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USDA Update: A Systems Approach…
OPPORTUNITIES FOR
RENEWABLE ENERGY AND BIOBASED
PRODUCTS
William Goldner, Ph.D.
Chair, Biobased Product and Bioenergy Coordination
Council and National Program Leader, Competitive
Programs, CSREES
and
Harry Baumes, Ph.D.
Associate Director, Office of Energy Policy and New
Uses, Office of the Chief Economist
OVERVIEW
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How We Arrived at Where We Are
2008 Farm Bill
National Bioenergy Coordination
USDA Bioenergy and Biobased
Products Coordination
 USDA/REE Energy Strategic Plan
 Relevant USDA Competitive Programs
 Closing Remarks: Looking Ahead
How We Arrived at Where We Are
 High Oil and Gasoline Prices
 2006, 2007 and 2008 State of the Union
Addresses
 Low corn and commodity prices
 Significant Investment in Biofuels
Industry
 Global Economic Growth
How We Arrived at Where We Are
 Energy Independence and Security Act of 2007
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RFS 2
GHG Reductions
 ISSUES IN 2008
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Energy & Commodity Price Run-up
Food & Fuel
Indirect Land Use
Collapse of the Financial Sector and Commodity
Bubble
 Food, Conservation and Energy Act of 2008
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How We Arrived at Where We Are
WTI and
Conventional
Rising
Energy Gasoline
Prices Prices
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Gasoline
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40
Conventional
WTICorn Starch
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RFS1
Year
How We Arrived at Where We Are
Corn – Ethanol Prices
Ethanol – Corn Price Spread Profitability Indicator
Ethanol and Corn Prices
7/7/2008
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Per Bushel
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U.S. Avg Ethanol $/gal
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Dollars
Corn Chicago $/bu
Ethanol - Corn Price Spread
2008 Farm Bill
The Food, Conservation, and Energy Act of 2008
Energy Title IX
 Biomass Research and Development Initiative (9008)
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Research, development, demonstration grants
(CSREES/DOE)
 Shared risk through demonstration and
commercialization grant and loan guarantee
programs (RD)
 Bioenergy Program for Advanced Biofuels
 Biomass Crop Assistance Program (FSA)
 Forest Biomass for Energy (FS)
 Conservation Reserve Program will include biomass
for energy production (FSA)
 BioPreferred Program becomes the Biobased
Markets Program
2008 Farm Bill
The Food, Conservation, and Energy Act of 2008
Research Title VII
•Research Management and Coordination
•Research, Education, and Extension Funding
Agriculture and Food Research Initiative (AFRI)
•Bioenergy Research (Authorized)
National Biomass R & D
 Biomass Research and Development
(BRDI) Board - National Biomass and
Biofuels Coordination (USDA, DOE
Chairs)
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USDA, DOE, EPA, DOI, DOD, DOT, NSF,
other
National Biofuels Action Plan
Economics of Biomass Feedstocks in the U.S.
Interagency Working Groups
 Resource Needs and Research Recommendations
 Focus and Coordination toward Implementation
Interagency Working Groups
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Sustainable Biofuels Production
Feedstock Production
Feedstock Logistics
Conversion Science and Technology
Distribution Infrastructure
Blending
Environment, Health, and Safety
USDA Energy Leadership
 Energy Council Coordination Committee
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Policy-oriented
 Biobased Product and Bioenergy
Coordination Council (BBCC)
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Authorized to coordinate research, policy, and
implementation strategies
 Goal: Create a systematic approach for
USDA energy priority setting, coordination,
and implementation
Developing a Roadmap for
Research, Education, and Extension
The Secretary must prepare a roadmap for
agricultural research, extension, & education
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Identify major opportunities & knowledge gaps
Stakeholders involved in preparation
Incorporate other roadmaps for ag research
Recommend funding levels
USDA/REE Energy Science
Strategic Plan for Research,
Education, and Extension
ARS, CSREES, ERS, NASS and
Our University Partners
USDA/REE Energy Science and
Education Workshop
THE FIRST STEP
 In September 2007, REE held an
“Energy Science and Education
Workshop.”
