House panel cuts rural energy, biofuels

A House subcommittee voted this week to cut two rural energy grants and a biofuels loan guarantee program out of the 2012 budget, a move advocates say would weaken South Dakota’s rural communities at a time of high energy costs.

Republicans on the agriculture appropriations subcommittee approved a bill that would end payments for the Rural Energy Assistance Program (REAP), the Biorefineries Assistance Program and the Biomass Crop Assistance Program (BCAP), all administered by the U.S. Department of Agriculture.

In a statement on the appropriations committee website, chairman Rep. Hal Rogers, R.-Ky., said the bill cuts outlays for “duplicative programs and (limits) funding for programs that have been less than transparent with taxpayer money.”

REAP pays up to one-quarter of the cost of efficiency audits, upgrades and renewable generation projects for farmers, rural businesses and some electric cooperatives.

In South Dakota, the program paid $1.87 million in grants and $1.63 million in loans, according to USDA Rural Development. All but one payment went to farmers or co-ops to replace grain driers.

Ending REAP would make farmers “completely beholden to rising energy prices,” said Matt McClarty, a policy advocate at the Environmental Law and Policy Center in Sioux Falls. “We’re trapped in this little game that’s being played here, but the fact of the matter is, it really saves South Dakota farmers a lot of money.”

The Biorefineries Assistance Program offers loan guarantees up to $250 million for commercial-scale biorefineries. No South Dakota companies have received a guarantee from this program, said Tammi Schone, Rural Development spokeswoman.

BCAP provides matching payments for crop waste and contracts for nonfood crops used in biofuels. Sioux Falls-based Poet owns the only two BCAP-certified biorefineries in the country, according to USDA’s Farm Services Agency. One plant is in Chancellor, and a commercial-scale cellulosic plant is planned for Emmetsburg, Iowa.

In a statement, Scott Weishaar, vice president of commercial development at Poet, said BCAP enabled farmers to bring in the first commercial biomass harvest at the Emmetsburg plant.

Josh Shields, a spokesman for Rep. Kristi Noem, R-S.D., called the programs “instrumental” in spurring renewable energy projects. He said Noem “will work to ensure any additional cuts in ag programs are not disproportionate with cuts in other areas of the budget.”

Democratic Sen. Tom Harkin of Iowa, meanwhile, circulated a letter asking leaders of the Senate agriculture appropriations subcommittee to protect the programs. Sen. Tim Johnson, D-S.D., signed it; a spokeswoman for Sen. John Thune, R-S.D., said Friday that he was reviewing it.

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