>> congressman, i think the one issue is this strong tendency to try to diversify and take as many projects into play as possible. and i think even though i can't commend the people at fsa and usda enough for sorting out the complexity of these different programs because they're very complex and trying to understand them, but the emphasis needs to be on seeing programs through to maturity. not just shotgunning. they need to have more of an emphasis on the whole maturation process so the money doesn't fall down rat holes. >> thank you. thank you, mr. chairman. >> i thank you, gentlemen. i have a question to ask and extend to whoever on the panel would like toe respond to it. obviously the initial goal of the energy title in the 2008 farm bill was to spur the development of commercially

viable ethanol and advanced biofuels. however, i'm not sure a single gallon of commercial sale of ethanol has been blended into the fuel supply. it's a two part question for the panel. anyone on the panel would like to respond to. what challenges need to be addressed in order to address that issue. and does the current energy title provide the tools to move towards the advancement of commercially viable ethanol? whoever would -- congressman if ud yoik loo start. >> mr. chairman, as i mentioned the -- first of all, i understand the impatience. we've been impatient as well. the science has progressed nicely. one of the things that slowed us do down was the recent session. it made it tough. as i mentioned in my original opening testimony this plant is literally weeks away. it's completed. the structure is completed they're going to be producing

ethanol literally within the next couple of three weeks. so we're -- we've demonstrated now that the science is there. we demonstrated with the construction of this plant you can build the commercial facility and now being able to demonstrate that we can move those fuels into the fuel stream who are motorized vehicles is the final step to prove the whole concept. >> congressman. >> if i may make a quick short statement on that. since it's become common knowledge globally that we are actually amaeszing a significant amount of biomass as an example, it takes 1,000 acres even 12 tons an acre we produce to produce a million gallons of ethanol on the known conversion rates today. we've had in missouri we've had companies as far as japan come to missouri because of the

awareness now by cellulosic ethanol technology owners of the fact that the price of oil is significantly higher so they're more competitive. but number two is they're finally figuring out the chicken and the egg problem which is you can develop all the technologies, but if you don't have the biomass, you've got -- you have a mismatch. and it does take a significant amount because of b cap and what's happened in our northern ohio congressman and our project area up there, one in northern east arkansas and two in missouri we have had numerous global players come to most most to investigate. >> and chairman holden, you asked about advanced biofuels, i can't speak to seal you losic, biodiesel is an advanced biofuel and one that is commercially available. from our standpoint, the

biodiesel education program which has a modest amount of funding we asked that that continue. it does help and it's very vital to us having marketplace acceptance to our fuel in marketplace. from an advanced biofuel standpoint it is available. it is being accepted in the marketplace. we need to continue that effort. >> well, thank you. now recognize the gentleman from colorado for five minutes. >> thank you, mr. chairman. and thank the panel for being here. i guess first a comment to mr. rainford. we're giving me hope with manure in terms of becoming a fuel if you need a little more supply, we have a horses and a very productive llama that i'd be happy to send that to you. very taylor i'd like to ask you a question. i'm intrigued. we held a subcommittee hearing in small business that i chaired talking about the productive

crop. is that a fairly low water usage crop? is that applicable for areas like mine in colorado and the high so norrian desert. >> it is water tolerant. >> once established. >> the more water it does better. it can survive on less water. on our 300 acre propagation field northwest of wichita, kansas, received only seven ichbls of rain in 12 months last year it was the only thing alive out there. produced half a crop. and survived it. it does survive, but it prospers in areas that would be typically east of there, less arid. >> you commented in your testimony that we need to be able to see the existing projects through to maturity. can you define for me a little bit of what maturity is and when we expect to be able to receive that. part of our job obviously here as well is to be good stewards of taxpayer dollars.

we want to be able to see these -- it needs to be all of the above. or alternative fuels be able to reach a point where they're actually competitive and affordable without subsy dags in the marketplace. >> yes, congressman. i've spent several days in washington in the last year since we've applied for the b. cap funding last winter, two winters ago now. identify had almost no conversations about exit strategies. in other words, the conversations are about initial funding, what your going to dob and what's your vision. but the programs themselves don't seem to have an emphasis on if we get started, what's your exit strategy to get off the public trough. when do we start to see a return on this snvsment. and we think we clearly pointed that out that we needed three

