[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
     HEARING TO REVIEW RENEWABLE FUELS STANDARD IMPLEMENTATION AND
                    AGRICULTURE PRODUCER ELIGIBILITY

=======================================================================


                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON CONSERVATION, CREDIT,
                          ENERGY, AND RESEARCH

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                        THURSDAY, JULY 24, 2008

                               __________

                           Serial No. 110-44


          Printed for the use of the Committee on Agriculture
                         agriculture.house.gov



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                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

TIM HOLDEN, Pennsylvania,            BOB GOODLATTE, Virginia, Ranking 
    Vice Chairman                    Minority Member
MIKE McINTYRE, North Carolina        TERRY EVERETT, Alabama
BOB ETHERIDGE, North Carolina        FRANK D. LUCAS, Oklahoma
LEONARD L. BOSWELL, Iowa             JERRY MORAN, Kansas
JOE BACA, California                 ROBIN HAYES, North Carolina
DENNIS A. CARDOZA, California        TIMOTHY V. JOHNSON, Illinois
DAVID SCOTT, Georgia                 SAM GRAVES, Missouri
JIM MARSHALL, Georgia                MIKE ROGERS, Alabama
STEPHANIE HERSETH SANDLIN, South     STEVE KING, Iowa
Dakota                               MARILYN N. MUSGRAVE, Colorado
HENRY CUELLAR, Texas                 RANDY NEUGEBAUER, Texas
JIM COSTA, California                CHARLES W. BOUSTANY, Jr., 
JOHN T. SALAZAR, Colorado            Louisiana
BRAD ELLSWORTH, Indiana              JOHN R. ``RANDY'' KUHL, Jr., New 
NANCY E. BOYDA, Kansas               York
ZACHARY T. SPACE, Ohio               VIRGINIA FOXX, North Carolina
TIMOTHY J. WALZ, Minnesota           K. MICHAEL CONAWAY, Texas
KIRSTEN E. GILLIBRAND, New York      JEFF FORTENBERRY, Nebraska
STEVE KAGEN, Wisconsin               JEAN SCHMIDT, Ohio
EARL POMEROY, North Dakota           ADRIAN SMITH, Nebraska
LINCOLN DAVIS, Tennessee             TIM WALBERG, Michigan
JOHN BARROW, Georgia                 BOB LATTA, Ohio
NICK LAMPSON, Texas
JOE DONNELLY, Indiana
TIM MAHONEY, Florida
TRAVIS W. CHILDERS, Mississippi

                                 ______

                           Professional Staff

                    Robert L. Larew, Chief of Staff

                     Andrew W. Baker, Chief Counsel

                 April Slayton, Communications Director

           William E. O'Conner, Jr., Minority Staff Director

                                 ______

       Subcommittee on Conservation, Credit, Energy, and Research

                   TIM HOLDEN, Pennsylvania, Chairman

STEPHANIE HERSETH SANDLIN, South     FRANK D. LUCAS, Oklahoma, Ranking 
Dakota                               Minority Member
HENRY CUELLAR, Texas                 MIKE ROGERS, Alabama
JIM COSTA, California                STEVE KING, Iowa
BRAD ELLSWORTH, Indiana              JEFF FORTENBERRY, Nebraska
ZACHARY T. SPACE, Ohio               JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota           TIM WALBERG, Michigan
DAVID SCOTT, Georgia                 TERRY EVERETT, Alabama
JOHN T. SALAZAR, Colorado            JERRY MORAN, Kansas
NANCY E. BOYDA, Kansas               ROBIN HAYES, North Carolina
KIRSTEN E. GILLIBRAND, New York      SAM GRAVES, Missouri
DENNIS A. CARDOZA, California        MARILYN N. MUSGRAVE, Colorado
LEONARD L. BOSWELL, Iowa
STEVE KAGEN, Wisconsin
JOE DONNELLY, Indiana

               Nona Darrell, Subcommittee Staff Director
                             C O N T E N T S

                              ----------                              
                                                                   Page
Goodlatte, Hon. Bob, a Representative in Congress from Virginia, 
  opening statement..............................................    15
Graves, Hon. Sam, a Representative in Congress from Missouri, 
  prepared statement.............................................     4
Holden, Hon. Tim, a Representative in Congress from Pennsylvania, 
  opening statement..............................................     1
Lucas, Hon. Frank D., a Representative in Congress from Oklahoma, 
  opening statement..............................................     2
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, prepared statement..................................     3
Salazar, Hon. John T., a Representative in Congress from 
  Colorado, prepared statement...................................     3

                               Witnesses

Meyers, Hon. Robert J., Principal Deputy Assistant Administrator, 
  Office of Air and Radiation, U.S. Environmental Protection 
  Agency, Washington, D.C.; accompanied by William ``Bill'' Hagy 
  III, Deputy Administrator for Business Programs, Office of 
  Rural Development, U.S. Department of Agriculture..............     4
    Prepared statement...........................................     6
    Response to submitted questions..............................   111
Wong, Jetta L., Senior Policy Associate, Sustainable Biomass and 
  Energy Program, Environmental and Energy Study Institute, 
  Washington, D.C................................................    19
    Prepared statement...........................................    21
    Response to submitted questions..............................   120
Blazer, Arthur ``Butch'', Forester, State of New Mexico; 
  Executive Member, Council of Western State Foresters; Executive 
  Member, National Association of State Foresters, Santa Fe, NM..    51
    Prepared statement...........................................    53
    Response to submitted questions..............................   130
Burke III, John W., Tree Farmer, Caroline County, VA; Partner, 
  McGuire Woods LLP, Richmond, VA................................    56
    Prepared statement...........................................    57
Grant, Duane, Partner and General Manager, Grant 4-D Farms; 
  General Manager, Fall River Farms; Vice Chairman of the Board, 
  Snake River Sugar Company, Rupert, ID..........................    60
    Prepared statement...........................................    63
Cassman, Ph.D., Kenneth G., Director, Nebraska Center for Energy 
  Sciences Research; Professor, Department of Agronomy and 
  Horticulture, University of Nebraska-Lincoln, Lincoln, NE......    65
    Prepared statement...........................................    66
    Response to submitted questions..............................   133
McDill, Ph.D., Marc E., Associate Professor of Forest Management, 
  School of Forest Resources, Penn State College of Agricultural 
  Sciences, University Park, PA..................................    77
    Prepared statement...........................................    78