 Attendees at this workshop included
leaders in bioenergy and bioproducts
research from the USDA, other federal
agencies and the nation’s leading
Institutions of higher learning.
 The product of this workshop is a
roadmap for REE’s future bioenergy
research, education and extension
programs.
USDA Energy Research, Education,
and Extension Strategy
This Plan presents a
unifying vision and goals for
research, education and extension
energy initiatives
www.reeusda.gov
Purpose of the Plan
 Establish focus and facilitate collaboration
 Create public benefit through both internal
activities and partnerships
 Pursue reliable and sustainable sources of
agriculture and natural resource-based
energy and biobased products
 Promote the health of rural communities
 Provide responsible stewardship of our
natural resources
Unique Resources and Capacities
 Regional and local outreach
 Genetic resources, collections and crop breeding/genetics/genomic
expertise for feedstock development
 Systems approach to feedstock development, production, and
conversion
 Feedstock logistics (harvest, transportation, storage, and pretreatment)
 The use of animal manures, crop & forest residues, and other
residuals as feedstocks
 Development of biobased products and value-added co-products
 A network of dedicated laboratories for performing basic and applied
research
 Integration of basic and applied research, education, and
Cooperative Extension in land-grant universities
 Integration and coordination of activities among the REE agencies
(ARS, CSREES, ERS, NASS)
5-year Leadership Objectives
 USDA Energy Research, Education, and Extension Plan is
recognized for its innovation across REE, USDA, Federal
agencies, Congress and university community.
 The Energy Research, Education, and Extension Plan is incorporated into
U.S. national energy strategy and action plans.
 Successful implementation of all initiatives, with outcomes continuously reevaluated and executed for maximum achievement.
 A strong network of partners with a shared vision is in place.
 Vibrant and effective public and private partnerships focused on specific
issues with defined scopes exist at the national, regional, State, and local
levels.
 Organized educational partnerships, including youth and adult education
as well as college curricula are in place.
 Well-established marketing partnerships with scientific, educational, and
industrial organizations are functioning.
Programmatic Goals
 Sustainable agriculture and natural
resource-based energy production
 Sustainable bioeconomies for rural
communities
 Efficient use of energy and energy
conservation
 Workforce development for the
bioeconomy
Goal 1: Sustainable Agriculture and Natural
Resource-Based Energy Production
Results by 2013:
 Whole life-cycle analyses of at least two potential regionally appropriate
production systems.
 High quality, cost effective feedstocks are developed.
 High quality, cost effective feedstocks are sustainably produced following
REE science-based conservation plans.
 Demonstrate at least two scalable conversion technologies suitable for
regional energy production.
 Sustainable integrated harvesting, transportation, storage, conversion,
and distribution systems exist.
 Analysis of environmental and economic impact of bioenergy production
will have been conducted at the regional and national levels.
 Analytical tools have been developed to assess the site-specific impacts
of bioenergy feedstock production.
 Comprehensive databases of feedstock characteristics are publicly
accessible.
Goal 2: Sustainable Bioeconomies
Results by 2013:
 Decision tools are available and training in their use is
provided to all farmers, rural communities, processors, and
policy makers..
 Cooperative Extension educators are fully trained to support
farmers, processors, and rural communities
 eXtension Communities of Practice are formed to support
farmers, processors, and rural communities
 Biobased products and bioenergy coproducts have been
evaluated for sustainability and market potential for regional
integrated bioeconomies.
 Those farmers, communities, and processors displaced by a
growing bioenergy industry in transitioning to new viable
economic activities are assisted.
Goal 3: Energy Efficiency & Conservation
Results by 2013:
 Energy education programs, including eXtension
Communities of Practice established by
Cooperative Extension personnel to reach
traditional and non-traditional audiences.
 Energy intensity of agricultural production
reduced by 10 percent.
 Establish a national agriculture- and naturalresource-based energy awareness campaign.
 Promote energy conservation awareness across
the United States.
