agriculture and conservation interest groups testified. this is two and a half hours. good morning, everyone. this hearing of the subcommittee on conservation, energy and forestry is to discuss energy and forestry programs in advance of the 2012 farm bill will come to order. first of all, let me extend my apologies. votes have a way of getting in the way of things here, and so i apologize for the delay of the convening of this subcommittee hearing. i really appreciate the patience of all those who are here, certainly our witnesses, and we're looking forward to hearing your testimony. let me get started by saying this is the final hearing of the subcommittee -- hearing that the subcommittees will hold to review the farm bill programs before writing the legislation next month. we had witnesses from usda testify before the subcommittee last summer, offering us

information on the scope and purpose of each program, and stakeholders who work with these programs and can offer insight on ways to improve their functionality. the first energy title was written in 2002 farm bill to spur development of renewable fuels across rural america, designed to help develop fee stocks and increase energy efficiency and energy supplies for rural americans. the 2008 bill expanded more than $1 million to existing and new energy programs. this money was provided for developing advanced biofuels beyond corn ethanol. there are many resources in my pennsylvania district that can be used in the advanced production of biofuels. timber can be used for energy or heat production.

programs such as the biomass crop assistance programs, better known as bcap, were developed to foster the creation of the next generation of advance ed this program has received over $900 million in appropriations. i think it's fair for this subcommittee to ask whether or not this program has achieved its purpose, whether or not it needs to be altered in some ways and if there are new sources of biomass established for energy production as a result of this program. other programs like the rural energy for america program, commonly known as reap were expanded to assist small businesses to implement energy efficiency measures and renewable energy systems. we should be certain that farm bill energy programs do not favor one region over another and that the programs are operating as congress intended. i should note that the last two farm bills were written during

more favorable budgetary times than the situation we find ourselves in today with the biofuels. federal deficit and the increasing national debt. indeed 37 programs in the farm bill do not have a budget baseline beyond its expiration, including every core program in the energy title. now this means that not only will we not have the $1 billion that was made available for the last farm bill, but we will not have allocated any mandatory money for continuing these programs. this is a tremendous challenge in these fiscal times as we look for ways to cut spending and make government more efficient yet still achieve our desired goals. our panel witnesses will offer us their feedback on what is most important to them in the energy title given the budget constraints we have moving forward. our second panel of witness es will discuss forestry and the farm bill. we share forestry jurisdiction with the national resources committee. our jurisdiction includes state

and private ownership, landowner assistance programs, forestry research as well as oversight of the forest service. over the past year and a half this subcommittee has been very engaged with the forest service, which as many of you know is located within the department of agriculture. several members of the subcommittee, including myself, have forest lands in our districts and appreciate the importance of the forestry in supporting a healthy and vibrant rural america, but proper forest management and the role of the forest service goes far beyond the interests of the members of this subcommittee. the forest services manages 125 forests and grasslands which makes up 193 million acres across this great national. since their inception national forests have been intended for multiple uses, including timber harvesting, energy production, mineral extraction and recreational activities. the forestry title of the 2008 farm bill included several diverse provisions pertaining to all aspects of forestry, including the forestry sector's participation in conservation and energy programs.

though many of the forestry pals do not need to be reauthorized in this farm bill, it is important for us to review these programs to be sure they're being carried out in manner consistent with their purpose. we will hear ideas for improving program delivery for forest landover and those in the timber industry and learn of tools that could be used in timber harvestry. we'll discuss the regulation of forest logging roads. i want to briefly address the topic of forest road regulations since i know it affects several of our witnesses today. i've been very concerned about this matter since the ninth circuit ruled last year that forest roads can be considered a point source under the clean water act and therefore subject to the permitting process before any trees can be cut.

