ethanol? >> i understand the impatience, we have been impatient as well. the science is progressing nicely, one of the things that slowed us down was the recent recession. it made it tough, but 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 cellulosic ethanol in literally the next few weeks. i think we have demonstrated with the production of this plant you can build a commercial facility and now being able to demonstrate that we can move those fuels into the fuel stream for motorized vehicles the s the final step to prove the whole concept.

>> congressman, one short quick statement on that, it has become common knowledge globally that we are actually amassing a significant amount of biomass, it takes 1,000 tons an acre. to produce a million gallons of cellulosic ethanol. in missouri, we have had companies as far as japan come to missouri because of the awareness now by cellulosic ethanol technology owners of the fact that, one, 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 that if you don't have the biomass, you've got -- you have a mismatch. and it does take a significant amount of -- and because of v-cap and what's happened just

in our northern ohio congressman and our project area up there, one in northern east arkansas, two in missouri, we have had numerous global players come to missouri to investigate. >> and chairman, you have spoken -- advanced biofuel and it's one that commercially available today and from our standpoint, the biodiesel education program which has a modest amount of funding, we ask that that continue because it does help and it very vital to us having market place acceptance of our fuel and marketplace. and so from an advanced biofuel standpoint, it is available, it is being accepted in the marketplace, woe just need to continue that effort. >> now i recognize the gentleman from colorado for five minutes. >> thank the chairman and thank

the panel for being here, this is first kind of a comment from mr. rainford, you're giving me hope with manure, in terms of becoming if you need a little more supply, we have some hou hours -- some horses and a very productive lama. talking about the campus gigantus to be able to -- applicable for areas like say colorado and the sigh sonoran desert. >> once established, more water it does better, but it can survive on less water in fact. and our 300 acre propagation field which is northeast of wichita, kansas, received only seven inches of rain in 12 months, it was the only thing

alive out there, it produced half a crop and survived. but it does survive but it prospers in areas that would typically be east of there, less arid than what you expect. >> you commented in your testimony that we need to be able to see the existing projectsthrough to maturity. can you define what maturity is and when we expect to receive that? part of our job here is as well as the good steward of taxpayer dollars. it needs to be all of the above and our alternative fuels will be able to reach a point to where they're actually competitive and affordable without sub sid days in the marketplace. >> i have spent several days in washington in the last year since we have applied for the v-cap funding last winter. two winters ago now. and i have had almost no

conversations about exit strategies, in other words the conversations in the initial funding, the programs themselves don't seem to have an emphasis on, okay, 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 investment? 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 locales. >> so you see a three-year window, you see it sustainable on its own, we'll be able to have reserves.

we have actually got a lot of reserves in my area on public lands, dead and down standing timber. >> we have in all over the central part of the country, a crp program, crop set aside that which pays farmers not to plant. a lot of that ground, we have several people who have crp land who would like to come out of that program and come into this program, put a productive crop on, it's a perennial, even though you have one-year exposure of erosion, those types of pieces need to be put in place. >> the continual overreach of government when it comes to the regulatory process. 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 inhibitings your ability to make a cash flowing productive product? >> well, the -- i'm not sure in 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 actually off your statement where you noted some regulatory inhibitions in terms of being able to move forward. >> i think we're referring to there is how the regulation is written, the fsa has a tendency as of now, we had one year worth of funding, we had application this is year and may not receive

anything, which seems preposterous to us when we are actually a successful proven direction in making the progress because of the emphasis on spreading the -- and starting to do many new projects as they can get going, rather than seeing through to fruition a project that's already going, particularly in biomass. because 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 now recognize the gentleman from wisconsin, mr. rubble for five minutes. >> thanks to the chairman and to the panel for coming. i will start with mr. reinford. i come from wisconsin which is the second largest dairy producer in the united states. would you mind sharing with the panel if you're willing what type of capital expense you had

to invest to put a digester technology at your farm? >> yeah. there we go. yes, our digester cost $1.1 million. >> how much of that was subsidized through a federal program? not a loan but a pure subsidy grant. >> we had 50% grant money, that was through energy harvest grand. >> 50%? >> 50% and the rest was low interest money. >> so ruffly about $550,000? >> yes. >> how long will it take to pay it back. >> two years. >> am i safe to say that without this subsidy it would have taken four years to pay it back? >> this past year we had an extremely good year. simply from bringing food waste

in from other sources and that's a tipping fee. and so that gives us about a third of percent of our income from our tipping fees, so for farmers who don't have access to that, you're going to be looking down the road, five, six, seven years. my scientist is going through the process who's actually replacing animals and cows. with the new regulations, he'sed a 1$1.6 million. we are at a point where we can make it more profitable. >> isn't other forms of manure as good as cow manure? >> not horsem man entrepreneur.

