AUGUSTA, Maine — Maine has received more cash from the federal government for the development of biofuels than any other state.
The Biomass Crop Assistance Program, which was started in 2009 to encourage development of renewable fuels, has provided more than $34.8 million in payments through 386 contracts with Maine growers and companies during the past two federal budget years.
“Domestic production of renewable energy, including biofuels, is a national imperative and that’s why USDA is working to assist in developing a biofuels industry in every corner of the nation,” U.S. Agriculture Secretary Tom Vilsack said in a statement. “By producing more biofuels in America, we will create jobs, combat global warming, replace our dependence on foreign oil and build a stronger foundation for the 21st century economy.”
He said what had been a two-year pilot program will continue with the adoption of final rules in October. It was authorized in the Food, Conservation and Energy Act of 2008 and the pilot was funded through Recovery Act funds with $243.8 million distributed nationwide,
“They clearly have been a very significant benefit,” said Alec Giffen, director of the Maine Forest Service. “They have gotten some landowners to take some operations that were needed. They boosted the bottom line for landowners; they boosted the bottom line for loggers.”
He said the state did so well in getting the subsidies because Maine continues to have a strong forest products industry while some other states no longer have any industry.
“In Maine, we have been very, very successful in keeping our forest products industry, and that stands in stark contrast to other parts of the country,” Giffen said.
The BCAP program provides assistance for the establishment and production of eligible renewable biomass crops. Producers who enter into BCAP contracts may receive payments of up to 75 percent of the cost of establishing eligible crops. They also can receive payments for up to five years for annual or nonwoody perennial crops and up to 15 years for woody perennial crops.
The BCAP program also assists agricultural and forest landowners and operators by providing matching payments for the transportation of certain eligible materials that are sold to qualified biomass conversion facilities. Maine has 26 such facilities, which convert the materials into heat, power, biobased products or advanced biofuels.
John Williams, president of the Maine Pulp and Paper Association, said that while his members do not benefit directly from them, the subsidies have helped stabilize wood suppliers during the recession and that has helped his members.
“Without wood, they can’t run, and if wood gets to be terribly expensive then they are at a real competitive disadvantage, so it is important that we keep a good supply of wood coming into our mills,” he said. “This program has helped do that.”
Williams said many mills are using the wood-to-fuel boilers that not only provide energy for the papermaking process, but also generate electricity. He said the electricity generated is often in excess of what is needed by the facility and the excess power is sold on the electric grid.
“That is a trend I think you will see growing,” he said.
Last winter, Gov. John Baldacci urged Maine loggers and woodland owners to apply for the program after he attended meetings in Washington with federal officials on the Recovery Act.
“We have 19 million acres of forestland,” he said after the meeting. “We have the second-highest number of biomass facilities in the country after California. This can be a very significant program for Maine.”
The program also drew support from the state’s congressional delegation with Sen. Olympia Snowe, R-Maine, introducing legislation to establish a tax break similar to the subsidy program.
“Providing equity for biomass incentives for our pulp and paper industry will spur job growth, reduce the consumption of fossil energy, and reduce carbon emissions,” she said. “It is exactly the tax policy that will keep our industry competitive and begin to curtail carbon emissions.”
Giffen said he believes the BCAP program can be improved by providing for “smarter” rules governing forest management. He said crucial to using biomass as a fuel or to generate electricity is making sure the supply of wood is available.
Stand-alone biomass plants are not very efficient, he said. Paper plants in Maine that use biomass to fuel boilers that provide the energy to make paper as well as produce electricity have the highest efficiency.