                           Submitted Material

Consortium of Agricultural Soils Mitigation of Greenhouse Gases, 
  submitted letter...............................................   107
Imbergamo, William, Director, Forest Policy, American Forest & 
  Paper Association, submitted statement.........................   100
Jobe, Joseph, CEO, National Biodiesel Board, submitted letter and 
  statement......................................................   102
Moran, Hon. Jerry, a Representative in Congress from Kansas, 
  submitted letter...............................................    95
Rounds, Hon. M. Michael, Governor, State of South Dakota; 
  Chairman, Midwestern Governors Association, submitted statement   105
Ruth, Bart, Member, 25x'25 National Steering Committee, submitted 
  statement......................................................    96


     HEARING TO REVIEW RENEWABLE FUELS STANDARD IMPLEMENTATION AND



                    AGRICULTURE PRODUCER ELIGIBILITY

                              ----------                              


                        THURSDAY, JULY 24, 2008

                  House of Representatives,
 Subcommittee on Conservation, Credit, Energy, and 
                                          Research,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:02 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. Tim 
Holden [Chairman of the Subcommittee] presiding.
    Members present: Representatives Holden, Herseth Sandlin, 
Cuellar, Ellsworth, Space, Boyda, Gillibrand, Donnelly, 
Peterson (ex officio), Lucas, King, Fortenberry, Moran, and 
Goodlatte (ex officio).
    Staff present: Nona Darrell, Adam Durand, Anne Simmons, 
Kristin Sosanie, Kevin Kramp, Josh Maxwell, Rita Neznek, and 
Jamie Weyer.

   OPENING STATEMENT OF HON. TIM HOLDEN, A REPRESENTATIVE IN 
                   CONGRESS FROM PENNSYLVANIA

    The Chairman. This hearing of the Subcommittee on 
Conservation, Credit, Energy, and Research to Review Renewable 
Fuel Standard implementation and agriculture producer 
eligibility will come to order. I would like to thank the 
witnesses for being here, and I look forward to their 
testimony.
    Today we are going to look at issues surrounding the 
implementation of the Renewable Fuel Standard and agricultural 
eligibility.
    It is often said that the Agriculture Committee is the most 
bipartisan Committee, and I think the recently passed farm bill 
proved that with real differences falling along regional rather 
than partisan lines. Successful agricultural policy must 
therefore recognize that farmers, ranchers, and foresters 
throughout the country have a wide range of need. And we must 
work to help each of them in their local environment.
    Likewise, if the Renewable Fuel Standard is to be a 
success, it must be flexible and address the realities that all 
agriculture producers face throughout the country regardless of 
location. In these times of record energy prices, it is 
critical that we take advantage of our agricultural and natural 
resources as we move towards energy independence.
    The Agriculture Committee and Congress overwhelmingly 
supported renewable energy programs in the 2008 Farm Bill, 
making historic investments in research, development, and 
production. The RFS that passed in December guarantees a market 
for renewable biofuel production as our homegrown alternative 
to foreign oil.
    But without a clear and workable regulatory framework, it 
is likely that the RFS will be unworkable for many regions and 
inadvertently introduce uncertainty in the market for 
investment and second generation biofuels. Uncertainty during 
this pivotal time will delay and threaten the aggressive 
targets set for RFS and hold us back from achieving energy 
independence.
    There is concern that unnecessary restrictions in the 
definition of renewable biomass will severely limit the 
majority of private forestland owners from participating in the 
RFS. This will leave out entire regions of the country, 
including my home State of Pennsylvania, where most of the 
forestland is unlikely to be classified as an actively managed 
tree plantation.
    Responsible feedstock harvesting on public and private land 
is critical for the widescale biofuel production and the rural 
communities they support. Likewise, there are questions about 
the processes for determining and enforcing RFS lifecycle 
greenhouse gas emissions regulations. It is important for the 
emerging second generation biofuels industry that we get these 
regulations right. I believe that farmers will continue to be 
stewards of the land in addition to safely and reliably 
producing food, fiber and renewable energy.
    As our economy diversifies its energy supply, I strongly 
believe that agriculture producers in rural communities will 
play an important role during this transition. I hope this 
hearing serves as an opportunity to learn about some of the 
challenges and opportunities we face during the Renewable Fuel 
Standard implementation.
    I look forward to hearing from our witnesses today, and I 
call on my friend, the Ranking Member from Oklahoma, Mr. Lucas.

 OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN 
                     CONGRESS FROM OKLAHOMA

    Mr. Lucas. Thank you, Mr. Chairman, for calling today's 
hearing so that we can review the EPA's implementation of the 
Renewable Fuel Standard.
    Oklahoma has long been known for its energy production from 
oil and gas fields. However, the potential for renewable energy 
production from my home state is endless. In my district alone, 
we provide animal and plant based corn crops for conventional 
ethanol and land gross cellulosic crops from switchgrass to 
help meet those RFS mandates.
    During the development of the recently enacted farm bill, I 
worked with Chairman Peterson and yourself, Mr. Chairman, to 
craft an energy title that would help provide new markets for 
agricultural crops and enhance the economic development of our 
rural areas. Our energy title will help producers transition to 
cellulosic crop production, incentivize the purchase of these 
crops during the development stage, provide guaranteed loans to 
build cellulosic ethanol plants, and provide assistance to 
ethanol plants for the use of biomass for repowering.
    The energy title this Committee developed will help with 
the transition away from food to fuel as an energy source so 
that we can meet the RFS. However, I am concerned that 
provisions in the RFS restrict new lands from growing 
cellulosic crops. Currently producers are seeing record prices 
for the crops, and unless they can open up new land, they will 
have no incentive to grow cellulosic crops.
    In addition, the increase in the RFS is adversely affecting 
or impacting the availability and the price of feed grains for 
our livestock producers. In the 2007 first quarter of the U.S. 
corn crop was directed literally--well, I should say \1/4\ of 
the corn crop was directed to ethanol production. The EPA has 
the authority to waive the RFS requirement when the 
implementation of the requirement would adversely harm the 
environment or the economy.
    I believe the EPA needs to take a hard look at the impacts 
that the mandate is having on livestock producers. We need to 
place more emphasis on developing advanced biofuels, such as 
cellulosic biofuels, to meet the RFS mandate. By continuing to 
diversify our biofuels production, we can alleviate the 
pressure that is being placed on the agricultural supply and 
price concerns associated with corn ethanol.
    Again, Mr. Chairman, thank you for calling this hearing, 
and I look forward to what we hear today.
    The Chairman. The chair thanks the Ranking Member and would 
request that all of the Members submit their opening statements 
for the record.
    [The prepared statements of Mr. Peterson, Salazar, and 
Graves follow:]

