 Good morning folks. We're going to start our next panel. I hope that you've been enjoying the expo so far and we will be looking at the whole role of bioenergy with regard to this panel. We have a number of speakers and Our first our first presenter is a Joanne Ivana, who is the executive director of advanced biofuels Welcome Joanne. Okay Sorry, sorry That will work. Okay. Make sure the microphone comes out of here. Okay. Well, as I was saying, thank you very much for having us here Advanced biofuels USA is a non-profit educational organization. We are not a trade group So we feel we have an opportunity to really look at the big picture in Relationship to our renewable fuels issues What I want to talk about is watch what they do As Attorney General John Mitchell said in 1969 at the beginning of the Nixon administration Watch what we do not what we say So I'd like to apply that to that formula to the looking at the Obama administration to clearly understand What is the Obama administration's record on reducing climate change? If you listen to President Obama's speeches, he says he's a climate change leader However, over the past six years the actions of the Obama presidency tell a different story, don't they? Shale oil and gas fracking have boomed Obama's opened up the arctic and Atlantic for drilling He has imposed no new restrictions on deep water drilling So in the transportation sector What does Obama reducing climate change look like? Obama promised a million clean electric cars on the roads by 2015. What did we get? only 160,000 about 16% and Few if any of those are running on renewables So is Obama really serious about providing a clear pathway to have vehicles that run on liquid fuels meet that 54.5 mile per gallon new cafe standard To the contrary It appears that he and as an administration are doing all they can to prevent more efficient Lower life cycle carbon footprint cars and trucks from traveling on our roads and here's how Three recent negative actions by the administration that hinder getting higher mileage lower GHG cars and trucks in the marketplace First EPA tier 3 regulations which put at a disadvantage engines optimized for reasonably priced higher octane high ethanol fuels Engines like the eco boost and ecotech by Ford and GM that due to high octane and cooling properties of ethanol Can get better mileage and lower life cycle carbon? emissions But These tier 3 regulations put those cars at a disadvantage to gas guzzling petroleum optimized engines Remember we went from leaded to unleaded so that we could use catalytic converters in our Automobile so that we could clean the air The EPA could do the same kind of thing moving us to renewables if it really wanted to instead What these actions add up to as a concerted effort by the Obama administration? To restrict American motor vehicle and renewable fuel innovation the results More money out of your pocket when filling up your tank that more often than is necessary with modern technology and dirtier air and higher carbon footprint and Preventing the growth of us jobs in the automotive industry in the research sector and in our domestic sustainable renewable fuel industry So if this administration is truly serious about producing cars and trucks that go furthest using the least amount of life cycle carbon They should start with these four actions. I'm not going to just say what the problem is I want to give you some idea of what solutions are In EPA cafe and related clean air act regulations aimed at that fifty four point five mile per gallon goal Set the R factor at one the EPA folks know what I mean What that does is it effectively acknowledges the improved life cycle carbon footprint of renewables over petroleum based fuels and Immediately restore the flex fuel vehicle production incentives Second Enforced the renewable fuel standard according to the laws that were passed in 2005 and 2007 to incentivize a transition to renewable transportation fuel use The Obama administration's use of current market conditions is not in the RFS legislation That is Obama administration is using market access and market conditions that are presided over by the oil industry as an excuse to ignore incentives that were created to wean off us off our Addiction to oil as president George W. Bush said and Someone who knows about addiction and who knows about oil Third is a practical suggestion to address the imbalance in the oil industry dominated markets Expand and simplify the USDA's current programs to assure that at least one blender pump with a range of ethanol fuels per station around the country Gives customers a real choice of renewable fuels Don't force them to buy 90 percent petroleum fuel and Fourth something applied to both transportation and heat power Include the price of greenhouse gas effects in the price of fuels with the amount of the fee reflecting those greenhouse gas effects and mitigation costs that is Charge a reasonable carbon user fee for non-renewable carbon for example a 4% increase of current gasoline and natural gas prices Which is less than the monthly changes we see now in our gasoline prices and It could produce at least $14 billion a year I have a handout that some of our assistants will have here as you're going out the door You can stop at our booth and give you more details and more numbers on this And then we'd suggest that the money collected go to renewable fuel research and infrastructure development With the fee acting as an incentive to replace non renewables It will self-destruct as more renewables are used And in the meantime you can demand a choice and then we'll pay less in fees the more renewables you use In the coming 2016 presidential and congressional elections we need to make the benefits of renewable energy and climate change reduction an issue at every opportunity What we we need to watch what they do not what they say See what this administration has done to hinder progress towards sustainable renewable fuels and work for changes and Looking ahead keep those candidates feet to the fire Okay, thank you Joanne Well now here from Morgan Pitts who is the manager for communications and external affairs with in Viva Thank