1. Office of the Chief Economist Office of Energy Policy and New Uses Harry S. Baumes, Ph. D. Director Office of Energy Policy and New Uses Advanced Biofuels Leadership Conference National Harbor, Maryland April 22, 2014 USDA – The Road Ahead

2. Office of the Chief Economist Office of Energy Policy and New Uses Feedstock Production Feedstock Logistics Conversion Conversion Process Scale- up/Integration Product Testing/Approval Performance Environment Assmt End User Markets Enable Production Feedstock Development USDA Supply Chain Approach Feedstock Development & ProductionFeedstock pathways – Integration - Scale Up Commercial Production Efficiency Improvements Biofuels Heat and Power Biobased Products Research and Education OutreachPrograms: Technical and Financial Assistance www.usda.gov/energy

3. Office of the Chief Economist Office of Energy Policy and New Uses USDA Efforts Policy Research Programs –Commercialization Partnerships

4. Office of the Chief Economist Office of Energy Policy and New Uses Policy Agricultural Act of 2014 –Enacted February 2014 –T itle IX Energy –Replaces Food, Conservation and Energy Act of 2008 Energy Independence and Security Act of 2007 (EISA) –RFS

5. Office of the Chief Economist Office of Energy Policy and New Uses Agricultural Act of 2014 - Title IX – Energy Biobased Markets Program(9002) Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Program(9003) Repowering Assistance Program (9004) Bioenergy Program for Advanced Biofuels (9005) Biodiesel Fuel Education program (9006) Rural Energy for America Program (REAP - 9007) Biomass Research and Development (9008) Feedstock Flexibility Program (9009) Biomass Crop Assistance Program (9010) Community Wood Energy Program (9012)

6. Office of the Chief Economist Office of Energy Policy and New Uses USDA Research Efforts Research –Physical and social sciences –5 Biomass Research Centers (ARS and FS Leadership) Regional biomass focus Integrate energy biomass crops info food and forestry production systems Increase productivity and improve quality –National Institute of Food and Agriculture (NIFA) Agricultural Food and Research Initiative (AFRI) – Coordinated Agriculture Projects(CAPS) –Biomass Research and Development Initiative

7. Office of the Chief Economist Office of Energy Policy and New Uses No one feedstock will meet all national biofuel needs Concentrate on Specific Regional Feedstocks Crop residues Energy cane Non-food biomass sorghum Lipid seed crops Woody Biomass Invasive rangeland trees Perennial grasses

8. Office of the Chief Economist Office of Energy Policy and New Uses Regional Approaches to Bioenergy Systems –Coordinated Agricultural Projects (CAP) Regional partnerships –Academic, government, non-government, industry Work back from targets to develop entire supply chains Build on existing infrastructure and previous investments Integrate Research, Education, and Extension/Tech Transfer Robust sustainability analysis: Impacts on … –Economics, rural communities, and the environment Targeted Feedstocks (perennial grasses, energy cane, sorghum, woody biomass, oil crops) 2010-2013: 7 awards totaling ~$156 M over 5 years USDA Research Efforts

9. Office of the Chief Economist Office of Energy Policy and New Uses System for Advanced Biofuels Production from Woody Biomass In the Pacific Northwest U of Washington, $40,000,000 (5 years) 27 Key Personnel from 5 Universities, a Community College Consortium, and 2 Industrial Partners from 5 States: –Biogasoline, renewable aviation fuel –Purpose-grown poplar GreenWood Resources –Bioconversion and fuel production ZeaChem

10. Office of the Chief Economist Office of Energy Policy and New Uses Endowed with $200 million mandatory funds (serve to match funds from external entities) Advance the research mission of the Department by supporting agricultural research activities focused on addressing key problems of national and international significance Foster collaboration with agricultural researchers from the Federal Government, State governments, institutions of higher, industry, and nonprofit organizations. Operates as 501(c)3 (EXTERNAL TO USDA) Foundation for Food and Agriculture Research

11. Office of the Chief Economist Office of Energy Policy and New Uses FY15 Budget Request 3 Institutes funded at $25 million per year for 5 years One Institute would be National Network for Bioproduct Manufacturing Public-private partnerships Leverage a similar level of investment from the private partners Administered by NIFA Innovation Institutes

12. Office of the Chief Economist Office of Energy Policy and New Uses USDA Programs Technical and Financial Assistance –Rural Development –Forest Service –NRCS –Office of the Chief Economist/NIFA

13. Office of the Chief Economist Office of Energy Policy and New Uses Section 9003 Biorefinery Assistance Program Summary of 32 applications received, 2009 to 2012 NumberTechnologyFeedstockAdvanced Biofuel 3Anaerobic digestionAnimal manure, Municipal solid and food wastes Natural gas/Electricity (2008 FB definition) 5Thermo-chemical (F-T and similar processes) Woody Biomass, Municipal solid wasteGreen diesel, Green gasoline, Aviation Fuel, F-T waxes 6Biochemical (Enzymatic and steam hydrolysis) Woody Biomass, Energy grasses, Crop residues Cellulosic ethanol 3Thermo-chemical/ Bio-chemical hybrids Woody Biomass, Municipal solid wasteCellulosic ethanol 3Lipid Hydro-cracking (UOP process) Algae oil, non-food oilseeds (Camelina, high stearic canola), yellow grease, waste food oil Hydro-treated Jet (HRJ), Hydro-treated Diesel HRD), Naphtha 5Traditional (methyl ester) biodiesel Soy oil, yellow grease, waste food oils, reclaimed corn oil (ethanol distillers syrup) Biodiesel 7OthersVariousAnhydrous ammonia