  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress From Minnesota
    Thank you Mr. Chairman. Thank you for calling this hearing.
    Much of what we do here in the Agriculture Committee is about 
finding the balance between the diverse needs and situations in 
American agriculture. With so many different sectors overlapping to 
create farm, food and energy policy, we're used to working carefully to 
move the country forward in the best way possible--for everyone 
involved.
    I've said it many times before, but this is an exciting time for 
American agriculture. Rural America has the opportunity to move us 
toward energy independence by producing agriculturally-based bioenergy 
here at home. The Renewable Fuel Standard will help ensure that we move 
towards the next generation of advanced biofuels as we expand domestic 
production.
    I remain concerned about some of the language included in the final 
RFS legislation. And throughout the implementation process, I expect 
the EPA to consult with the USDA on issues that involve the production 
of feedstocks and use the resources at land-grant universities and the 
Department.
    But that is why it's important to have hearings such as this one to 
get these issues out in the open and ensure that the final result is 
workable for all feedstock producers. I look forward to hearing from 
the witnesses and thank you all for coming today.
                                 ______
                                 
    Prepared Statement of Hon. John T. Salazar, a Representative in 
                         Congress From Colorado
    Good morning, I would like to thank Chairman Holden and Ranking 
Member Lucas for holding this important hearing.
    I also want to thank the witnesses of the two panels for coming to 
testify. The information you provide is vital to continue the 
conversation on reducing greenhouse gas emissions and becoming energy 
independent.
    We can all agree that we need more diversified and reliable sources 
of energy.
    The creation of the Renewable Fuel Standard helped bring other 
sources to the forefront, such as corn-based ethanol and biodiesel 
production.
    As a rancher and a Coloradoan, I am extremely proud of both of 
these resources.
    In 2007, corn production was a record 13.1 billion bushels. While 
this increase has helped producers, farmers across America have 
received backlash regarding the food versus fuel debate.
    At the same time, biofuel production remains a key component of our 
energy independence.
    In my district, the San Juan Bioenergy project is set to open by 
this summer's end.
    Biodiesel provides economic opportunities for farmers by creating a 
value added crop. For example, San Juan Bioenergy will be creating 
biodiesel from sunflower and canola oils.
    We need to encourage more projects like the one in my district.
    While considering the RFS, its definitions, and implementation, we 
need to continue to look at the big picture.
    The mandates set by the RFS can be costly, so consideration 
regarding their execution should be taken seriously.
    With that said, I am anxious to hear the thoughts of our panelists 
as they discuss these issues.
    Again, thank you Mr. Chairman and Ranking Member.
                                 ______
                                 
  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
                             From Missouri
    Thank you, Chairman Holden and Ranking Member Lucas for holding 
this hearing on the implementation of the Renewable Fuel Standard.
    The Renewable Fuel Standard will provide our nation with an 
alternative, domestically produced fuel that can help alleviate our 
reliance on foreign oil. The United States needs to become more self-
sufficient in energy production, and the best way to do that is to 
promote the development of alternative fuels.
    The United States consumes roughly 20 million barrels of oil a day. 
Relying on imported oil makes our economy and national security 
vulnerable to foreign governments, some of which are hostile to U.S. 
interests. The Renewable Fuel Standard not only reduces our reliance on 
foreign sources of fuel, but it is also good for farmers and the 
environment.
    The United States should continue to promote the use of 
alternative, domestically-produced fuels such as biodiesel and ethanol. 
Fortunately, farmers in Missouri and across the nation have expanded 
the ethanol industry at a record pace. Now it is time we see the quick 
implementation of these policies and work toward developing the 
infrastructure to make the Renewable Fuel Standard successful and 
withstanding.
    Quickly implementing and further exploring uses for alternative 
fuels is good for the country, and I look forward to working with my 
colleagues to achieve these goals. Again, I would like to thank the 
Committee for holding this hearing.
    Thank you.

    The Chairman. We would like to welcome our first panelist, 
the Hon. Robert Meyers, Principal Deputy Assistant 
Administrator for the Office of Air and Radiation from the 
United States Environmental Protection Agency. Mr. Meyers, you 
may begin when you are ready.

STATEMENT OF HON. ROBERT J. MEYERS, PRINCIPAL DEPUTY ASSISTANT 
                ADMINISTRATOR, OFFICE OF AIR AND
 RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY, WASHINGTON, 
    D.C.; ACCOMPANIED BY WILLIAM ``BILL'' HAGY III, DEPUTY 
                   ADMINISTRATOR FOR BUSINESS
          PROGRAMS, OFFICE OF RURAL DEVELOPMENT, U.S.
                   DEPARTMENT OF AGRICULTURE

