1. 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 USDA Update: A Systems Approach… OPPORTUNITIES FOR RENEWABLE ENERGY AND BIOBASED PRODUCTS

2. OVERVIEW  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

3. 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

4. How We Arrived at Where We Are  Energy Independence and Security Act of 2007  RFS 2  GHG Reductions  ISSUES IN 2008  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

5. RFS1 Conventional Corn Starch Gasoline WTI Rising Energy Prices How We Arrived at Where We Are

6. Corn – Ethanol Prices Ethanol – Corn Price Spread Profitability Indicator How We Arrived at Where We Are

7. 2008 Farm Bill  Biomass Research and Development Initiative (9008)  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 Energy Title IX The Food, Conservation, and Energy Act of 2008

8. 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)

9. National Biomass R & D  Biomass Research and Development (BRDI) Board - National Biomass and Biofuels Coordination (USDA, DOE Chairs)  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

10. Interagency Working Groups  Sustainable Biofuels Production  Feedstock Production  Feedstock Logistics  Conversion Science and Technology  Distribution Infrastructure  Blending  Environment, Health, and Safety

11. USDA Energy Leadership  Energy Council Coordination Committee  Policy-oriented  Biobased Product and Bioenergy Coordination Council (BBCC)  Authorized to coordinate research, policy, and implementation strategies  Goal: Create a systematic approach for USDA energy priority setting, coordination, and implementation

12. Developing a Roadmap for Research, Education, and Extension  The Secretary must prepare a roadmap for agricultural research, extension, & education  Identify major opportunities & knowledge gaps  Stakeholders involved in preparation  Incorporate other roadmaps for ag research  Recommend funding levels

13. USDA/REE Energy Science Strategic Plan for Research, Education, and Extension ARS, CSREES, ERS, NASS and Our University Partners

14. 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/REE Energy Science and Education Workshop

15. 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

16. 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

17. 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 pre- treatment)  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)

18. 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 re- evaluated 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.

19. 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

20. 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.

21. 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.

22. 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 natural- resource-based energy awareness campaign.  Promote energy conservation awareness across the United States.

23. 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.

24. Critical to Implementation  Creating Partnerships for Plan Implementation  USDA & Federal Agencies  University and State Partners  Associations and Organizations  Industry

25. 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)

26. Bioenergy, Complex and Interdisciplinary  Issues and Concerns  Sustainability  Climate Change  Environment  Social  Land Use  Consistency of Supply and feedstock quality  Policy Objectives  Energy security  Implementation EISA  Implementation FCEA

27. Complex and Interdisciplinary Work

28. Source: USDA, Office of Budget and Program Analysis USDA Bioenergy and Bioproduct Funding

29. Transition… CSREES National Institute of Food and Agriculture

30. 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

31. 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

32. 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

33. 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  Sustainability  Feedstock Development and Production  Feedstock Conversion  Analysis http://www.csrees.usda.gov

34. Agricultural and Food Research Initiative  $5.4M in 2008  2009 Information Posting November, 2008  RFA anticipated release early February, 2009  http://www.csrees.usda.gov Biobased Products Bioenergy Program

35. 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.

36.  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 Agricultural and Food Research Initiative

37. Small Business Innovation Research  Forests & Related Resources  Small & Mid-Sized Farms  Plant Production and Protection - Biology  Biofuels and Biobased Products  Plant Production & Protection- Engineering Topic Areas That Support Bioenergy and Biobased Products (and Industrial Crop) Research

38. Small Business Innovation Research  Production of next generation biofuels and related co- products (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 Biofuels and Biobased Products (8.8) 2009 Emphasis

39. 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.

40. 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

41. SBIR Success Story  Native Seedsters Inc. developed a switchgrass seed harvester and has sold its first units to Noble Foundation and Ceres.

42. 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.

43. 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

44. 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