14. Office of the Chief Economist Office of Energy Policy and New Uses Section 9003 - Biorefinery Assistance Program Investments in “First of its kind” commercial production Loan Note Guarantees issued: –Sapphire Energy, Inc., New Mexico, $54.5 million –INEOS New Planet BioEnergy, Florida, $75 million –Fremont Community Digester, Michigan, $12.8 million Conditional Commitments awarded: –Zeachem, Oregon, $232.5 million –Fiberight, Iowa, $25 million –Fulcrum Sierra Biofuels, Nevada, $105 million –Chemtex, North Carolina, $99 million

15. Office of the Chief Economist Office of Energy Policy and New Uses FY 2014 Biorefinery Assistance Applications NOFA closed January 30, 2014. 8 applications received $510 million in loan guarantee authority requested 4 States – Texas, Louisiana, Georgia, North Carolina 5 Technologies: –2 Green gasoline, diesel, and advanced aviation from woody biomass –Cellulosic ethanol from algae –2 Anaerobic digesters –Solid fuel pellets from woody biomass –2 Biodiesel from waste greases and oils

16. Office of the Chief Economist Office of Energy Policy and New Uses Biobased Products and the BioPreferred Program

17. Office of the Chief Economist Office of Energy Policy and New Uses Federal Procurement Preference Program USDA designates categories of biobased products Designated products receive procurement preference 97 product categories Over 10,000 products Product categories continue to be added

18. Office of the Chief Economist Office of Energy Policy and New Uses 2014 Major Farm Bill Amendments Begin to designate intermediate ingredients or feedstocks and assembled and finished biobased products within one year Promote biobased products, including forest products, that apply an innovative approach to any of the steps in the production process regardless of the date of entry into the marketplace Conduct economic impact study of the biobased products industry within one year $3 million per year mandatory funding (an increase from $2 million)

19. Office of the Chief Economist Office of Energy Policy and New Uses EISA – Renewable Fuel Standard

20. Office of the Chief Economist Office of Energy Policy and New Uses Proposed and Statutory Volumes For 2014 (Billion Gallons)

21. Office of the Chief Economist Office of Energy Policy and New Uses USDA Partnerships Farm to Fleet Program Defense Production Act EPA

22. Office of the Chief Economist Office of Energy Policy and New Uses DPA Title III Advanced Drop-In Biofuels Production Project Compan y LocationFeedstockConversion Pathway Annual Capacity (M gpy) Emerald Biofuels LouisianaFats, Oils, and Greases Hydroprocessed Esters and Fatty Acids (HEFA) 86.0 Natures BioReserv e South Sioux City, NE Fats, Oils, and Greases Hydroprocessed Esters and Fatty Acids (HEFA) 53.0 Fulcrum Brighton Biofuels Western United States Municipal Solid Waste Gasification – Fischer Tröpsch (FT) 17.0 Red Rock Biofuels Lakeview, OR Woody Biomass Gasification – Fischer Tröpsch (FT) 14.0

23. Office of the Chief Economist Office of Energy Policy and New Uses Farm to Fleet Agriculture, Navy Secretaries Promote U.S. Military Energy Independence with 'Farm-to-Fleet‘ WASHINGTON, Dec. 11, 2013 – Agriculture Secretary Tom Vilsack and Secretary of the Navy Ray Mabus today announced the U.S. Departments of Agriculture (USDA) and Navy's joint "Farm-to-Fleet" venture will now make biofuel blends part of regular, operational fuel purchase and use by the military. The announcement incorporates the acquisition of biofuel blends into regular Department of Defense (DOD) domestic solicitations for jet engine and marine diesel fuels. The Navy will seek to purchase JP-5 and F-76 advanced drop-in biofuels blended from 10 to 50 percent with conventional fuels. Funds from USDA's Commodity Credit Corporation (CCC) will assist the effort. Farm-to-Fleet builds on the USDA / U.S. Navy partnership inaugurated in 2010, when President Barack Obama challenged his Secretaries of Agriculture, Energy and Navy to investigate how they could work together to speed the development of domestic, competitively-priced "drop-in" diesel and jet fuel substitutes.

24. Office of the Chief Economist Office of Energy Policy and New Uses USDA Partnerships Biomass research and Development Initiative Joint USDA/DOE initiative (BRDI) $40M Interagency Groups Interagency Working Group on Alternative Fuels –DOE –FAA –EPA Public-private partnerships Farm to Fly 2.0 Initiative CAAFI – Commercial Aviation Alternative Fuels Initiative MASBI – Midwest Aviation Sustainable Biofuels Initiative

25. Office of the Chief Economist Office of Energy Policy and New Uses 25 F2F2 Agreement: April 2013, Washington DC … “THEREFORE, AS OUR GOAL, we the undersigned, jointly signify our intent to continue working together over the next five years in an expanded collabor ation entitled “Farm to Fly 2.0”, to enable commercially viable, sustainable bio-Jet Fuel supply chains in the U.S. that are able to support the goal of one billion gallons of bio- Jet Fuel production capacity and use for the Aviation Enterprise by 2018

26. Office of the Chief Economist Office of Energy Policy and New Uses The Road Ahead Promising for an emerging bioeconomy There will be challenges Require Public – Private Sector Partnerships Leads to Jobs Energy Security Growth

27. Office of the Chief Economist Office of Energy Policy and New Uses THANK YOU