you very much Carol and thanks to ESI for hosting us today It's a pleasure to be here and discuss in Viva in our business with everyone For those who aren't familiar with us in Viva's the largest manufacturer of wood pellet fuels for electrical utilities in the world And today I'm going to give you a little background on the company and industry because it's still a relatively new topic for a lot of folks Talk a little bit about the demand drivers basically why we're here now when we weren't here really five years ago And then talk about what we kind of see going forward and some key pieces of policy that are currently being developed So as I mentioned were the largest manufacturer of wood pellets for energy generation The wood pellet industry is not inherently new Wood pellets have been manufactured really since the 70s originally they were largely used as a heating fuel and went to Particularly the northeast the upper Rocky Mountain states areas that were off of the natural gas grid Because they provide a much more price stable heating resource What is started to change over the last five to ten years is the interest from industrial utilities in using them to Co-fire with coal or replace coal entirely And a lot of that interest is being Driven by interest in renewable energy and global renewable energy policies as I'm sure everyone in here is has heard of the Kyoto protocol which Much of the rest of the world certainly Europe signed on to and we opted out of but The Kyoto protocol at the highest level is what is driving the demand in for wood pellets these days The European Union developed the renewable energy directive which required member states to develop renewable energy strategies and Particularly northern Europe areas where there was a lot of existing coal fired generation There was a lot of interest in something like wood pellets that enables the maintenance of that Significant infrastructure as well as the maintenance of that stable power supply but excuse me, but Rapidly improves the emissions profile When you replace coal with wood biomass multiple sources have shown you reduce carbon emissions on a life cycle basis, so that is Come accounting for the carbon that it takes everywhere from sourcing the raw material through processing and transportation That's a common misperception is that that's not accounted for but it absolutely is You reduce carbon emissions by about 80% with when sourced from the South US and burned in Europe for fuel Which so it goes to show that you would actually reduce emissions by far more than that If you used it closer to home because you wouldn't have the ocean voyage for them in the middle But in addition to reducing carbon emissions pretty significantly It also dramatically replacing coal with biomass reduces or eliminates emissions of mercury arsenic lead sulfur pollutants that have caused a lot of problems with human health and also environmental health So in other words what biomass does the reason these utilities are so interested and that policymakers in Europe have been interested in supporting This is a strategy is that you retain your existing assets while improving the environmental profile now there And just to talk a little bit about the European market for a second Right now we're projecting and this is not we this is actually Hawkins, right? Which is a consulting firm that the demand in Europe alone is going to continue to grow over the next several years Perhaps reaching as much as 38 million tons per year It by 2020 One of the common questions that we get is well, that sounds like a lot of wood pellets. Where's it all coming from? You know, are you going out clear-cutting? Deforesting driving deforestation the answer to that is absolutely not The wood pellet industry uses low-grade residuals of harvests for higher-grade materials So in other words if you're a landowner in the Southeast US where 91st 4% of forest land is privately held and kept as an investment You're growing timber on that land to make telephone poles You're growing it to make saw timber things for building houses for making furniture That's where the majority of the money is that's where that's what good timber goes to but on attractive land Not all timber can be turned into lumber because it's rotten defective It doesn't fit the local market requirements So that's a huge resource that actually especially with the decline of pulpit paper in the recession was largely going Unutilized and in many cases which is left on the forest floor burned at roadside So we're able to take advantage of this this low-grade material and turn it into this clean fuel And actually just as an anecdote as I said one of the questions that we hear is You know certainly from from folks who are concerned about the growth of the industry is you are you driving deforestation is just an anecdote between 2007 and 2013 in North Carolina where in Viva has the majority or has many at the majority of our operations The actual forest area increased by 28,000 acres So it's it's actually a great story of a forestation not deforestation in the southeast But I mentioned that you know Europe is the area where there is the most demand right now But there's certainly increasing interest elsewhere in the world of South Korea Japan Increasingly interested in using this as a resource Japan, especially as an importer of energy pretty much whatever it uses So you know pellets are a better choice than coal since they recently shuttered nuclear plants this enables the use of low-carbon electricity Instead of having to turn to fossils Here in the US there we are in a state of policy flux and have been for several years on this I'm sure some of you are familiar with the biogenic carbon accounting framework Anyone who's worked in biofuels Currently it's under review by EPA the first framework was issued. I believe in 2011 It's currently to the science advisory board and there are a lot of questions And there's a lot of questions that how do you actually account for carbon with bioenergy? The way it historically has been looked at in the way that I believe is the most accurate is that as long as you are sourcing from areas with Increasing carbon