years because biomass is different than if you're funding a single technology. we're not trying to do that. what we're trying to do is break the chicken and egg cycle. we have to get enough biomass in place to encourage the technologies and bring them even to this country if not to our particular locals. >> effectively a three-year window and it will be sustainable on its own we'll be able to build those reserves. i believe it's going to be the next panel we've got a lot of reserves in my area on public lands. dead and down standing timber. >> there are reserves there. we have all over part of the country crp program, crops set aside. which pays farmers not to plant. a lot of that ground we had several people who have crp land to get out of that program and come into this program and put a productive crop on it. it's a perennial you have one

year of exposure of erosion. it's in place for 15 to 20 years. from a conservation standpoint it works nicely. those type of pieces need to be put in place. >> one thing many of us have a problem with is the continual overreach of government when it comes to the regulatory process that we're seeing. in your testimony, the current regulations dictate assessment and other projects, the ill advised effect of pulling the plug. can you tell us how some of the regulations that you're incurring right now are inhibiting your ability to make a cash flowing productive product? >> the whole environmental assessment process is very worthwhile particularly in a crop that's never been planted in any numbers in this country. but the regulations i'm not sure -- i'm not sure if that statement if i understand it right whether we're looking at

regulations as it pertains just to this crop or if i may -- >> i was just trying to go off your statement when you noted some regulatory inhibitions in terms of being able to move forward. >> i think what i'm referring to there is how the regulation is written. the fsa has a tendency even now. we had one year worth of funding. we've made an application this year and may not receive anything which seems proprost rouse to us when we are a successful proven direction in making the process because the emphasis is on spreading -- starting to do many, many new projects as they can get going rather than seeing through to fruition a project that's already going particularly in biomass. it's not a -- it's not a one year event. it takes a long time. you have to do it to get it.

>> thank you, mr. chairman, i yield back. >> i thank the gentleman. i recognize the gentleman from wisconsin for five minutes. >> thank you, mr. chairman. thanks to the panel for coming. i'll start right away with mr. ryanford. i come from part of wisconsin that's the second largest dairy producing area in the united states. digesture technology is pretty popular and millioning more popular. would you share with the panel, if you're willing, what kind of capital you had to invest to put a digesture at your farm. >> back in 2008 it was ours cost me $1.1 million. >> how much of that was subsidized through some type of federal program? not a loan, but pure subsidy grant? >> we had 50% grant money that was through pennsylvania energy harvest grant. >> 50%?

>> 50%. the rest was all low interest, right now it's low interest money. 4% money. >> so roughly about $550,000. >> that's correct. >> true capital investment. >> that's correct. >> how long would it take to pay it back? >> two years. >> two years. am i safe that to say without the subsidy would it have taken four years to pay it back? >> this past year we had an extremely good year simply because we're bringing food waste in from other sources that's a tipping fee. so that gives us about 1/3% of our income from tipping fees. so for the farmers that don't have that access to that, you're going to be looking down the road at probably, five, six, seven years. i'm not sure. i will say this, my son is going through the process. he has a farm down the road that's raising our replacement animals and small cows. he's putting a digesture with the new regulations he's at $1.6 million. so the regulations are changing

since i was there. the cost is going to be higher, but we are finding ways to make it profitable. more profitable. >> are other forms of maneuver as effective as cow manure. >> horse manure no. pigment ore is good. we have a central pennsylvania pigment ore going that's going real well. chicken manure, it's got a be a liquid type. i was at a conference in wisconsin, madison, wisconsin, i know about wisconsin digestures. >> i appreciate your comments. the closest thing to eternal life is a government program. one of my concerns is with all of these programs and if you can respond or anybody else that would like to within the time frame that we have here. it seems to me i'm a former

owner. it seems to me that business owners have the tendency to build pricing based on whatever the subsidy is. and then without exit strategy they're always back here wanting the program to continue. now they've established a marketplace that has been based on a false market premise below price product. how do we know we're not just falling into the same trap here with you all? >> i think i can only speak to the biomass portion of that. i think the fsa rule as it was written was absolutely the thinking was so dead on when they talked about the chicken and egg problem. the payments that we received in biomass did not go to mfao biomass. that went to the farmers to get them to commit acres to enter the program. with that -- knowing that they're in the program then we went ahead and invested the money in the environmental assessments which are hundreds of thousands of dollars.

in designing a plant with an english company that we're now producing in the center of kansas to plant this. it was planted by hand two years ago. the equipment now has been manufactured here. mfao biomass is making all of those investments in what's happening -- what mfao biomass the role that they play is the intergrater the vertical integrator, biomass is a very complex problem to solve, nobody knew where to start with. it's not only a nonexistent crop for the most part in this country, it's a nonexistent industry. so where to start was a huge problem. hence some of the fits and starts with the wood industry and b cap was not what it was intended to do. it was intended to break the chicken and egg problem. the crop is being planted. you need to plant enough of it so we have a critical mass to support the processing facilities.