    Mr. Meyers. Thank you, Mr. Chairman and Members of 
Subcommittee, and I appreciate the opportunity to be here today 
talking about our implementation of the Energy Independence and 
Security Act and its provisions regarding biofuels.
    The EPA is responsible for implementing the RFS program, 
which was originally established in the Energy Policy Act of 
2005 as Section 211(o) of the Clean Air Act. Since EISA was 
enacted in December 2007, the Agency has been working very hard 
to develop an effective program under the new and amended RFS 
provisions which we commonly refer to as RFS2.
    In this regard, Agency staff has met with more than 30 
different stakeholders including renewable fuel producers, 
technology companies, petroleum refiners and importers, 
agricultural associations, owners associations, environmental 
groups, gasoline and petroleum marketers, pipeline owners, and 
fuel terminal operators.
    We also continue to meet and collaborate regularly with the 
Departments of Energy and Agriculture as well as the Forest 
Service. EPA can and will draw from its experience in 
developing the original RFS regulations. It is important to 
understand that EISA has made a significant number of changes 
to the RFS program.
    First EISA increased the total renewable fuel volume 
mandate fivefold over the 2005 Energy Bill and extended the 
statutory deadline scheduled for the RFS by 10 years. Therefore 
development of substantial infrastructure capable of 
delivering, storing, and blending these volumes of renewable 
fuels in new markets and expanding existing market capabilities 
will be needed.
    Second, the EISA extended the RFS program to include both 
on-road and nonroad gasoline and diesel fuel volumes. Extending 
the program to producers and importers of on-road and nonroad 
gasoline and diesel fuel was a significant change and may 
affect many new parties including some small businesses.
    Third, EISA increased the number of renewable fuel category 
standards to a total of four, including total renewable fuel, 
and subcategories, each with its own required minimum bottoms, 
advanced biofuels, biomass-based diesel and cellulosic fuels.
    EISA also specifies that by 2022, cellulosic volumes should 
exceed the volumes required for what might be termed as 
conventional corn-based ethanol.
    Fourth, new provisions are included in EISA that require 
EPA to apply lifecycle greenhouse gas performance standards to 
each category of renewable fuel. Lifecycle greenhouse gas 
emissions is a defined term under the Act and generally refers 
to the aggregate quantity of greenhouse gas emissions related 
to the full fuel lifecycle, including all stages of fuel and 
feedstock production distribution.
    There being separate elements and complexities of this 
definition, EPA is presently working with our interagency 
partners to develop appropriate approaches. In general, work is 
necessary on lifecycle with respect to the modeling framework, 
better understanding of GHG emission sources, and development 
of key components for the agricultural sector, biofuel 
production, and baseline petroleum fuel. While EPA has done 
considerable work in this area, additional new and improved 
analysis will be necessary.
    Fifth, EISA adds a number of new provisions, including 
changing the definition of renewable fuel feedstocks in a 
fundamental manner. Developing appropriate enforceable 
regulations addressing this provision will require extensive 
dialogue with USDA, USDR, DOE, the agricultural community, and 
the renewable fuel producers, and others.
    Finally, as required by Congress, we will be assessing the 
impacts of EISA Renewable Fuel Program on vehicle emissions, 
air quality, greenhouse gases, water quality, land use, and 
energy security. These analyses will provide important 
information to the public and Congress on the effectiveness of 
the new legislation.
    With respect to other implementation issues, as I am sure 
you are aware, Texas Governor Rick Perry sent a letter to EPA 
Administrator Johnson on April 25 requesting a partial waiver 
of the 2008 RFS volume obligations. The comment period for this 
request closed on June 23, and we have received approximately 
15,000 comments with 150 substantive comments from a wide range 
of stakeholders including: individual companies and 
associations; farmers, cattle, beef, and poultry industries; 
the food and grain industries; and others.
    We are actively evaluating these comments and other 
pertinent information. However, it is clear that some 
additional time is needed to allow us to accurately review and 
respond to public comments and to develop a decision document 
that explains the technical, economic, and legal rationale for 
our decision.
    We will be using this time to continue our coordination, as 
required by EISA, with USDA and DOE, and I am confident the 
agency will be able to make a final determination on the waiver 
request by early August of this year.
    In closing, EPA is faced with many challenges with the 
development of regulations to implement the RFS2. We are 
attempting to utilize the successful approach we employed in 
developing the regulations for the original RFS program. I look 
forward to working with Members of Congress and this Committee 
and many other stakeholders during this process. Thank you very 
much.
    [The prepared statement of Mr. Meyers follows:]