stocks, so you're not deforestation. You're not depleting carbon It should be counted as a carbon neutral fuel then then you account for the life cycle emissions But there there's a lot of discussion about that and I would be happy to take questions about that in the Q&A to go Into a little deeper before I see any eyes glaze over So, you know with that I guess I'll wrap it up. I look forward to having a good discussion Great. Thanks so much Morgan and you will see a great diversity in terms of different kinds of fuels and Biomass and bioenergy uses from our panel participants And so we are now going to turn to Blake Lindsey who is the founder and chief administrative officer for meridian holding screw the ink And this will give you another whole perspective like Thank you Pleased to be here this morning. Thank you for the invitation. Yes meridian holdings group or MHG, please stop by the booth and see us Next door we can talk more about our products and what we do But we are a bio plastic or bio polymer company. We utilize plant Derived fatty acids or plant-based oils to produce our type of bio plastic We spent the last 10 years Now in product development Perfecting this technology We think about plastics and all alternatives to uses of petroleum I don't think many of us realize how much we consume each year in Plastics, there's over 600 billion pounds of plastics produced every year a Recent study by the University of Georgia and two other universities. It was published in the science magazine talks about eight million metric tons Ending up in the ending up in the ocean every year eight million tons of plastic And that's all they can measure because it floats They don't know what's not floating. They predict it could be over 200 Million metric tons of plastic in the ocean today Again eight million metric tons go in every year That rate is only going to increase that they predict over the next 20 years It's not primarily because of countries like the US where we have More infrastructure it's for those developing markets and countries around the world With coastlines that don't have the infrastructure that we have here in the US But we are a US company today, but we certainly intend to grow and will be in other markets around the world. I Like to do show and tell so I brought my trash today My daughter and I stopped at Chick-fil-A yesterday for breakfast This is just an illustration of how much plastic we come in contact with every day So I'm just going to go through that and show you I had oatmeal and a fruit cup. She had Chicken biscuit or something And a coke came in a polystyrene foam cup She had a straw that was plastic My bowl for my oatmeal plastic bowl for the fruit was plastic Here's a little plastic window in the bag that had my Sugar and fruit nuts in there Spoon wrapped in plastic and a plastic spoon Plastic fork that I didn't use and plastic bag Plastic coated box that had her chicken nuggets in there Plastic coated box that had her hash browns in there The lid for the fruit the lid for the oatmeal The little plastic that had the cranberries in there with plastic bag My coffee with a plastic cup lid I give them credit Chick-fil-A is going green they use a paper cup that's coated with our biopolymer so good for them Plastic this had the sugar in it. I think the brown sugar I'm not done yet. I don't think Yeah No, this actually had the sugar in it. It was a plastic coated little bag and of course The plastic bag that that the food came in so What what do we normally do with this? You know you and I after we're done because It's all contaminated with our food we put it back in the bag oops, that's my water cup and We wrap it in plastic and we throw it away right That'll never go away. I don't never degrade and a hundred percent of is made from petroleum So we believe there's a better alternative. It's good for the environment. It reduces the demand on petroleum The technology like all of these panelists up here today Our reporting is that the technology is now enabling us to compete with petrol-based alternatives The meridian PHA or the MHG product is certified by the FDA as food contact. Okay Because a lot of our clients and customers want to use our products for food packaging just like we saw from our friends at Chick-fil-A and by the way, they're a great company and I Do a lot of business with them because I eat there a lot with my daughter So I'm not picking on them. It's just an example of how we can change the way the world uses plastics We have trademarked the term agro factoring because we are Using plant-derived Renewable feedstocks for our manufacturing process And as I said, we're located in Georgia and right now within a 200 mile radius of our facility. There's 8 million acres dedicated to agriculture and Most of those farmers don't have anything to grow in the winter time In the southeastern United States canola is a winter crop So as they're harvesting their peanuts or their corn or their cotton As soon as they pull that material out of the out of the ground We can plant canola in November and we can harvest it in May and then they have About three to four weeks after that to plant their normal crop rotation So the farming industry is very excited because we're giving them a second income on the same acreage And in our case, we're also planning a non-gmo canola oil one of the visions we have is that We'll have excess Oil production capacity over and above what we need for our fermentation process to make the the PHA We can rent the oil to Our friends at Chick-fil-A because they're already using non-gmo canola oil to cook their fries in today I say rent it because we want them to use it and then when they're done with it We want it back as you use cooking oil to turn it into plastic Which we could then deliver to them those cups and plates and bowls and Articles that I just pulled out of the bag as a fully renewable biodegradable food contact safe plastic and Price competitively and functional for all those applications. So Thank you. Appreciate your attention and look forward to talking with you more So sure And and please note that he does pack out his own trash So that's a real real benefit