US Senate to Vote on Curbing Biofuel and Wind Farm Subsidies

on Jun 20, 2012

Platts, the McGraw-Hillonline news agencyfocusing on energy and metal commodities, recently reported that the United States Senate is about to take a vote on three key amendmentslimiting biofuel production and renewable energy funding by the US Agriculture Department. According to the article, both the Democratic and the Republican parties will vote on 72 of the hundreds of proposed amendments eligible for debate. Three of the issues that are expected to undergo revision support programs forfarmers, biofuels producers and loan guarantees getting financial support to help build wind energy projects.

In addition, a separate energy amendment proposed bySenator Lamar Alexander, Republican-Tennessee, aims to ban federal support that currently involves loans or loan guarantees for wind energy projects. Senator Jim DeMint, Republican-South Carolina, on the other hand, has proposed blocking the USDA from giving any loan guarantees, which would end much of the USDA’sfinancial support for biofuelinitiatives.

Senator Pat Toomey, Republican-Pennsylvania, has proposed an amendment that aims to end “bio-refinery, renewable chemical, and bio-based product manufacturing assistance.”

Platts also noted that Senators Mike Johanns, Republican-Nebraska and Mike Crapo, Republican-Idaho, are pushing an amendment that would have offered an explicit exemption for non-financial end users, including certain energy firms, from yet-to-be-finalised margin rules for swaps, which are required under the Dodd-Frank Wall Street Reform and Consumer Protection Act. 

!m[](/uploads/story/90/thumbs/pic1_inline.png)Platts reminded that the farm bill, also known as the Agriculture Reform, Food and Jobs Act (S. 3240), was designed to map out the agriculture and food aid policy in the US. It mandates funding for a number of farm programs. Additionally, the farm billoutlines that biofuel programs are to receive $800 million in funding. Of these, $216 million are to be allocated to biofuel producing companies, and additional funding isto be distributed to energy crop farms.

The Senate Agriculture Committee initially backed the farm bill, but according to congressional analysts, the bill may be pushed back, challenged by election-year politics and subsequent general inertia.
Platts further asserted that while there is a high risk that the farm bill may find itself in limbo, the US House of Representatives was presented with the2012 Rural Energy Investment Act, which is very similar the energy section laid out in the Senate farm bill.

The Rural Energy Investment Act, which was introduced by Representative Marcy Kaptur, Democrat-Ohio, is expected to simplify and strengthen renewable energy programs in the country, including the Rural Energy for America Program (REAP) and the Biomass Crop Assistance Program (BCAP). According to data released by the USDA, REAP alonehas created or saved 15,000 jobs over the past nine years.
“Energy programs are a critical part of spurring rural economic development, creating many jobs in rural America and giving farmers and ranchers an additional income stream that helps them to stay on their land,” said Roger Johnson, president of the National Farmers Union.
“These energy programs are also critical in helping the United States become more energy independent and utilize cellulosic and advanced biofuels grown right here at home,” he added.