Prepared Statement of Hon. Robert J. Meyers, Principal Deputy Assistant 
     Administrator, Office of Air and Radiation, U.S. Environmental
                  Protection Agency, Washington, D.C.
    Mr. Chairman and Members of the Subcommittee, I appreciate the 
opportunity to come before you today to testify on implementation of 
the renewable fuel provisions of the Energy Independence and Security 
Act of 2007 (EISA). The Act's aggressive new Renewable Fuel Standard 
(RFS) will further our nation's goals of achieving energy security and 
reducing greenhouse gases by building on the successful RFS program 
established by the Energy Policy Act of 2005 (EPAct 2005).
    Renewable fuels are a key element of a national strategy for 
addressing our energy security and the challenge of global climate 
change. The national Renewable Fuel Standard, in combination with the 
vehicle fuel economy standards in EISA, will reduce emissions of 
greenhouse gases in the transportation sector and improve our energy 
security. The changes brought about by EISA are expected to prevent the 
release of billions of metric tons of greenhouse gases emissions into 
the atmosphere over the next several decades.
    The Environmental Protection Agency is responsible for implementing 
the RFS program, and we are proud of our success to date in working 
with stakeholders in industry, states and the environmental community 
to build an effective program for increasing the volumes of renewable 
fuel used by the transportation sector. In April 2007 we announced 
final regulations for implementing the RFS Program under EPAct 2005. 
The Agency worked very closely with both our Federal partners and 
stakeholders to develop broad support for the program. This program was 
officially launched in September 2007. We believe our success is 
grounded on our close collaboration with stakeholders on the design and 
implementation of the program.
    Since EISA was signed into law on December 19, 2007, the Agency has 
been working diligently to develop regulations to implement the new RFS 
program established by that legislation, commonly called RFS2. Our 
first and most pressing task was to issue a new renewable volume 
standard for 2008. The RFS program established by EPAct 2005 required 
5.4 billion gallons of renewable fuel in 2008. The EISA legislation 
increased the standard to 9 billion gallons in 2008, with annual 
increases in mandated volumes resulting in 36 billion gallons being 
required in 2022. We published a notice implementing the 2008 volume 
requirement in the Federal Register on February 14 of this year.
    While the RFS program established under EPAct 2005 provides a solid 
foundation for the new regulations, RFS2 includes new elements which 
add complexity to the program. As a result, the new EISA provisions 
require careful evaluation and considerable new analysis.
    In this new undertaking, the Agency is following much of the same 
approach we used in developing the first RFS program. This includes 
obtaining critical input from our stakeholders throughout the 
rulemaking process. Since EISA was enacted less than 7 months ago, the 
Agency has met with more than thirty different stakeholders, including 
renewable fuel producers, technology companies, petroleum refiners and 
importers, agricultural associations, environmental groups, gasoline 
and petroleum marketers, pipeline owners and fuel terminal operators. 
Agency technical staff have participated in numerous conferences and 
workshops, which have allowed us to reach a broad range of technical, 
programmatic and policy issue experts. We also continue to meet and 
collaborate regularly with the Departments of Energy and Agriculture. 
Through these meetings, EPA has sought input on the key RFS2 program 
design elements as highlighted in this testimony.
    While EPA will draw from its experience in developing the original 
RFS regulations, it is important to understand that EISA made a 
significant number of changes to the RFS program. First, as mentioned 
previously, RFS2 increases the total renewable fuel volumes mandated to 
36 billion gallons a year by 2022. This is nearly a five fold increase 
over the 7.5 billion gallons a year mandated under EPAct 2005 for 2012, 
and constitutes a 10 year extension of the schedule provided for in 
that legislation. EPA believes that the implications of this 
substantial increase are not trivial. Development of infrastructure 
capable of delivering, storing and blending these volumes in new 
markets and expanding existing market capabilities will be needed. In 
addition, the market's absorption of increased volumes of ethanol will 
ultimately require new ``outlets'' beyond E10 blends (i.e., gasoline 
containing 10% ethanol by volume). A rule of thumb estimate is that E10 
blends, if used nationwide, would utilize approximately 15 billion 
gallons of ethanol. Accommodating approximately an additional 20 
billion gallons of ethanol-blended fuel is expected to require an 
expansion of the number of flexible-fuel E85 vehicles and their 
utilization of E85 and/or other actions. New emerging renewable fuel 
production technologies may hold potential to make gasoline and diesel-
like fuels from renewable sources. The Agency will continue to monitor 
and evaluate the development of such technologies as we implement the 
RFS program over the coming years.
    Second, beyond the significant increase in the volume mandate, EISA 
extended the RFS program to include both non-road gasoline and diesel 
fuel volumes. Under the regulations implementing EPAct 2005, RFS volume 
requirements were applied only to producers and importers of on-road 
gasoline. The extension of this program to both non-road gasoline and 
diesel fuel volumes, along with the potential for opt-in by 
participants of the home heating oil and jet fuel markets is a 
significant change that may affect new parties, including a number of 
small businesses that have not been regulated under this program in the 
past.
    Third, EISA has established new categories of renewable fuel. EPAct 
2005 established standards for two categories of renewable fuels: one 
standard for the total volume of renewable fuel; and a second standard 
for cellulosic ethanol requiring 250 million gallons beginning in 2013. 
RFS2 increased the number of renewable fuel categories and standards to 
a total of four, including total renewable fuel and three new 
categories within that with unique volume requirements: advanced 
biofuels, biomass-based diesel and cellulosic biofuels. Industry will 
be required to demonstrate compliance with the four separate fuel 
standards. This will likely require the obligated parties, producers 
and importers, to forge new business relationships and contracts that 
are necessary to guarantee their compliance with the new standards. 
Establishing the necessary systems to track and verify the production 
and distribution of these fuels and demonstrate compliance with four 
separate standards will also require sufficient lead time to design and 
implement these new tracking systems. As in the current program under 
EPAct 2005, in the near term, some parties may not be able to comply by 
blending the renewable fuels, and thus may need to purchase or trade 
credits for the appropriate number and category of fuels to satisfy 
their volume obligations. It will be very important to conduct 
effective outreach with these parties to support a smooth 
implementation. In addition, certain requirements in RFS2 pertain only 
to renewable fuel production facilities that commence construction 
after the legislation was enacted. EPA will need to carefully consider 
how this new provision should be interpreted.
    As part of its restructuring of the renewable fuel mandate, EISA 
increased the cellulosic biofuel mandate from 250 million to 1.0 
billion gallons by 2013, with additional yearly increases to 16 billion 
gallons in 2022. EISA also provided a new definition of this fuel: 