and and we'll probably never think about all of this the same way again so Thank you so much. And that's a Very good segue to our next speaker and Stecl who is the vice president of federal affairs with the national biodiesel board because actually Biodiesel can be made from some of that same Same waste oil that you're talking about so and Well, thanks very much Carol. Good morning, everyone. It's wonderful to be here always appreciate this event and The ability we have to meet and talk with folks and educate them about the biodiesel industry So I'm with the national biodiesel board and we're the trade association that represents the biodiesel and renewable diesel industries in the United States We have plants in just about every state as Carol said what we do is we take waste feedstocks and make them into fuel And that fuel diversifies the diesel supply system. So We can take recycled cooking oil soybean oil canola oil algae Animal fats tallow a variety of feedstocks that are traditionally Waste feedstocks that either go and clog up our sewer systems or don't traditionally have a home To be used anywhere such as a lot of that recycled cooking oil And actually becomes a value add product that then we make into a fuel that becomes the alternative to diesel so We're about a 1.8 billion gallon industry or so And if you think about it in terms of what the diesel pool is you've got about a 60 billion gallon diesel pool So we're still a very very small part of that although. We're very Very much a growing part of the industry Another part of our industry that is very exciting and a growing aspect for us is called bio heat For those folks that are from the Northeast you're obviously very familiar with home heating oil So what we do is we take biodiesel and mix that into the home heating oil And becomes a replacement for that traditional home heating oil, which is a very dirty and has a lot of high emissions Biodiesel is considered an advanced biofuel So EPA has gone through and done a life cycle analysis Which essentially says that we reduce greenhouse gas emissions by at least 50% And depending on what feedstock are using we can reduce greenhouse gas emissions up to 87% so As we talk a lot about climate change and kind of what the president and the administration has going on We are a way that the president can achieve those goals that they have stated that folks have talked about in terms of Reducing our climate our greenhouse gas emissions in terms of climate change. So we're here today and we're working on that pretty diligently The program that we work very closely with and we're a big part of is the renewable fuel standard and most people think of the renewable fuel standard and they think about ethanol and You'll hear a little bit from Rob about ethanol in a minute, but we're a little bit different. Like I said, we diversify the diesel supply system in the United States Whereas ethanol diversifies the gasoline supply system. So For us the renewable fuel standard has really been a mechanism to grow our industry in a really sustainable gradual way We've been growing our industry about 300 million gallons a year, which is Small but still for us a really good step in the right direction And allowing our plants to really sustain and grow across the country The renewable fuel standard as you guys have heard and probably everybody knows a lot about He's really gotten a lot of heat lately the EPA had released its proposal for the renewable volume allegations for the RFS And for the biodiesel industry We don't have a number set in statute on a yearly basis Two years ago in 2012 we received a billion gallon We gradually escalated up to a billion gallons and then after 2012 We need to go into EPA and show them why we think we should be able to grow because we reduce Greenhouse gas emissions because we have jobs. We're good for the economy. You know, there's a variety of factors We go through so we are working very closely with EPA and talking about a 300 million gallon growth or so As the out years come up and so EPA did put out the proposal It wasn't everything that we had wanted from the biodiesel and renewable diesel industry perspective But for our industry, we do feel like what EPA put out was a step in the right direction in terms of increasing our numbers EPA gradually increased our numbers a hundred million gallons a year Clearly we think we can do more. We know we can do more We have production facilities all across the country in a capacity of almost four billion gallons That's not being utilized So if our highest production was 1.8 billion gallons and we have a four billion gallon capacity We clearly have a lot more room to grow So throughout this comment period that we're entering in and in right now with EPA We're really working with them to talk to them about how we see this program growing and why it makes sense to continue to grow The biodiesel and renewable diesel sector So so we're going to be working really diligent with EPA over the next few months the comment period closes at the end of July And we'll be submitting comments to them on why the volume should continue to grow for all of us in the renewable fuels industry Our friends in the ethanol industry obviously as well as ourselves The other aspect that we work closely with legislators on and on a federal policy perspective Is the biodiesel renewable diesel and renewable jet tax credit? So there is a dollar a gallon blenders tax credit that usually resides within the extenders package That our industry can use to continue to grow in a sustainable way As we all know and clearly if you're here you care about renewable energy We're competing with a very highly entrenched petroleum industry that's been subsidized subsidized for a long time So it's essential is we all sit around the table and brainstorm about how we can all kind of diversify this That we think about federal policy factors that are important in that so clearly for us and for others the renewable fuel standard In the tax credit continues to be very important in that arena So so those are our two federal policy issues that we've been focusing on I'm happy to talk more, but I know we're under a time