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U. S. Invests $1 Billion In Expanded Biofuel

Th e Agriculture Department will spend $1 billion in the next 12 months to underwrite U. S. biorefineries and in cost-sharing payments for biomass, said Agriculture Secretary Tom Vilsack Feb. 5.

Half of the money would go to the Biomass Crop Assistance Program, now focused on use of forest and sugar cane scrap. Large amounts would be put into loan guarantees to retrofit biorefineries or to build new plants.

Money also would be devoted to helping rural areas adopt renewable energy and improve energy efficiency.

“We will invest somewhere in the neighbourhood of a billion dollars in the course of the next 12 months,” Vilsack told state agriculture directors, describing renewable energy as a potential economic pillar for many regions.

Biofuel production is concentrated now in the corn belt.

USDA estimates it will spend $263 million on biomass crop assistance this fiscal year and $479 million in fiscal 2011, beginning Oct 1. Vilsack said the program would average $400 million to $500 million a year.

The department proposed comprehensive regulations Feb. 3 for BCAP, which went into operation last summer with an offer to help pay the cost of gathering, storing and shipping biomass to produce heat, power, advanced biofuels and bio-based products.

The proposed rule would open the second facet of BCAP – support to farmers for development of renewable crops for use in biomass conversion facilities.

With the publication of the rule, USDA said it would not accept any more applications to participate in the biomass gathering and transport subsidies. Some 400 facilities, including paper mills, sugar mills and electric utilities, are in the program.

In its proposed budget for fiscal 2011, USDA says it would spend $50 million on loan guarantees for biorefineries, on top of $691 million in guarantees this fiscal year.

Renewable energy loans, loan guarantees and grants for rural areas would get around $200 million this fiscal year and in fiscal 2011.

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