to attract a 25 or 50 million gallon ethanol cellulosic ethanol plant which we know that tech nothing is advancing takes 50,000 acres. our one project in central missouri we had to demonstrate that our ea that there was three times that amount of available non -- this is land that doesn't compete in the food versus fuel debate. this is land for the most part that is nonproductive. and so in our particular case i think it was very effective money spent and it did exactly what it was supposed to do. but i can't be done in one year. it takes one, two, three years, we didn't even have a planter when we started. we were planting five, ten, acres a day. >> right. is it possible that we're going to be here five years from now and we're still going to hear it's another three years? >> in the technologies i couldn't answer. >> see the concern is, mr.

chairman, can i yield two more minutes. the concern obviously is that as technology advances there's always a need to fund more technology. at some point the industry has to fund it own technology. i appreciate your feed back on that. i'd like to go to mr. greenwood. go ahead. >> what we've done specifically to bridge that gap is we have two, three projects underway. one is a traditional peltizing in a furnace operation which we developed to be able to supply agriculture heating. that's in play with 100 furnaces in play. the second one we've done is this plant is rather remarkable in how it changes the soil structure down four and five feet. missouri's made up of a foot of somewhat topsoil and then a hard clay pen and it's very draught prone because the water doesn't go in. in northern arkansas the reason we're in arkansas the state of arkansas wanted us there because they have a lot of that soil that's been abused. we've had it in four places. we have -- you can five feet

down in a hard clay pan you can break that soil apart because what huge amount of biomass that's up above. there's a similar amount of organic matter in the soil. we are changing the soil complexions that we are for process now signing contracts on our first four installments of epa and waste water projects that are paralyzing cities in the midwest. we're planting and changing the soil complexion with forced below ground irrigation, drip irrigation and contracting to take that waste. even those types of kind of offshoots would never have happened if it wasn't for the b cap program that started to establish this crop. we're finding several industries around it to bridge that gap to get off the public trough. we know when that happens, we have a solid plan for three years. >> go ahead and stop you there. mr. goodman, you've got a unique perspective on this.

you've seen both sides. what's your take? >> thank you, congressman, you're wise to express that concern. looking across the energy spectrum, there are sources of energy, nuclear power, oil and gas and subsidized for a long time. particularly if the price builds in that subsidy, it can't compete without it. then you have the closest thing to eternt life. that's not our vision. our vision is that we will in a relatively short period of time because of the assistance of these loan guarantees which have provided the private sector with some sense of confidence that they can invest in the plant $130 million of private dollars and a plant that is now ready to produce cellulosic ethanol. our scientists believe once we go through this scale up pilot plant to full scale phase will

be able to compete head to head with gasoline particularly as we know the price of oil is not headed in the long run down, but up. we think we'll be competitive and we don't think we'll have to be here year after year with the same story. i think we'll have a success story to tell. >> thank you very much and thanks for being here. mr. chairman, i yield back. >> i thank the gentleman. i thank the members of the first pan. thank you for bringing your experience and your testimony and if there's -- i would ask if any of that members have further questions and we forward them your direction if we expect a prompt response back that would be greatly appreciated. so thank you. at this time i'd like to call forward the witnesses for the second panel. welcome our second panel witnesses. we'll have, mr. john byrd the third a virginia free farmer and board of trustees of the

american forest foundation from woodford, virginia,. mr. randy dye, state foerster of west virginia. president of the association of state forthers out of sharlton, west virginia. mr. charles a.m. holmes chairman forced resource policy group. the national association of conservation districts from alabama. mr. richard swab procurement manager on behalf of the american loggers council and southeastern wood producers association from perry, florida. and mr. michael t. gorgan junior executive vice president and ceo of the society of american fosters in bethesda, maryland. it looks like our second panel is all seated. i now recognize mr. byrd, you please begin with your five minutes of testimony. >> good afternoon, thank you.