-- i was -- i know all about wisconsin digesters, good place. >> mr. taylor, i appreciate your comments on a exit strategy. comments around this building are that the closest thing to eternal life is a government program. one of my concerns with all of these programs, and if you could respond within the time frame that we have here, it seems to me and i'm a former business owner, it seems to me that business owners have a tendency to build pricing based on whatever the subsidy is. and then without an exit strategy, they're always back here wanting the program to continue, because now they have established a marketplace that has been based on a false market premise, below fries product. how do we know we're not just falling into this same trap here with you all? >> well, i think i can only speak to the biomass portion of that.

but i think the fsa rule as 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, they went to the farmers, to get them to commit acre into the program. with that, knowing that they were in the program, then we went ahead and invested the money in the environmental assessments which were hundreds of thousands of dollars in designing a planner 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. equipment now is manufactured here. mfao biomass is making all of those investments and what's happening, the mfao biomass, the role that they play is the vertical integrator, biomass gave us a very complex problem

to solve because nobody knew where to start with it. it's not only a nonexistent crop for the most part in this country, it's a nonexistent industry. where to start was a huge problem. hence, some of the fits and starts with the wood industry and v-cap originally was not what it was intended to do, it was intended to break the chicken and egg problem. the -- you have a critical mass to support the processing facilities to attract a $25 million or 50 million gallon cellulosic ethanol project. we had to demonstrate with 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. and -- but it can't be done in one year, it takes one, two, three years because we didn't even have a planter when we started. we were planting, five, ten acres a day. >> is it possible that we're going to be here five years from now and we're still going to be hearing another three years. >> in the technologies, i couldn't answer that. >> the concern is, and mr. chairman, let me yield two more minutes? >> yes. >> the concern obviously is that as technology advances there's always going to be a need to fund more technology, and at some point the industry has to fund its own technology. so i appreciate your feedback on that and i would like to go to mr. greenwood. go ahead. >> just one -- what we have done specifically to bridge that gap is that we have two, three projects under way. one is traditional pelletizing in a furnace operation to be able to supply agricultural

heating. that's in play, with 100 furnaces in play. 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 topsoil and then there's a hard clay pan, and it's very drought blown because it doesn't sink in. the state of arkansas wanted us there because they have a lot of that soil that's been abused. we have nit four places. five feet down in a hard clay pan, you can actually break that soil apart, because there's a huge amount of biomass that's above, there's a similar amount of organic matter of the soil and we're now changing the soil complexions, we're signing contracts on our first four installments of wastewater, the epa and the wastewater projects that are paralyzing cities in the midwest right now. we're actually planting this which is changing the soil

complexation with forced below ground irrigation and contracting to take that away. those kinds of offshoots would never have happened that started the v-cap programs that started to develop this crop. so there's several industries around it to bridge the gap to get off the public trough, we know when that happens, we have a very subtle plan for three years. >> mr. greenwood, you've got a unique perspective on this. what's your take? >> thank you, congressman, i think you're wise to express that concern. we have looked across the energy spectrum, there are sources of energy, whether it's nuclear power, whether it's oil and gas. which will be subsidized for a very, very long time. if the price builds in that subsidy, it can't compete without it, and you have the closest thing to eternal 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 plan $130 million of private dollars in a plant that is now ready to produce cellulosic ethanol. once we go through this scale. we think we'll be competitive and we don't think we'll have to be back here year after year after year. when you have all been replaced by others. and with the same story, i think we'll have a success story to tell. >> all right, thank you very much and thanks for being here. mr. chairman, i yield back. >> i thank you, gentleman, i and i thank the members of the first panel. thank you for bringing your experience and your testimony

and if there's -- i would ask that any of the members have further questions and we forward them in your direction, if we expect, you know, kind of a prompt response back, that would be greatly appreciated. so thank you. at this time i would like to call forward the witnesses for the second panel, to welcome our second panel witnesses. we have mr. john burke iii, virginia treefarmer and the board of trustees and the american forest foundation from woodford, virginia. mr. c. randy dye, state forest of west virginia. he's part of the national association of state foresters out of charleston, west virginia. charles a. holmes, the choice resource policy group, the national association of conservation districts in . dr. richardman, on behalf of the

american loggers council, from perry florida and mr. michael t.gorgan junior. and it looks like our second panel is all seated so i now recognize mr. burke, if you please begin with your five minutes of testimony. >> good afternoon. [ no audio ] >> sorry. thank you for allowing me to appear before you this afternoon. i extend that thank you to chairman thompson and to ranking member holder as well as the other members of this 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 healthy forests.