the ninth circuit decision has been appealed to the supreme court and if the court does not decide to hear the case it will likely move forward to the epa. this would be an unnecessary action given that the best management practices administered by states since 1976 have worked effectively and have not put an undue burden on the forest products industry. now, we will continue to monitor these developments if the epa moves forward with a nationwide permitting process, congress must act to clarify the existing state's specific best management practices that are adequate for protecting our water sources. further regulations are necessary and will carry a heavy burden for rural america. i want to thank our witnesses for being here today, and i look forward to working with you as we move forward on this process, and i now yield for purposes of

an opening statement from the ranking member, my colleague from pennsylvania. >> thank you, mr. chairman. i would like to thank our witnesses for being here as well. this promotes an important opportunity to look at the programs in advance of the new farm bill. the 2008 farm bill included many new provisions to move our country toward energy independence. the bill expanded many of the new energy programs originally authorize medical in the 2002 farm bill. the 2008 farm bill promoted a move towards advanced biofuels and demonstration of biomass-based renewable informing. the bill also provided close to $1 billion in investments demonstrating to a promising but fragile industry our commitment -- demonstrating our commitment to the renewable energy production. unfortunately, implementing many of these energy title programs has been slow, leading to uncertainty in an industry we intended to strengthen and support.

it is also unfortunate that there's no mandatory money for the programs once the program expires. this puts us in a more difficult situation made even more so during this challenge iing fisc environment. similarly, the forestry title, which impacts forest land, management and 155 national forests and 20 grasslands in the national forest systems does not have any mandatory funding. to accomplish our goal of a well managed agency dedicated to forest stewardship that continues to meet the needs of present and future generations, we must make sure that forestry title policies are fulfilling the mission of quality land management for multiple uses. at the same time, we have to ensure that forest landowners continue to have access to conservation programs in order to further -- further private forest land conservation. to sustain healthy, diverse and productive forest and expand domestic renewable energy, we must all work together and make

certain we spend taxpayer dollars wisely. thank you, again, mr. chairman, for having this hearing and i look forward to hearing from the witnesses. >> i thank the gentleman. the chair would were that the other members submit their opening statements for the record so the witnesses can submit their testimony and make sure there's ample time for questions. in the first panel we're joined by the honorable jim greenwood, a pennsylvania congressman. someone i've enjoyed the opportunity to work with going back to his state legislature days. he's currently president and ceo of the biotechnology industry organization located here in washington, d.c. we're also joined by mr. ryan stroschein, excellent. you only come into this world and leave with one thing and that's your name and i hate to

really mess them up. all right, great. director of agriculture energy coalition here in washington. somewhat of a neighbor of mine, neighboring just over the line from mifflin town, pennsylvania in juniata county, mr. steve reinford, owner and operator of reinford farms. mr. jerry taylor, president and chief executive officer mfa oil company, co-founder mfa oil biomass llc in columbia, missouri. and mr. gary haer, chairman of the national biodiesel board in washington, d.c. so welcome, gentlemen, and thank you for bringing your expertise and experience to this subcommittee hearing. congressman greenwood, please begin when you're ready. >> chairman thompson, ranking member --

[ no audio ] >> jim, you're out of practice. >> i'm out of practice. i usually have somebody do that for me. so chairman thompson and ranking member holden and distinguished members of the subcommittee, i thank you and appreciate the opportunity to be with you today. my name is jim greenwood. i am the president and ceo of the biotechnology industry organization. we have more than 1,100 members worldwide. with its broad membership, innovative biotechgy companies, we are developing new feed stocks, catalysts for advanced biofuels and bio-based products. because these food stocks are based on plants and biological processes, they are more efficient, sustainable and environmentally friendly.

importantly the development and use of biomass for fuels and chemicals by a necessity cannot be outsourced to other countries. ten years ago this week, less than a year following the attacks of september 11th, president bush signed into law a farm bill that for the first time embraced the vital role american farmers and foresters can and must play in producing domestic energy and, therefore, improving national security in rural economic prosperity. because of bipartisan congressional support in 2002 and again during the 2008 farm bill,ing a cultural energy programs are revitalizing rural communities and ushering a new generation of advanced biofuels, renewable chemicals and bio-based products to the cusp of commercialization. in short, the farm bill energy programs are working and biomember companies are beginning to put steel in the ground.