sorry, thank you for allowing me to appear before you this afternoon. i extend that thank you to chairman thompson and to ranking member holden as well as the other members of the subcommittee. a bit of an introduction. we manage a family forest in central virginia. i also have the pleasure of working with the american forest foundation, a nonprofit organization whose mission is among others to encourage health thi forests. we speak for ten million landowners, those are family forests or private landowners. allow me to set the stage a bit for my testimony. the property that i manage for our family has been in our family for six generations. we grow both pine and hardwood and from those trees we produce paper products or paper products are produced, pallets, hardwood lumber, dimensional lumber,

cabinets, flooring, fuel wood and other uses. in addition to these very important products which were important to the economy of our state and produced jobs, we also pride ourselves on the water quality because the forest is really the watershed for our water. we also pride ourselves on the wildlife. forests are nothing more than habitat for many of the species that we cherish. what i would like to do is to refer you to my written testimony. i will try to truncate my oral testimony so we end on time. i'm going to focus my comments in two particular areas. the first area is to thank and to encourage this committee and to recognize the importance of the farm bill in strengthening conservation programs. the second area of testimony is to speak a bit about the need to focus or refocus the usda's

biobased markets program to better recognize certain products that are not properly recognized now, we believe. there are a number of stories in my written testimony about landowners who work hard on their property and who benefit from the forest conservation programs. since i'm before you today, i'll share with you some of the things that we have done on our farm. through programs such as whip, equip, crp and csp, we have been able to do things which would not in and of themselves have been financially viable without the assistance of these programs. we have improved wile life habitat, water quality, and reduced the risk of fire through certain techniques. we've created jobs for the local loggers and have improved the health of the forest. we realized that this committee and congress as a whole faces a

significant budget issue. and my request to you would be to -- with that recognition if cutting has to occur that forestry and conservation programs not to be cut disproportionately. my second area of focus in my oral testimony, by the way, i refer you to the written testimony for additional details on the first point as well as second point, is that the usda biobased markets program it's misfocused or an interpretation it does not fully support products that come from our farm with respect to labeling and frl purchasin purchasing. despite the fact that the legislation refers to forestry materials. we're pleased that chairman thompson and congressman schrader are considering this inequity and considering a bill which probably will be entitled

the forest products fairness act to better square what's going on with what should be going on. and in particular this is a program that could be changed without incurring any additional costs. it would stimulate and open and level the marks for biobased products particularly with respect to traditional forest products. it could be done with little or no costs. which seems like a win-win all around. in conclusion, we appreciate the work of this committee both past and future and hope that you will continue these forest conservation programs to enable landowners like myself to continue to be good stewards of our land. thank you and i look forward to your questions. >> please go ahead and proceed when you're ready. >> chairman thompson, members of the subcommittee, thank you for the opportunity to appear today

on behalf of the national association of state foresters. as stewards of more than 2/3 of america's forest, in state and private ownership, state forest es deliver outreach, technical and financial assistance as well as wildfire protection in partnership with the u.s. forest service, nrcs and other u.s. aid agencies. my comments this afternoon recommendations for the 2012 farm bill endorsed by state foresters that support the conservation and management of the nation's forest, my written statement includes a complete set of priority recommendations from nasf. the development of statewide forest resource assessments and strategies was an important outcome of the 2008 farm bill. these forest action plans provided analysis of forest conditions and trends in each state and delineate a priority

role in urban forestland scape issues and areas. common among the threats to forest identified in the forest action plan include forest pests, invasive species, fuel loads and wildfire, loss of forest to development, threats to urban and community forests. the forest action plans also provide long-term strategies for applying state, federal and other resources to where they can most effectively stimulate and leverage desired action and engage multiple partners. state foresters recommend that the 2012 farm bill provide the necessary financial and an litical support to implement and update the forest action plans. nasf joins the forest in the farm bill coalition in support the recommendations that help implement the forest action

plans. the coalition recommends including strong provisions for forest in conservation programs, strengthening forestry outreach, education, research and inventory programs, combatting forest related invasive species, improving forest market opportunities. included in the strong provisions for forest in the conservation programs nasf supports potential consolidation of conservation title programs providing that forestland owners eligibility is maintained in a streamlined program. we recommend the 10% cap on the number of forest acres enrolled and csp be removed to allow forestland owners the same access to the program enjoyed by farmers and ranchers. strengthening forest outreach, education, research and inventory programs, the forest

inventory analysis program managed by usda forest service is the nation's only comprehensive forest inventory system for accessing the health and sustainability of the nation's forest across all ownerships. fia provides essential data related to forest species composition, forest growth rates, and forest health data and delivers baseline inventory estimates used in state forest action plans. nasf supports providing strategic direction for implementation of fia programs including completing transition to a fully implementing the program in all states, engaging state foresters and other users of fia data to re-evaluate the list of core data variables, in fostering greater cooperation between state foresters and the