constraint. So I'll turn it back over to Carol right now. Thanks. Thanks so much and if we have time at the end We'll take some Q&A which would be great so now we're going to hear about that other part on or one of the other parts with regard to the renewable fuel standard and Rob Walther is with us today and Rob is the director of federal affairs with a poet and they have a very interesting story Yeah. Yeah. Thank you, Carol and thank you for having us today Always love EESI panels because the folks that go before and after you learn so much I think my key takeaway today is that the salads my wife has me on is nowhere near as delicious sounding as the Chick-fil-A meals that your family is enjoying so I Will endeavor to make some changes in my life here so back in October I had the opportunity to come and present at an EESI panel about cellulosic ethanol and that was on the heels of us opening up our first commercial sale cellulosic plant 25 million gallons 90 percent clean fuel and if you go and look at the video of My presentation I come across as almost giddy pretty pretty excited Because you know this has been a long time in coming when I was a staffer on the hill I was on the science committee, you know that committee Takes a look at new things things that are coming up that might not ever come to fruition And cellulosic was a technology that we had looked at well here it was I'm now part of a company that is actually bringing it into the commercial space And so it was really exciting unfortunately is and Referenced earlier. We are still having problems with the environmental protection agency and They're proposed volumes under the RFS So I'm not quite as giddy today And I'm not quite as optimistic as I was back in September that you will see Continued rolled out of cellulosic plants, but I want to make two key cases to you today That I hope you'll take away the first is that like our plant other Commercial-scale cellulosic facilities have arrived and 2014 was an inflection point year what the inflection point was has yet to be determined But it was an inflection point here. So I'm going to try and make that case to you and in the second case. I'd like to Present an argument of why the RFS still remains so important Why it is an important part to us being able to scale up advanced biofuels in the future So let's turn to that first point that the inflection the inflection point whether or not 2014 We saw the ethanol industry move from first generation or traditional sources of feedstock, which is corn And was starting to make that transition into advanced feedstocks So taking liberty project liberty, which is our cellulosic plant as an example We use corn stover as the feedstock has a high theoretical maximum amount of gallons that you can produce From it because it has a fair amount of sugar relative to other cellulosic feedstocks But really it comes down to the logistical and infrastructure synergies that exist By bolting on a cellulosic plant to our existing corn ethanol infrastructure Poet has 27 plants spread across seven states for the largest producer of ethanol. We know how to market this stuff We know how to transport this stuff We wanted to put ourselves close to our existing Producers who can haul us cellulose corn stover and also take advantage of the road the rail the power lines The water mains all that infrastructure that already exists at the corn ethanol plant That's money. That's upfront capital We don't need to raise when building out these plants and that's at a time that this plant Which is 25 million gallons same molecule as you get from corn Is that 25 million gallon plant is about 300 million dollars? The same size corn ethanol plant is about 80 million dollars. So almost 4x difference So keep that in mind here. We need to get our capital costs down So anything we can do at the front end to keep those capital costs down on that generation one through really generation six Is is vitally important? The other Synergy that I think people often forget here is that when you bolt on a stover plant you put in that stover Outcomes ethanol, but then you have this leftover lignin. It's basically that's fibrous mass And what we do is we put that through a solid fuel boiler We create process heat and we are able to generate all the heat that that cellulosic plant needs So we don't need any fossil fuels there. Oh By the way, we create so much process heat that we're able to pipe that plus a able to pipe biogas that we create through an anaerobic digester on site over to the corn ethanol plant The corn ethanol plant no longer uses natural gas. It is now fossil fuel free So the corn ethanol plant which was already cleaner than gasoline Actually takes on a ghd profile similar to that of an advanced biofuel So hopefully the synergies are starting to make sense The result is that you have 90 clean fuel coming from the cellulosic facility you have advanced ghd level fuel coming from the corn ethanol facility and This is for those staffers in the room You have a cheaper product than oil Corn ethanol is about 40 dollars a barrel cellulosic ethanol is probably around 80 85 We're going to know more as we continue to market it But that could compete with 80 dollar a barrel oil and we know that we're going to start climbing back once oil prices recover We're competitive again And that's only at the early early commercialization stages. So, you know, we're going to get better at this They're going to be economies of scale that we introduce and we're going to realize where we over engineered this first plant However, um, you know, I still haven't really made the case that there was an inflection point Well, if you look 2014, how many corn ethanol plants were being built? It's a big goose egg There were four cellulosic plants under construction And that's because of the way the renewable fuel standard is created It puts a cap on corn ethanol at 15 billion gallons All the rest of the the headspace under renewable fuel standard can come from advanced or come from cellulosic And then obviously the role that biodiesel can play So take that into account here corn is capped under the renewable fuel standard So why is an