and please allow me to share with you a few examples. there's the first slide. new planet energy are preparing to open the indian river county bioenergy center near vero beach, florida, within the next few weeks. it is a major landmark for this country. it's the first commercial cellulosic refinery, and as you can see it's for real. there's a lot of steel in the ground there. the biorefinery assistance program which is a valuable farm bill energy initiative helped them attain debt financing from a farm credit agency with a long history working with usda lending programs. lending in turn created over $130 million in private investment for a project that will produce 8 million gallons of cellulosic ethanol and 6 megawatts of renewable energy per year from renewable biomass

such as yard waste or moroccan islamic combatant group municipal solid waste and create 380 direct or indirect jobs. raising private capital investments to build this first of kind facility would have been nearly impossible in today's financial environment without the biorefinery assistance program. i'm not sure what you're doing there, but i'm going to get the next slide up, if it's possible. there we go. that's a project based in lakewood, colorado. it's using biotechnology breakthroughs to convert fast-growing poplar trees to chemicals and cellulosic ethanol in central oregon. another valuable farm bill energy program, the biomass crop assistance program, or bcap, helps farmers in the counties surrounding the facility to grow the trees that will feed both the demonstration project and the commercial facility when it is completed in the next few years.

their commercial biorefinery will employ 100 people and invest several hundred million in local infrastructure. it will also provide employment opportunities to another 442 people. another company based in warrenville, illinois is leveraging the biorefinery assistance program to secure private capital for a commercial-scale cellulosic biorefinery in green county, alabama, that is expected to create as many as 1,000 new jobs. farm bill energy programs such as the bio-based markets program are also fostering innovation and domestic job creation in the renewable chemicals and bio-based products sector. this is a project of one of our biomembers investing in the united states by building a $30 million pound per year commercial cacinic acid

biorefinery in lake providence, louisiana. the biorefinery will create 50 full-time jobs and will revitalize the port of lake providence. the bio-based markets program is expanding consumer awareness of these promising alternatives to petroleum-deprived chemicals and products, through consumer labeling and procurement procedures. opening the biorefinery assistance program to renewable chemicals would further accelerate these promising technologies. my written testimony, which you have before you, includes several additional examples of the tremendous impact energy title programs are having in rural economies. biotechnology is unlocking the potential to create new opportunities for the rural economic prosperity.

they are speeding technologies to commercial reality. it is vital for our nation's future that we continue investments in america's energy and agricultural futures as the senate agricultural committee acknowledged when it passed mandatory funding for these programs in the bipartisan bill that passed the committee last month on a vote of 16-5. i urge this committee to do its part as well and to reauthorize farm bill energy programs with meaningful mandatory funding. thank you, mr. chairman. >> thank you, mr. greenwood. mr. stroschein, please go ahead and proceed with your five-minute testimony. >> thank you, chairman thompson, ranking member holden. good to see you again. i appreciate the opportunity. i'm ryan stroes shin. i'm with the agricultural energy coalition. i was raised on a farm in south

dakota which my family still operates and i've seen firsthand the growing impact on agricultural renewable energy in the economy. it was created in part to support the important energy programs contained in the farm bill to urge continuation tore meaningful funding for these programs and promote policy changes that will make them even more effective. in the 2002 and 2008 farm bills bipartisan majorities in congress recognized the potential for american farmers, ranchers, rural landowners and entrepreneurs to create clean, domestic, renewable energy and bioproducts by providing significant resources to the programs in the energy title. these foundational policies have transformed the promise of an emerging cleerp, renewable, sustainable rural energy sector into a growing reality. a continued commitment to these goals will accelerate this momentual and is a vital

component of the all of the above energy strategy that has significant bipartisan support here in congress. across the country, we've already seen successes from these initiatives as mr. greenwood pointed out. first of their kind biorefineries will be producing biofuels in florida and elsewhere. wind turbines are providing power to farms and ranches from maine to california. bio-based products such as bioplastics and solvents are being produced in states like pennsylvania and michigan and ohio and other places for industrial applications, and the investments that have delivered these benefits have been relatively modest. the 2008 farm bill allocated only 0.7% of the total program. programs have funded projects in all 50 states and leveraged tens of millions of dollars in state and private sector investments that would not have materialized without these programs. it's also a significant job creator.

