BCAP applications for Camila growers

By: Mackinnon Lawrence, Cleantech Law Partners

On the heals of EPA lowering its RFS2 targets for cellulosic ethanol in 2012, Biomass Crop Assistance Program (BCAP) funding is getting a fresh roll-out to incentivise the production of non-food biomass (see What is Biomass?).

At the end of July, USDA Secretary Vilsack announced $45 million in federal contracts for four additional Biomass Crop Assistance Program project areas in six states to expand the availability of nonfood crops to be used in the manufacturing of liquid biofuels.

What is BCAP?

BCAP, created in the 2008 Farm Bill, is intended to assist with the bioenergy industry’s hurdle of continuous biomass availability by providing a source of revenue and mitigating the financial risk of planting new crops. The program helps farmers and forest landowners with the start-up costs of planting non-food energy crops for conversion to heat, power, bio-based products, and advanced biofuels (see examples of BCAP successes).

At its core, BCAP is designed to ensure sufficient biomass is available to reduce America’s reliance on foreign oil, improve domestic energy security, reduce pollution, and spur rural economic development and job creation.

BCAP provides two categories of assistance:

Collection, harvest, storage, & transportation (CHST) — provides matching payment for “eligible material owners upon delivery to qualified conversion facility” which must be utilized “to produce biofuel or bio-based products”

Project Areas program — provides 75 percent of cost to establish perennial biomass crops

Who is eligible to receive BCAP funding?

To be eligible, a producer must be enrolling eligible land located in a designated project area, which is also in compliance with the highly erodible and wetland compliance provisions of the Food Security Act of 1985, as amended. There are no adjusted gross income eligibility requirements or payment limitations for BCAP contracts. The producer must also be establishing and/or producing eligible crops in accordance with a conservation plan, forest stewardship plan, or equivalent plan.

USDA has allocated approximately $45 million for contracts that range between less than five years up to 15 years in the four project areas for producers who volunteer to enroll in BCAP. Producers who enter into BCAP contracts are eligible for reimbursements of up to 75 percent of the establishment costs of the perennial energy crop, and up to five years of annual maintenance payments for herbaceous crops and up to 15 years for woody crops.

What are the current project areas?

The four project areas are all sponsored by advanced biofuel ventures, including:

• Cellulosic biofuels company ZeaChem to encourage the production of hybrid poplar trees in Oregon and supply a biomass conversion facility in Boardman, Oregon
• Abengoa Biofuels to grow up to 20,000 acres of switchgrass in Kansas and Oklahoma for a biomass conversion facility in Hugoton, Kansas
• The final two project areas are targeted for California, Montana, Washington and Oregon to grow Camelina, which is an oilseed that can be grown on marginally productive land and used to produce aviation biofuels. The project has a target of 51,000 acres and is sponsored by Beaver Biodiesel, LLC and AltAir Fuels LLC. The project areas are near biomass conversion facilities in Bakersfield, CA, Tacoma, WA, and Albany, OR.

With respect to Camelina, the market demand is already there. Sustainable Oils and Alt-Air, among others, signed an MOU at the end of 2009 to provide 100 million gallons of Camelina-based aviation biofuels to a consortium of 15 airlines starting in 2014.

In a Camelina Aviation Biofuels report I co-authored, we found that orders for Camelina-based biofuels could be filled so long as obstacles were cleared, such as reducing grower risk and certifying the use of renewable jet fuel for commercial flights. Funding under BCAP addresses the first and the latter was cleared in June 2011.

More information on Camelina Aviation Biofuels.

What about BCAP’s rocky start?

Although the original BCAP rollout was repealed and then redesigned, the program in its current form has played an important role in meeting demand for biomass resources.

Vilsack addressing the issue, stated:

It is true that BCAP got off to a rocky start, but you know to a certain extent, it would have helped us if the legislation would had been more succinctly created and written. Now we know what Congress’ real intent was, they were clear about it, and now we’re putting into place a rule that makes sense that’s focusing the assistance where it needs to be focused consistent with the congressional intent.

BCAP’s future?

As is always the case with federal programs, especially in the new reality of fiscal discipline, you never know which programs will get the ax.

Currently, BCAP’s fate lies in the Senate, as the House of Representatives, in its agricultural appropriations spending bill, eliminated funding for the program. And though the House of Representatives has cut funding for BCAP in its 2012 Agriculture appropriations bill, Vilsack said USDA has the resources to fulfill the contracts and will work with the Senate to try to continue additional funding for BCAP in 2012. According to industry estimates, more than 3,400 jobs in the biorefinery, agriculture and supporting sectors will be created due to these new BCAP project areas, with more than 2 million gallons annually of biofuels manufactured when full production levels are achieved.

The best advice is to go ahead and apply, so long as you qualify.

How do I apply?

By: Mackinnon Lawrence, Cleantech Law Partners

The sign-up period for these new project areas will begin on Aug. 8, 2011. The deadline to sign up is Friday, Sept. 16, 2011.

The project area in California covers 17 counties: Tehama, Solano, Butte, Colusa, San Luis Obispo, Glenn, Tulare, Sacramento, Yolo, Fresno, Kings, San Joaquin, Kern, Merced, Madera, Riverside, and. Stanislaus. The Farm Service Agency, administering the program on behalf of the Commodity Credit Corporation with conservation planning assistance from the Natural Resources Conservation Service and other partners, will enter into contracts with landowners and operators in these project areas. Producers interested in participating in the project areas should visit their local FSA county office.

For additional help, information about BCAP may be found at www.fsa.usda.gov/bcap.