Goal 4: Human Capital Development
Results by 2013:
 Triple the number of students in college- and
university- based bioenergy & bioeconomy
education programs.
 A large proportion of high school students are
aware of and take action on bioenergy
concepts and agriculture and natural resource
roles in developing the country’s energy future.
 Expertise is available to implement
Cooperative Extension energy programs
across all States.
Critical to Implementation
 Creating Partnerships for Plan
Implementation
USDA & Federal Agencies
 University and State Partners
 Associations and Organizations
 Industry

Energy Plan Implementation
 24 Month Goal Action Plan
 Initial Goal Action Plan (Complete)
 Identify Goal Leaders/Teams (Complete)
 Evaluate Goal Implementation Team Plans
(Ongoing)
 Agency Program Alignment (ARS, CSREES,
ERS, NASS)
 USDA Energy Summit: Building and Growing
Partnerships September 29-30, 2008)
Bioenergy, Complex and Interdisciplinary
 Issues and Concerns
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Sustainability
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Climate Change
Environment
Social
Land Use
Consistency of Supply and feedstock quality
 Policy Objectives
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Energy security
Implementation EISA
Implementation FCEA
Complex and Interdisciplinary Work
GHG Benefits and Burdens for Fuel Ethanol Cycle Occur
at Different Stages (and With Different Players)
CO2 via
Photosynthesis
Energy inputs
for farming
Fossil energy
inputs to
ethanol plant
Change in
soil carbon
Ne
via gati
pr ve
ice eff
sig ect
na
l
Carbon in
kernels
Fertilizer
N2O emissions
from soil and
water streams
CO2 in the
atmosphere
In direct land use changes
for other crops and in
other regions
CO2 emissions
during fermentation
CO2 emissions
from ethanol
combustion
Carbon in
ethanol
DGS
ion in nd
duct
e
r
a
i
dema
fect v mal feed
f
e
e
ni
tiv
Posi ntional a
e
conv
Conventional animal
feed production cycle
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USDA Bioenergy and Bioproduct Funding
UNITED STATES DEPARTMENT OF AGRICULTURE
Biobased Products, Bioenergy/Renewable Energy Related Programs
(Dollars in Thousands)
FY 2001
Actual
FY 2002
Actual
FY 2003
Actual
FY 2004
Actual
FY 2005
Actual
FY 2006
Actual
FY 2007
Actual
FY 2008
Estimate
Biobased Products, Bioenergy/Renewable Energy Related Programs
Commercialization…………………………..…………………………………………………………………………………..……………………………………………………………………
$43,385
$83,243
$170,750
$175,171
$118,209
$116,877
$50,999
$76,109
Research and Development ……………………………..……………………………………………………………………………………………………………………………………………
73,535
88,852
111,040
116,961
113,395
112,841
113,941
116,600
Education and Outreach………………………………………………..………………………………………………………………………………………………………………………………
0
0
1,000
1,000
1,000
1,909
1,753
1,924
Energy Efficiency and Conservation……………………………...……………………………………………………………………………………………………………………………………
7,059
7,539
723
0
0
3,152
689
689
Total, Discretionary (Budget Authority)…………………………………………….……………….
123,979
179,634
283,513
293,132
232,604
234,779
167,382
195,322
Total, Discretionary + Loans/Guarantees…………………………………………….……………….
(153,637)
(176,814)
(261,673)
(293,132)
(242,125)
(274,216)
(289,373)
(458,387)
Source: USDA, Office of Budget and Program Analysis
Transition…
CSREES
National Institute of
Food and Agriculture
CSREES Organizational Changes
National Institute of Food and Agriculture
(NIFA) established by October 1, 2009
 Agency head appointed to a 6-year term
by the President
 Reports directly to the Secretary or
designee
 CSREES Authorities will be Incorporated
into The National Institute
Other Provisions
NRI & IFAFS combined into Agriculture and
Food Research Initiative (AFRI) to become the
core competitive grant program for research,
education and extension
 Effective in FY 2009
 Research funding split 60% to fundamental
and 40% to applied.