cellulosic biofuel must be derived from renewable biomass, which 
includes requirements that place various limitations on the types of 
land from which the feedstocks are taken, and a cellulosic biofuel must 
also have lifecycle greenhouse gas emissions that are at least 60 
percent less than the baseline lifecycle greenhouse gas emissions for 
petroleum based fuel (RFS2 established the baseline year as 2005).
    Implementing these requirements will entail additional work by EPA 
as it develops its upcoming regulation. For example, the Act authorizes 
EPA in certain circumstances to adjust the cellulosic biofuel standard 
to a level lower than that specified in the law. However it requires in 
this circumstance that the Agency also make credits available for 
compliance purposes and provides instructions on how to establish a 
specific price for these credits. The Agency will therefore need to 
address several critical issues, such as the quantity of credits to be 
generated, to whom they will be available, the extent to which they can 
be traded, and the life of the credit.
    RFS2 also established for the first time minimum volume standards 
for biomass based diesel fuel. These standards begin in 2009 at a half 
billion gallons and ramp up to 1 billion gallons per year in 2012 and 
thereafter. To qualify as biomass based diesel, the renewable fuel 
portion of the biomass based diesel blend must result in greenhouse gas 
emissions that are at least 50 percent lower than the baseline GHG 
emissions for petroleum based diesel fuel (RFS2 established the 
baseline year as 2005) and cannot be co-processed with a petroleum 
feedstock.
    Fourth, EISA requires the Agency to apply lifecycle greenhouse gas 
(GHG) performance threshold standards to each category of renewable 
fuel. Congress provided a specific definition of lifecycle analysis 
that requires EPA to consider all stages of fuel and feedstock 
production and distribution, from feedstock generation or extraction 
through the distribution and use of the finished fuel to the ultimate 
consumer. The Act also specifies that EPA take into account both direct 
emissions and significant indirect emissions such as emissions from 
land use changes.
    EPA is currently developing a methodology that meets the EISA 
requirements. This effort builds on a substantial amount of work the 
Agency has done in this area, beginning with our analysis of the 
lifecycle GHG impact of the renewable fuel volumes required by the RFS1 
program. EPA has expanded the methodology to include secondary 
agricultural sector impacts and land use changes. The Agency is 
continuing to further refine and improve our analyses as we prepare to 
implement the statute's lifecycle GHG performance thresholds.
    Given the importance of lifecycle analysis to the success of the 
RFS2 program and the complexity of this work, the Agency has been 
working closely with stakeholders. Through multiple meetings with a 
broad range of groups--including the Departments of Energy and 
Agriculture, academics and lifecycle experts, environmental 
organizations, renewable fuel producers, and refiners--we have shared 
our approach and sought input on the key assumptions and modeling tools 
necessary to conduct a complete lifecycle analysis that meets the EISA 
criteria. These discussions have been extremely valuable to the Agency 
and we plan to maintain this high level of stakeholder engagement 
throughout the rule development process.
    Fifth, RFS2 added a number of other new provisions, including 
changing the definition of renewable fuel feedstocks in a fundamental 
manner. The new law limits the crops and crop residues used to produce 
renewable fuel to those grown on land cleared or cultivated at any time 
prior to enactment of EISA, that is either actively managed or fallow, 
and non-forested. EISA also requires that forest-related slash and tree 
thinnings used for renewable fuel production pursuant to the Act be 
harvested from non-Federal forestlands. Developing appropriate and 
enforceable regulations addressing these provisions requires extensive 
dialogue with USDA, USTR, the agricultural community and renewable fuel 
producers to better understand current practices and changes in 
practices that can be developed, implemented and enforced. The Agency 
has started these discussions and plans to continue this dialogue 
throughout the regulatory process.
    Finally, in support of the rulemaking, we are assessing the many 
impacts of the EISA renewable fuel program. Assessments are underway to 
understand the impacts on emissions and air quality (greenhouse gases, 
ozone, particulate matter and toxics), water impacts (including water 
quality and consumption), agricultural sector impacts (including direct 
and indirect land use change), energy security, and economic impacts 
(such as cost of fuels and feedstocks). Detailed information will be 
needed for the draft regulatory impact analysis (RIA), which we intend 
to release with the proposed rules. These analyses will provide 
important information to the public and Congress on the many 
anticipated impacts of the new legislation.
    As you are aware, Texas Governor Rick Perry sent a letter to EPA 
Administrator Johnson on April 25 requesting a partial waiver of the 
2008 RFS volume obligations required by EISA. Governor Perry requests 
the volume requirement be reduced by 50 percent, from 9 billion gallons 
in 2008 to 4.5 billion gallons. This waiver request states that the 
mandate is having an ``unnecessarily negative impact on Texas' 
otherwise strong economy while driving up global food prices''. Under 
authority and direction provided in EPAct 2005 and EISA 2007, the 
Agency has 90 days from the date of receipt of this request to issue a 
decision. We issued a Federal Register notice on May 22, requesting 
public comment on this request. The comment period closed on June 23. 
We received over 15,000 comments, with over 150 substantive comments 
from a wide range of stakeholders including individual companies and 
associations representing renewable fuel producers, farmers, cattle, 
beef and poultry industries, the food and grain industries and many 
others. We have been evaluating these comments and other pertinent 
information and conducting the analysis necessary to support a decision 
by the Administrator. Of course, EPA is also consulting extensively 
with our colleagues at the Departments of Agriculture and Energy.
    EPA has also been closely monitoring the aftermath of the Midwest 
floods to determine to what extent this natural disaster may impact the 
renewable fuel program. We have had multiple discussions with the USDA, 
DOE, renewable fuel producers, oil companies, petroleum marketers and 
state authorities. We are evaluating both impacts on feedstock (e.g., 
corn, soybeans, etc.) availability for use in ethanol production, as 
well impacts on fuel production and distribution systems. The extent of 
these impacts has not yet been fully determined. If there are short 
term impacts to ethanol production and distribution, the RFS program 
provides certain flexibility. For example, obligated parties may comply 
over the course of a 1 year period, allowing use of excess and 
previously generated credits. We will continue to coordinate and 
collaborate with DOE and USDA closely on these issues as directed by 
the statute and provide updates on this as necessary.
    In closing, the Agency is moving forward with the development of 
regulations implementing the RFS2 provisions and is utilizing the 
successful approach we employed in developing the regulations for the 
original RFS program. We look forward to working closely with Members 
of Congress and our many other stakeholders during this process.
    Thank you, Mr. Chairman, and Members of the Subcommittee for this 
opportunity. This concludes my prepared statement. I would be pleased 
to answer any questions that you may have.