usda estimates that the bcap and biorefinery assistance programs alone have the potential to create as many as 700,000 now jobs. the bio-based markets program is estimated to have the capability to create 100,000 new jobs. these three programs, along with the rural energy from america's program, are among the core programs our coalition is supporting and urging this congress to reauthorize and fund. without an ongoing commitment to this effort, america's leadership commitment on this endeavor will erode. this will undermine our economic and environmental and our national security and could put the u.s. in a position of purchasing and importing these technologies from foreign companies and countries in the years ahead. this covers the entire renewable energy bioproducts and wind power works very well in the midwest and west.

solar power works across the country, particularly in the west and the south. biogas potential is huge in livestock and dairy areas, and bioproduct manufacturing has already begun to develop near industrial hubs and the potential to use biomass exists from coast to coast. in other words, every corner of the country will benefit because these programs allow them to exploit their individual inherent natural resource bases. the senate agriculture committee recently agreed that the investments in the energy title programs are worthwhile by adopting a bipartisan farm bill that maintains mandatory funding for these programs and makes improvements to several of these core energy title programs. the ag energy coalition supports this outcome and believes that the farm bill, the final farm bill, should include these investments. rural america has been at the epicenter of our nation's burgeoning new renewable energy and bioproducts industries, and farmers, ranchers and rural small businesses and rural economies have already begun to realize the benefits. american agriculture and the rural communities it supports has demonstrate that had it has the vision, the entrepreneurial,

the optimism and the tenacity to continue to develop these important and lucrative new industries if it's provided with the tools to do so. a continuing commitment to these farm bill energy title programs will promote the expansion of american energy drives, drive enovation that we can export to the rest of the world, materially enhance our environment and national security and assure that we continue to lead the world in the development of these lucrative new industries. for this reason we urge this committee and congress to reauthorize these vital energy programs and provide them with robust mandatory funding that will enable them to continue to do their good work throughout the life of the next farm bill. thank you. i look forward to your questions. >> thank you, sir. mr. reinford, go ahead and proceed with your testimony, please. >> thank you, chairman thompson and members of the committee. >> i wasn't aware until i actually got your invitation that you were one of my

neighbors so it's a joy to be here with a fellow pennsylvanian here. this is my first time doing something like this, and i feel privileged and honored to be here. i'm not quite sure how it all turned about, but i had only an eight-day preparation time. i want to take the time to thank you guys for allowing you to share my experience. i've been here in this business now probably for eight years, eight years sharing my experience on renewable energy and how it all happened here at reinford farms, and thanks so much for the incentives i got from the usda in conjunction with some of my bank guys helping me. we actually put up a new system, a very profitable system in one of the pennsylvania farms here so i'm here to share a little bit of that story, and one of the main reasons i did it was because of reduction. in pennsylvania i did have a gentleman move into my urea here. he was a police officer from one of the larger cities, and his complaint was odor all the time. i actually went to work, and we actually put together this

system, and i guess a lot of people are looking at what i'm doing and that's one of the reasons i'm here to share and hopefully promote this technology to continue to move forward in the next -- next years ahead here. additional income that i've received from that, the first couple of years, it was on the low side. i -- i actually managed to do some other -- invent some other technologies and bring them on to the farm. the last income statement we got, there were net profits of a little over $300,000 on dairy farm, and that's pretty good. when you start making as much money at the back end of a cow as you can the bottom it's really an appealing thing to us, and that's what's drawing attention. it's very vishlt environmentally friendly. community likes me. i haven't had a complaint since i've had it in here and right now as i sit here i think there's probably 24 active digesters in pennsylvania and we're shooting at 28, 29 by the end of this year, so we are kind of the front-runner i think in