 Authorizes up to $700,000,000 annual funding
 Not less than 30% for integrated projects
 406 authority maintained and referenced
CSREES/National Institute Programs
 Biomass Research and Development Initiative –
competitive (RFA just released)
 Agricultural Materials Program - non-competitive
 Formula funding
 Special Research Grants
 Small Business Innovation Research Program –
competitive
 Agriculture and Food Research Initiative – competitive
 Higher Education Grants - competitive
 Challenge Grants
 National Needs Fellowships
 Sustainable Agricultural Research Education (SARE)
Program
www.csrees.usda.gov
Biomass Research and Development
Initiative (9008)
 USDA ($20 M) and DOE ($1-5 M) Joint
Solicitation FY 2009
 USDA funding will grow to $40 M in 2012
 Focus on Research, development, and
demonstration
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Sustainability
Feedstock Development and Production
Feedstock Conversion
Analysis
http://www.csrees.usda.gov
Agricultural and Food Research Initiative
Biobased Products Bioenergy Program
 $5.4M in 2008
 2009 Information Posting November, 2008
 RFA anticipated release early February, 2009
 http://www.csrees.usda.gov
NRI/AFRI Success Story
 Ramon Gonzalez at Rice University
developed a new fermentation process
that uses E. coli to convert glycerol into
high-value chemicals, like succinate.
Agricultural and Food Research Initiative
 Joint Solicitation with DOE Office of Science - $10.8 M
 Plant Feedstock Genomics for Bioenergy
 Regulation of genes, proteins and metabolites
 Genetic markers for more efficient plant breeding.
 Understanding of the structure, function, and organization
of plant genomes
 2007 - Perennial grasses, sorghum, poplar, alfalfa
 2008 – Foxtail millet, willow, switchgrass, pine, rice,
sunflower

http://genomicsgtl.energy.gov
Small Business Innovation Research
Topic Areas That Support Bioenergy and Biobased
Products (and Industrial Crop) Research
 Forests & Related
Resources
 Small & Mid-Sized
Farms
 Plant Production
and Protection Biology
 Biofuels and
Biobased Products
 Plant Production &
ProtectionEngineering
Small Business Innovation Research
Biofuels and Biobased Products (8.8) 2009 Emphasis
 Production of next generation biofuels and related coproducts (no support for corn grain ethanol)
 New crops for the production of non-food biobased
products
 New non-food biobased products from new industrial
crops
 New biobased plastics
www.csrees.usda.gov/fo/sbir
SBIR Success Story
•Resodyn Corp developed technology to convert waste
grease and tallow from meat rendering plants into
biodiesel.
•The successful technology was licensed for $29 MM and
three biodiesel plants have been built in the Midwest.
Small Business Innovation
Research (SBIR) Program
In the past five years:
 $3.5 million in support for small businesses
and their university and ARS partners to
conduct industrial crop development and
product research
 Tobacco, kenaf, sorghum, camelina, algae,
sweet potato, guayule, switchgrass, jojoba,
and jatropha
SBIR Success Story
 Native Seedsters Inc. developed a
switchgrass seed harvester and has sold its
first units to Noble Foundation and Ceres.
Closing Remarks
 Focus on sustainable bioenergy highlights the
value of agricultural research, education, and
outreach
 Strategic roadmaps such as the Energy
Science Strategic Plan may create
opportunities for stronger partnerships and
new collaborations
 The new USDA administration will have a
strong base for continued bioenergy and
biobased product activities.
Closing Remarks
 Economy must improve – Stimulus package help
directly for in bioenergy industry and credit market
 New Administration’s team is being put in place –
Appears clear that there is support for bio or
renewable energy – commitment to alternative
energy
 Recognition that bioenergy is not independent of
climate change, environment, and sustainability
 Alternatives to fossil based energy is a global
concern
Closing Remarks
 Recognize the complexity of developing, deploying,
and using alternative bioenergy - Systems approach
to solutions
 Interdisciplinary cooperation and collaboration –
research teams
 Commitment to Research and Development
 Commitment to Extension, Education, and Tech
Transfer
 Continue to be a role for public policy