investment why why is an investor So interested in the renewable fuel standard if I have such a great product It's so clean if it's so cheap if it's better for public health if it's entirely domestic Why do I need the renewable fuel standard? Well, because our customers are our competitors They're the oil refineries and oil refineries are vertically integrated and they produce oil And so if they buy a gallon of my product That's a gallon of their product that they produce that they can't sell So they are unwilling to take my product That shows that there's a breakdown in the marketplace And that's what the renewable fuel standard I don't I don't care if you are the most liberal liberal or the most conservative conservative whether it be liberal political Wonk server political on liberal economists conservative economists The role of government is to is to ensure that markets work freely No matter who you are and that's what the renewable fuel standard does is it's trying to break the monopoly of oil Okay, so hopefully you come away with that. So just a quick lesson in terms of investment In order for me to get investment into one of these cellulose plants I need to prove To the investor that there'll be a return on investment that they're going to give me some money And they're going to get that money back plus a little And in order to do that I need to show that there's revenue certainty In other words, there'll be revenue against which I can service my debt or whatever the credit is In order to show that revenue certainty, I need to show that there's a market for this product So one's going to buy it and there's going to be revenue flowing in In order to show a market I need often an offtake agreement or a letter in 10 And because our competitors Are the ones that would buy our product. They're not willing to give us those letters in the tent because they're not going to buy our product So that's where the rfs comes in it's supplementing For a breakdown in the market where I can't get a letter of intent if you're a wind turbine you go to your local utility I say you say I have electrons to sell you The utility says how much You say here's how much and they say yes or no And if your electrons are cheaper, whether it be cheaper because standalone or because you have incentives from the government They'll buy it if I had incentives from the government the oil companies still don't buy my product So hopefully that makes sense so The takeaway here and the leave behind for you is without a functioning rfs Cellulosic will not roll out in this country We will have built our last plant in this country And so the next time poet is issuing a press release The question is will it be in english or will it be in portuguese? Do I have to go get rosetta stone portuguese and start getting ready for Being the head of federal affairs in brazil or am I going to stay here at home? And that's really the point and so that's why I go back to was 2014 an inflection point That was a positive or was it negative? So thank you for your time Great. Thank you. Thank you rob And I might just mention at the briefing that rob referenced last fall There we had several cellulosic companies that were there And basically they were all saying the same thing that they were now in the market with with product had gone commercial but that Without certainty and policy and of course we hear this across the board with regard to all renewables With regard to everything both without certainty and policy that the market was going to go overseas because that is where The market conditions were much more favorable so There are a lot of interesting things going on at usda in terms of looking at all sorts of biobased products and businesses That usda's programs are are fostering and to talk to us a little bit about that is Mark Ratzitsky who is the director of the energy division for the rural business cooperative service at usda's office of rural development Thank you. Good morning everybody. I'll just for you have a little background and clarification The within usda is as many of you know, we're a huge department With with various agencies. I represent the rural business cooperative service Which is part of our rural development mission area And really within rural business cooperative service our role is to provide financing programs So mainly a guaranteed loans some grants For business and economic development this morning. I'll focus on our energy programs Which is the division that I administer And in a nutshell kind of the elevator speech The programs I administer really are loans and grants that support the rest of what the panel just talked about The production of a wide variety of advanced biofuels of biobased products including Bioplastics Soon and in many other products So I'm going to focus on a couple of our programs Just give you some highlights as to the program itself some status And then some insights as to some other activities where you can learn more about the programs So the three programs I'll address are the rural energy for america program The advanced biofuels payment program and for short our biofinery assistance program And I'll explain that comment for short when you get to the end of this The rural energy for america program was initially authorized in the 2002 farm bill Actually, all these programs are farm bill supported both from an authorization sense But also from a funding sense for the most part The rural energy for america program supports of small businesses and ag producers That are interested in either implementing a renewable energy system or undertaking energy efficiency projects On the energy efficiency side, it could be things like equipment You know on farm we do a lot of funding and financing of grain dryers But it could be heating lighting and other Improvements that reduce consumption of energy Small businesses are also eligible such as grocery stores car washes Manufacturing facilities all again for the reduction of energy consumption on the renewable energy side The program provides funding for implementing a renewable energy system such as wind solar systems We use the term biomass to be a wide variety. It could be