    The Chairman. Thank you, Mr. Meyers. So on Governor Perry's 
request for a waiver, you said by early August, you believe 
that there will be decision that will be made?
    Mr. Meyers. Yes.
    The Chairman. Okay, thank you. Mr. Meyers, the energy bill 
contained a specific definition of lifecycle analysis for 
greenhouse gas emissions, and as you mentioned in your 
testimony, this requires EPA to consider all stages of fuel and 
feedstock production. How does EPA plan to proceed on this? Do 
you think that you will have to go on the farm to measure and 
monitor this? And have you been working closely with the 
Department as you move forward on this?
    Mr. Meyers. First of all, yes, we have been working very 
closely with USDA and also Department of Energy, who has one of 
the models that we utilize, the GREET model, to measure 
lifecycle greenhouse gas emissions. This is a new task for the 
agency.
    It is a mandatory task under the Act, but essentially the 
legislative language focuses on the aggregate quantity of 
greenhouse gas emissions. So I think the intent of your 
question was whether we would need to go into each individual 
farm or each individual production facility to determine what 
their specific greenhouse gas lifecycle profile is.
    We don't anticipate doing that. I think the practicality of 
the situation calls for an averaging approach in terms of 
different categories of greenhouse gas. We will need to 
calculate it. We will need to give full faith and credit to the 
legislative language, but we believe we can use an averaging 
approach so we won't be looking at individual facilities.
    The Chairman. Mr. Meyers, how is EPA interpreting the 
actively managed tree plantations in the immediate vicinity 
language in the definition of renewable biomass? And what 
issues have you encountered while trying to determine what 
these terms mean?
    Mr. Meyers. You are pointing out one of the challenges of 
interpreting this entirely new legislative language. We are 
looking at that, and we will be--obviously we are at pre-
proposal stage. At proposal stage, we will be taking comment on 
those definitions, normal rules of statutory interpretation, 
plain meaning of the statute. We believe we can work with our 
state colleagues. We are having discussions with regard to 
those terms, but we will be proposing and taking comment on all 
those terms.
    The Chairman. Mr. Meyers, I mentioned uncertainty in my 
opening statement. What can you do to minimize the level of 
regulatory uncertainty in the market with greenhouse gas 
emissions reductions and the potential liability issues 
surrounding ineligible feedstocks in the supply chain, so as 
not to discourage the private investment needed to meet the 
aggressive RFS targets?
    Mr. Meyers. Well, I think our experience with RFS1 and the 
way we developed regulations there helped a lot in terms of 
even before we proposed the regulations, I think outreach to 
the community, the effected community, regulated community is 
essential in the matter, and that is exactly what we are doing 
in the RFS2.
    But certainly in marketplaces, we envision that--again we 
are pre-proposal, but we envision using some of the same 
structures we have already put in place in RFS1. In other 
words, structures such as the RIN, renewable numbers that 
basically track and will identify the quantities of renewable 
fuel moving to the system.
    We have also used, tried to parallel the existing transfer 
documents that are used in the industry, the fuel industry. In 
each type, relying on existing market structures and relying on 
the existing regulatory structure will help with uncertainty 
while noting that we have the challenges here with the entirely 
new categories of fuel that will have to be incorporated into 
the system.
    So I think it is a combination of outreach, and I think it 
is also a combination of building on the existing regulatory 
structure we already have.
    The Chairman. Thank you, Mr. Meyers. Before calling the 
Ranking Member, I see the Chairman of the full Committee has 
arrived. Does the Chairman have an opening statement? Okay, the 
gentleman from Oklahoma.
    Mr. Lucas. Thank you, Mr. Chairman. Mr. Meyers, meeting the 
new renewable fuels mandate will require a tremendous amount of 
renewable feedstock from a variety of sources. It appears 
unfortunately that the RFS includes some very specific 
restrictions on what agriculture and forest biomass can be used 
to meet the RFS. Do you believe it is possible to meet the 
mandate with the restrictions as they appear to be now?
    Mr. Meyers. Is the question with reference to the immediate 
year or in the future?
    Mr. Lucas. Where you are headed, yes.
    Mr. Meyers. Well, there are going to be challenges, as I 
noted in my opening statement. The cellulosic volumes 
contemplated will be, by the end of the program, over the 
amount of existing corn-based fuel. Cellulosic doesn't exist in 
commercial quantities in the marketplace right now, so 
obviously that is a huge endeavor. The Department of Energy is 
investing in a lot of energy research related to cellulosic, 
but in essence, you have a mandate anticipating the development 
of fuel that is not available in large quantities right now. 
Now, Congress obviously had a plan to incentivize that 
production, but that will be a challenge.
    Additionally, in terms of implementing the bill, there are 
some challenges with the complexity. I think we can meet them, 
but, we will--the other broad challenge--will be incorporating. 
We have gone essentially--jumped up the original schedule from 
2005 to 9 billion this year and 11.1 billion next year. At 
about 15 billion of ethanol, you reach essentially what many 
people call the blend law, which is essentially saturation of 
the E10 ethanol blend to level.
    So beyond that, there are going to be additional responses 
required in the marketplace, either higher blend of fuels like 
E85 or the availability of intermediate blends above E10 if you 
are an ethanol-based system.
    So there are going to be challenges. We have available 
authority to address those challenges in the statute. The 
various waiver mechanisms--in addition to the one that 
Governor--we have a petition from Governor Perry specific to 
cellulosic volumes, for example. So we feel optimistic that we 
can make this system work.
    Mr. Lucas. So I guess my follow-up question would be you 
have looked then at the impact or tried to project or thought 
about the impact that the mandate will have on the particular 
markets, the food segment, the feed segment, and the livestock, 
the fiber segment?
    Mr. Meyers. Yes, a lot of that analysis will be contained 
in the regulatory impact analysis we will do in association 
with developing the proposed regulations. We are looking at a 
number of impacts. The fuel distribution system is one of them 
that we did quite a bit of work on RFS1, and we are continuing 
that over now in the RFS2. But a lot of the economic analysis, 
environmental analysis, public health analysis from air quality 
standpoint, will be associated with the draft regulatory 
impacts assessment and the final regulatory impact assessment 
with the final regulation.
    Mr. Lucas. But the key being that they will be a factor in 
the equation. Thank you, Mr. Chairman.
    The Chairman. The chair thanks the Ranking Member and 
recognizes the Chairman of the full Committee, Mr. Peterson.
    Mr. Peterson. Thank you, Mr. Chairman. Thank you and the 
Ranking Member for holding this hearing. I want to follow up on 
this. You know, in a way, is there any definition that you have 
to do on this language here where there are planted crops and 
crop residue, harvested from agricultural land, whether they 
are cultivated any time prior to enactment? Is there some kind 
of process going on where you are refining that or defining it 