we speak for 10 million landowners, those are private forest or private landowners. allow me to set the stage a bit for my -- my family spans 6 generations. from those trees, we produce paper products or paper products are produced, fuel wood and -- it's very important products which are important to the economy of our state and produce job. the forest is really the water shed for our water. we also pride ourselves on the wildlife, for estes are nothing more than wildlife. >> i want to refer you to my

written testimony so that we ends on time and 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 market 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 with you today, i'll tell you some of the things we have done on our farm, through

programs was whip, equip, crp and csp, we have been allowed to do things that would not van financially viable without the assistance of our programs. we have improved wildlife habitat, water quality and reduced the risk of fire through certain techniques, we have created job force the local loggers and have improved the health of the forest. we realize that this committee and congress has a whole faces a significant budget issue. and my question would be, with that recognition, if cutting has to occur, that forest try enhancement programs not be cut disproportionately. my second focus on my testimony. by the way i refer you to the additional testimony in the first point as well as the second point. is that the usda's biobased

markets program is misfocused for an interpretation it does not fully support products that come from our farm with respect to labeling and federal purchasing, despite the fact that the legislation refers to forestry materials. we are pleased that chairman thompson and congressman shrader are condition -- to better square what's going on with what should be going on. and in particular, this is -- this is a program that could be changed without incurring any additional costs, it would stimulate and open and level the marketings for biobased products, particularly with respect to traditional forest products and it could be done with little or no cost, 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. >> thank you mr. burke. mr. dye, 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 two-thirds of america's forests and state and private ownersh ownerships, state forests receive outreach and financial assistance as well as wildfire protection in partnership with the u.s. forest service, nrcs and other agencies. my comments are endorsed by

state foresters who -- my written statement includes a complete set of priority recommendations from nasf. the development of state wide forest resource estimates and strategies was an important outcome of the 2008 farm bill. these forest action plans provide an analysis of forest conditions in each state and delineate a priority role and urban forest landscape issues and areas. common among the threats, to forest identified in the forest action plan included, forest pests, invasive species, fuel loads and wildfire, loss of forests to development, threats to urban and community forests, the forest action plans also provide long-term strategies for applies state, local and federal

resource where is they can most effectively heavy ran -- state foresters recommend that the 2012 farm bill provide the necessary financial and analytical support to impleme implement -- improving forest market opportunities. included in the strong provisions forest and the conservation programs, nasf

supports potential consolidation of conservation title programs providing that forest landowners eligibility is maintained in a streamlined program. we recommend the 10% cap on the number of forest acres enrolled in csp be removed to allow forest landowners the same access to the program enjoyed by farmers and ranchers. strengthening forest outreach, education, inventory programs, the forced inventory analysis program managed by the usda forest service is the nation's only comprehensive service for main feigning the health and sustainability of the nation's forests across all ownerships.

engaging state forests and other users to re-evaluate the data variables and fostering greater operations between state foresters and the research station reeders. -- leaders. combatting forest related invasive species, the early plant pest detection and surveillance improvement program of the usda animal and plant health inspection service is vital to rapid detection and response to destructive invasive species. nasf supports continued authorization and funding.

improving forest market communities. reauthorization of steward ship contracting authorities is essential to helping -- and provides sustainability and employment opportunities in rural communities. nasf supports the reauthorization of steward ship contract authorities which is currently set to expire in 2013. these recommendations represent conclusions and consensus viewpoints driven by forest action plans authorized in part by the larsz farm bill thank you for this opportunity and i stand ready to answer any questions you may have. >> thank you, mr. dye. and mr. holmes, now recognized for five minutes. >> thank you chairman thompson, members of the subcommittee. on behalf of the national association of conservation districts, our 3,000-member districts and our 7,