things like a biodiesel Ethnol facilities wood pellet facilities So a wide variety of biomass facilities the program provides grants or guaranteed loans grants up to $500,000 for energy systems 250,000 for energy Efficiency improvements and loans up to 25 million dollars This year we had quite a bit of funding available about a hundred million dollars total Mainly because the program was delayed in getting out in 2014 the last farm bill Took us a little while to update the rules. So we basically had two years of funding available The funding supports especially three initiatives within the program One is an energy efficiency and basically a technical assistance program So we provide grants to universities Electric co-ops could be units of state or local government Resource and conservation districts for example To assist small businesses and bank producers Just doing studies energy audits for energy efficiency programs or for technical assistance in implementing Their renewable energy systems that program provided two million dollars of funding this year In 25 projects in 24 states. So a very diverse program In the actual Loan and Grant program for systems We're in the middle of the year. So I can't give you a lot of detail as far as is where we're going to end up But we split 10 of the funds And reserve it for small projects so projects that are requesting grants of 20,000 or less And we just finished rolling out that program and funding those projects. So we just It was just over 10 million dollars available And in that program we made 800 awards Of which were about half and half a little bit under It was about 325 for energy efficiency projects and little almost 500 awards for renewable energy systems This year We're just starting to roll out the larger projects So we have yet 60 million dollars available But we also have about 1500 applications on hand throughout the country. So as you can see, it's a very active program In going forward The second program very simply is an advanced biofuels payment program on an annual basis. We have 15 million dollars This is again supported by the farm bill and the program basically makes payments to producers of advanced biofuels So on a quarterly basis of the producers that apply for the program Report to us what their production was and we simply prorate the payments based on their production on a btu basis So we kind of equate all the fuels and production to btu's And they make payments to support the production of the the various industries That the payments as you might expect are getting smaller because the industry is growing Which is really nature and the purpose of that program The last I'll talk about is really our Say newest in the sense of rolling out changes to the program Is the bio refinery Renewable chemical and biobased product manufacturing assistance program It used to be called the biofinery assistance program now a much longer term The 2014 farm bill added the renewable chemical and biobased product manufacturing components to the program So just on the 24th of june, we released the new rules for the program Earlier this week we published the invitation for applications And on the 16th we're going to hold a rollout forum. So those of you that are Washington based or those that were interested in additional information in the program Let me know I can provide you some insights. We have This is a forum that we're going to host at usda on the 16th and have a web link Also for connection for more information on that program Again, that program provides guaranteed loans up to 250 million dollars to assist for the development of biofuels renewable chemicals and biobased product manufacturing If you're familiar with the program in the past, uh, it's supported Bio or supported advanced biofuels. So a bio refinery The major component of the biofinery had to be the fuels The new program rolling out still requires production of advanced biofuels by a bio refinery But it could be a minor part. It could be biofuel that they're further processing Into other polymers other renewable chemicals. So while we're still focusing In providing support for advanced biofuels. It's also getting much more diverse into renewable chemicals and other products There's also components of the program that will assist in financing facilities They're going to take an output of a bio refinery. So it could be a fuel could be renewable chemical or it could be a byproduct And manufacture that into an end user product And there we're focusing on new and innovative new processes innovative processes and innovative products That program will have from applications an open application cycle And every six months will review applications and compete applications for projects That program was initially authorized in the 2008 farm bill And we have eight projects right now in a variety of we call them active stages the majority of them are actively planning Still going through their their planning designing getting preparing to construct projects But most of those again are producing advanced biofuels Many are focusing on woody biomass for the reasons we heard here But for the production of cellulosic ethanol Some produce Drop-in heating oil and we have one client that is Their project is to take a municipal solid waste. So basically trash And convert it into jet fuel. So it's a pretty very exciting industry to be in If you want more information the program has some handouts We have a booth back in the expo feel free to stop and talk to us And we also hope that you join us on the 16th for some more information. Thank you Great, thank you so much mark And I I know in terms of just the reading that I've done with regard to some of these Trash to other fuels like the aviation fuel It's very very fascinating And and I must say it is always certainly too that biomass is the one renewable resource That can be a problem if it is not utilized And so we it's it's one of those things that offers up a whole lot of exciting Opportunities very different things In in terms of thinking about all of the different kinds of sustainable uses that that can be made And and I guess one one other point that I've always found