (FAA) and the commercial aviation industry on Farm to Fly 2.0 . This coalition aims to develop robust and commercially-viable aviation biofuel supply chains in the U.S. In 2014, the U.S. Department of Energy joined the partnership with a focus on supporting R&D as well as demonstration and deployment activities. The national work is being expanded at the regional and state level.
To ensure innovation continues in renewable energy R&D, USDA has invested more than $237 million in research, education and extension grants through the AFRI Sustainable Bioenergy and Bioproducts challenge area. As a result, Alaska Airlines will be able to use 1,000 gallons of biofuel produced by Washington State University in a demonstration flight in the near future. We have also coordinated six regional research centers to ensure profitable biofuels can be sustainably produced from a diverse range of feedstocks across the nation and that U.S. production can meet food, feed, and fiber needs as well as for biofuels.
Unlike other supply-side driven alternative-fuel efforts, the aviation-fuel user community is pulling demand for aviation biofuels. Several commercial airlines have flown demonstration and commercial flights powered by biofuels and have established offtake agreements with fuel suppliers for commercial fuel production. With the right policies in place, the American airline industry will become a ready and willing buyer of competitively priced alternative fuels.
We are also proud of our partnership with the U.S. Navy on a Farm to Fleet program, announced in December 2013. The Department of Defense is one of the largest energy consumers in the world, and is responsible for more than four-fifths of government’s fuel consumption. Farm to Fleet complements the Defense Production Act and makes biofuel blends part of regular bulk fuel purchase and operational use by the military, up to 50 percent. To date, this partnership has led to the procurement of 77.7 million gallons of blended drop in biofuel.
American automobile drivers are also contributing to this sea change in fuel production and consumption. In 2007, according to the U.S. Energy Information Administration, just 1,200 stations across the United States offered E85 fuel for motor vehicles. E85 is motor fuel made with up to 85 percent ethanol, a renewable fuel derived mainly from corn in the United States. Today, more than 3,500 pumps in more than 2,100 U.S. towns and cities offer E85. This growth is the direct result of investments by the USDA, beginning with support for blender fuel pumps able to dispense E85 and other high-ethanol blends as an early part of the Rural Energy for America Program (REAP), which provides guaranteed loan financing and grant funding to businesses to purchase or install renewable energy systems or make energy efficiency improvements. Today, that same commitment is continued through the Biofuel Infrastructure Partnership initiative as USDA partners with 21 states to build nearly 5,000 pumps — more than double current volume — at over 1,400 fueling stations to supply renewable fuels to American motorists. With matching commitments by state and private entities, the program is investing $210 million to strengthen the rural economy, with a $100 million investment by USDA.
Demand for renewable fuels like ethanol is increasing around the world, and that is driving U.S. exports. The United States exported 836 million gallons of non-beverage ethanol in 2015, the second highest volume on record. Despite a two-year decline in U.S. ethanol exports following the record 1.2 billion gallons in 2011, overall exports have trended upward since 2009 climbing to a value of $1.8 billion in 2015. The advantage of increased market diversity, thanks to USDA’s efforts to expand trade and enforce trade rules, was demonstrated with record sales to China, Korea and India in 2015.
USDA is also investing in next-generation fuels. Since 2009, USDA has provided $844 million in loan commitments to businesses to develop and produce advanced biofuels. Companies receiving these commitments are projected to produce 159 million gallons of advanced biofuels. In 2011, under this program, USDA provided Sapphire Energy a $54.5 million loan guarantee to build a refined algal oil commercial facility. Sapphire’s “Green Crude Farm” in Columbus, N.M., opened in May 2012 and is producing renewable oil that can be further refined to replace petroleum-derived diesel and jet fuel. According to the company, more than 600 jobs were created during construction at the facility and 30 fulltime professionals operate the facility. Moreover, Sapphire has already repaid the balance on its USDA-backed loan.
IV. Sustainable Energy Use
Cutting our energy waste is one of the fastest, easiest and cheapest ways to help families save money they spend on other important things while we cut down on harmful carbon pollution. Over the course of nearly eight years, the Obama Administration has taken strong actions that advance energy efficiency in our homes and businesses. Through efficiency upgrades, and private-sector partnerships, America has been able to cut its carbon emissions, create jobs and save families hundreds of dollars at the pump and on their utility bills every year.
Since 2009, we’ve invested $38 billion in electric loans and more than $1 billion for smart grid technologies, helping build more than 185,000 miles of transmission and distribution. Smart grid increases the reliability of electric power by helping utilities better manage the electric grid to improve operational efficiencies. It includes metering, substation automation, computer applications, two-way communications, geospatial information systems and other improvements. Improvements to our rural electric utility systems help to provide reliable and affordable electricity to rural customers, increasing efficiencies, reducing carbon emissions and improving the quality of life in rural areas.
For farms and small businesses looking to reduce their energy consumption and costs, our signature energy efficiency program, the Rural Energy for America Program (REAP), provides guaranteed loan financing and grant funding to farmers, ranchers and rural businesses to purchase or install renewable energy systems or make energy efficiency improvements. Through this program alone, USDA has assisted over 15,000 rural small businesses, reducing greenhouse emissions that are equivalent to removing almost 1.2 million cars from the road annually.
As a part of that, REAP has supported over 4,000 wind and solar renewable energy projects, enough to power more than 158,000 homes annually and more than 100 anaerobic digesters to help farm operations produce and capture methane to produce electricity.
On top of that, we’re taking steps to reduce methane emissions. Methane is both a potent greenhouse gas and a valuable source of energy. Under President Obama’s Climate Action Plan, USDA, the Environmental Protection Agency (EPA), the Department of Energy and the dairy industry have collaborated to complete the Biogas Opportunities Roadmap, Voluntary Actions to Reduce Methane Emissions and Increase Energy Independence, and subsequent update, which identifies voluntary actions that can be taken to reduce methane emissions through the use of biogas systems and increase the use of biogas to help meet our renewable energy goals. The emissions intensity of the production of meat and milk in the United States is already much lower today than it was even a few decades ago.
And because of our commitment to support domestic production and use of renewable energy, USDA is walking the walk too. I’m very pleased that in 2015, USDA ranked eighth among federal agencies and 92 among all sectors in the EPA’s top 100 list of the largest green power users nationally. Using green power helps grow American jobs, helps USDA programs and services become more sustainable and demonstrates to every level of government and private industry that supporting clean sources of electricity is a sound business decision and an important choice to help reduce climate risk.
Header photo: Agriculture Secretary Tom Vilsack stands in front of General Electric’s GE 90–115B, the engine that powers the Boeing 777. Secretary Vilsack was in Ohio to highlight the USDA’s collaboration with the Ohio Aerospace Institute, air carriers and producer groups to develop a Midwest-regional approach to providing renewable jet fuel at G.E Aviation’s Cincinnati-area facilities.