renewable energy for digesters, and i'm kind of proud of that, along with some other states here. my experience all started when i sent my son to college, and when you do that, you never know what they are going to come back with. they actually got me started in this whole technology of renewable energy. i didn't know nothing about it eight years ago, but right now they say i'm one of the front-runners in pennsylvania so i guess i'm here to tell my story. i'm here to hopefully promote this technology and will continue to move forward. it's very economical and very practical sorts of things. one of the things i want to familiarize yourself with, i won't give the next statement there but digestion, kind of a different thing, you take a ton of mature or food waste and make energy out of it, and can you actually supply energy to your neighbors and everybody seems to like that. that technology, i can't explain it, but it does work. it's amazing technology, and it's really coming alive here if

i know the state of pennsylvania. that's why i say pennsylvania, i haven't really been in other states. i talked to a young -- i talked to an older gentleman from lancaster, and he's the guy that got me started in this whole thing. i did a lot of research and a lot of work before i got started here eight years ago, so actually i took a lot of digests and duplicate it had and made something that turns around a pretty good profit. one of the things i want to say, we sized our digester for 100,000 cows, future expansion, i'll get to later, three sons work with me and didn't know how big we would get in pennsylvania. 500 cows is pretty big dairy. i got a phone call with a partner from walmart and grocery stores and wanted to know if i wanted to bring in other sources of food waste into that thing so i started putting food waste in my digest, and to my amazement we actually doubled production and food waste has three and a half times more energy than the cow waste so i'm hoping down the

road we can partner with the food waste industry and be a big part of agriculture, especially in the dairy and hog industry here. we can take that -- their product out of land fills and put it into something we can make renewable energy. it's a win-win for everybody and for the community and economy. we power right now about 800 -- i mean, 80 and 100 houses plus run my whole farm, so it's kind of amazing, amazing technology when you cake cow ma, new used to be a waste product for us. in junta county people turned it into a commodity. just another amazing commodity. heat from the generator is actually where we made a lot of our money off of or actually got that technology actually heating the house, the barns and everything in the barns. you can read the paragraph there. we pasteurize milk and dry corn and the latest act, i bought my wife a chevy volt so we're powering our transportation off energy and it's kind of neat for

us at reinford farms. we came down to washington -- we came down to washington with our chevy volt but ran out of energy coming up the road waiting to plug the thing in. couldn't find any outlets to plug it. in a little sidekick there. the deciding factor with me for putting this system in play was actually because of the grands i got from reap and also from the local banks. i'm a big supporter of this whole technology and i'm running out of time. i want to say a big thank you from my family. i have another picture. i think you guys got my paper here i sent down here. if it weren't for my three sons in this business i wouldn't be where i'm at. i want to say thank to you my sons publicly, and actually it helps bring the next generation into dairy farms, so i'm passionate about -- i'm not used to running on the time clock here, sorry about that. i'm passionate about this technology and i'm willing to stick out my neck like i am now to promote this for future

generations, and for agriculture. i think it's amazing technology, so thank you, mr. chairman. >> thank you, mr. reinford, and we'll make sure that the folks in washington who can't find a place to plug in their vote that there is a place in junta county. mr. taylor, we recognize you for five minutes. >> thank you, chairman. ranging member holden and members of the subcommittee, thank you for the invitation to testify today on the energy bill, the title programs and in particular the biomass assistance program or bcap. i'm jerry taylor and president and show of a farm energy cooperative. we supply fuels, lubricants and propane to customers in seven states. our cooperative has a long history in leading renewable fuels innovation. starting in the 1960s mfa oil