Very very interesting is that in terms of thinking about bio refineries the whole host of products that can Come from those bio refineries. It's not just one thing at all just like In oil refinery there are often many many things that will come off that out of bio refinery You can have numerous products that that Emerge there as well. So we have a few minutes left for your questions or comments Let's go over here first The residue was chipped and sent or pelletized and sent to europe So Two points there the first one is that in viva does not actually own any forest land So we source from private landowners who grow timber to As a commodity essentially to sell to multiple markets And then as far as what we actually use for pellets we use pulp wood, which does include roundwood In areas where there's no other market for it. We use tops and limbs of trees We use chips that are made in woods from low-grade materials that couldn't be strapped to a truck Essentially to clear the site for replanting and then we also use sawdust from sawmills as a residual So those are the feedstocks that we do use but we do not take any timber that could be used to turn into any kind of solid wood product Okay, this question here first Yeah This question is also for in viva I'm wondering What you would what you do if epa counted emissions from bioenergy under the clean power plan Our our concern is that epa under draft rakes is not counting emissions from bioenergy under the clean power plan And the data show that bioenergy emits at the stack A lot more carbon dioxide than coal and it can take years or even decades The new growth to sequester those emissions. So how would you respond if epa did count those emissions? Well, I mean first of all right now that's a topic of carbon accounting has is is Fairly well discussed as far as them counting the emissions. I talking about at the stack There are usually there is some incremental increase. Yes, it interiorly stack emissions But as I mentioned when I was speaking earlier it depends on earlier depends on how the carbon is accounted for The kinds of studies that show that there's an increase in emissions Typically rely on hypothetical future states To make a series of assumptions about what emissions could or could not be But when you actually take into account economic factors sourcing practices on the ground Recent study by duke university and nc state actually finds Tremendous benefits from a carbon perspective. So I can't speak to what epa will do I don't have a glass ball, but I am very confident that what we do is a provides good outcomes Okay Um Any other questions we have a couple okay here first and Also from morgan. Um, I'm mary boo the director of the partnership for policy integrity So your estimate just I think it would be good if you maybe clarify to the audience that your estimate of an 80 Reduction in carbon emissions at the stack From burning wood actually depends on counting all the emissions from actually combusting the wood as zero And so as my colleague said epa is reviewing this practice how accounting is done now And um, I'm just wondering what you think, uh, what you think your emissions profile would look like Do you agree with for instance the study that the southern environmental law center just came out with that When you do count those emissions, uh, the emissions are 2.5 times greater than the coal that's actually The wood is actually replacing and um, this was published of course in the washington post Which is I think probably above the fold. I think probably a lot of people here saw that So maybe you can expand and elaborate a little bit more on exactly how and viva Can justify just counting emissions as zero Dr. Booth first of all, it's a pleasure to finally meet you. I've read a lot of your work over the last few years So hopefully we can catch up a bit after the session. I would be pleased to chat with you more but to address your question directly Based on the 80 number comes from the uk government's Off-gem the office of gas and electricity markets calculator That is the office that regulates the carbon emissions for renewable energy based on that calculator. It is an 80 reduction Does that does that address your question? Well, I'm explaining exactly where it exactly where the number comes from so Okay, great. Thanks. Uh, anything any other questions or comments for any of our other panelists Okay, back here first Howard marks with the red horse consultant to the bioenergy technologies office at DOE My question is directed to mark. Thank you for your presentation before bioenergy 2015 conference blender pumps I think we talked about in a whole idea of the blend wall and expanding the market to e-15 market and the announcement made by the secretary Could you give us further details about what the roll-out is going to look like for that program because it has such great promise. Thank you Yeah, I have There's some limited ability in that it's a actually different tone agency within usc That's administering that we have a couple of our staff. They're providing some technical support but it's it's a A grant program that is going to be awarded to a state level So it's going to take a participation from state agencies To roll out the program at the state level. So it's a grant application Are being received at this time at the national level from us, you know from state organizations And then at the state level they will support the distribution of funds to help support Finding and financing of blender pumps throughout each state or through the state that's applying The it will require though some some match funding and some other participations from at the local level Live on state level Um, I want to thank our panelists for being here and talking about all of these different bioenergy uh opportunities and uh technologies and of course everybody's got booths And so please do stop by engage ask questions get answers Further the discussion. That's what this is all about Uh, and I want to thank all of you very very much for being here Make sure to visit everything. Um, and we look forward to Seeing some of you at least for the next panel. Thank you all very very much