or whatever?
    Mr. Meyers. Yes, we will essentially have to take that 
legislative language and operationalize it to regulatory 
language.
    Mr. Peterson. Where are you in that process? Have you 
started that at all?
    Mr. Meyers. Yes, EISA was passed December 17 or 19 of last 
year, and literally almost immediately afterwards, we started 
working--our office, their office, the Office of Transportation 
and Air Quality in particular has been working in association 
with our legal folks and with the other departments and 
agencies. So we are anticipating to have a proposed rule out 
this fall, which will address those basic type of issues in the 
program.
    Mr. Peterson. Are you consulting with USDA on this?
    Mr. Meyers. Yes, we are. I don't want to say a daily basis, 
but almost a daily basis.
    Mr. Peterson. And the rule is going to be out in September?
    Mr. Meyers. We would hope for September, but need to go 
through an interagency process. So I think our target is 
certainly this fall.
    Mr. Peterson. So there has been no public comment on this 
yet because you haven't put anything out?
    Mr. Meyers. No, there has not been official public 
commentary, which, of course, will occur. But what we have 
done, as we did in RFS1, is do a lot of outreach. We have done 
a lot of informal meetings. We have done a lot of formal 
meetings. I have sat in and talked to different producers 
myself, and my staff has been available for multiple meetings.
    Mr. Peterson. Well, what have you heard?
    Mr. Meyers. I think, like most people looking at the law, 
it took people awhile to start to read it and try and interpret 
it and figure out what it meant for them. That is a natural 
question if you are either a field producer or you are somebody 
who is going to be an obligated party under the bill.
    And once that occurs, people start thinking about how the 
language could be interpreted to take the realities of their 
situation into account. So we have productive discussions. I 
think we have actually learned a lot through this process, but 
it is ongoing. That is all I can say. And the conversations 
will extend past the proposed rule.
    Mr. Peterson. Well, I don't know if I fully understand 
this, but--and maybe I am overreacting. But my assessment of 
this is if this is implemented the way I think it might be 
implemented, in my opinion, cellulosic ethanol will never 
happen in this country.
    It is almost as crazy as what the Europeans are doing where 
they are putting sustainability ahead of anything else in terms 
of developing their biofuels. And having been through the 
ethanol thing for 40 years, I will guarantee you that you will 
make sure this will never happen if you limit this land because 
there is not a market for this stuff. It is a hell of a lot 
harder to do than anybody realizes. The biggest issue with this 
whole cellulosic thing is the biomass, and I don't think people 
understand it.
    And if you put restrictions on this, this isn't going to 
happen. So I want cellulosic to happen, but there are some 
people here with ideologies that are run amuck in my opinion. 
And somebody better get real here if we really want to make 
this happen. I don't know if anybody else has expressed that to 
you, but I will now so----
    Mr. Meyers. Well, I think we have an interest, as anybody 
else does, in having a workable transparent system for this 
fuel standard. I think we are obviously implementing 
legislative language that we need to give full faith to. So 
there are terms that pose challenges in the legislative 
language. I think that is plain. We will do our best to make a 
workable system, but we also have to live within the laws as is 
passed.
    Mr. Peterson. Well, yes. Well, some of us are trying to 
change this. I think this is a big mistake, and if we really 
want to make this happen, we are going to have to sort through 
this somehow or another.
    The Chairman. All right, I thank the Chairman. And 
recognize the gentleman from Iowa, Mr. King.
    Mr. King. Thank you, Mr. Chairman. Mr. Meyers, I appreciate 
your testimony, and just a number of subjects I would run 
across. And want to ask if you have any measure, any sense of 
what has happened to the migration of capital to or away from 
the infrastructure investment for renewable fuels development 
since this ag bill was passed and the blender's credit was cut 
by 6 cents?
    Mr. Meyers. I wouldn't have that specific information, but 
I would be happy to provide it for the record. Obviously we 
have had a period of investment in the renewable fuel industry, 
and priority is in anticipation and after the passage of RFS2. 
But I would be happy to provide it for the record, or we can 
also check with the Department of Agriculture.
    Mr. King. I would ask that you provide that information to 
the Committee and ask you also if you could just simply give us 
your judgment on what the general direction of that flow of 
capital might be. And if you would be prepared to answer that 
now with an internal--just your judgment, your own personal 
judgment today as you look into the impact on investors and see 
what has happened, what would you expect?
    Mr. Meyers. I am a lawyer, not an economist so I would 
probably demure on speculation on that question. Again I 
apologize if I am not prepared to answer it now, but we will 
provide a response for the record.
    Mr. King. Thank you. I am willing to speak on the record on 
what I think is happening. And that is I think capital is 
migrating away from the infrastructure, development of 
renewable fuels, particularly corn-based ethanol. And it may 
well have put the brakes on the future development of the 
industry coupled with high grain prices.
    And I wanted to also make the point, and I am guessing a 
little bit here, because some of this is on the fly, but I have 
talked to people that have paid $7.03 cash for corn for feed. 
We know that the cash market has actually got a little higher 
than that, and we can talk about futures that are well above 
that. But, I also saw cash corn prices down well below a dollar 
under that. And that is going in the right direction for 
stability in these markets.
    And I wanted to raise this caution. I know in your 
testimony, you say that you are monitoring the aftermath of the 
Midwest floods. I encourage you strongly to hold out and wait 
for this August crop report, which will be our first real 
picture of what we are going to be seeing in the fall. So that 
RFS standards can be evaluated in light of what we are likely 
to see come out of the field in the fall rather than the 
speculation that comes in June and July. August is when you 
really know for the first time. You have a pretty good measure 
anyway.
    I wanted to also ask you if you are looking at the 
logistics of cellulosic. One of my concerns is that we have the 
infrastructure for corn-based ethanol. We know how to harvest 
corn and transport that, and so all that infrastructure is in 
place. All we had to do was build a plant and send it, 
sometimes instead of to the elevator, to the ethanol plant.
    The cellulosic is entirely different, and we don't really 
even know what species we will be raising, what group of crop 
species we will be raising, let alone how we might have to have 
new equipment to plant and harvest and transport. And so I just 
think in terms of cellulosic being anything that looks like a 
big bale of hay. And I know there is a lot of air in a load of 
that. It is hard to get much weight in volume, which means our 
loads can't effectively be hauled much of a great distance. 
That entire infrastructure that will have to be built, is that 
considered as well, when you look at the cellulosic future?
    Mr. Meyers. Yes, I think we are looking at issues like 
that. Obviously the corn infrastructure, as you point out, 
developed over time and even with the current ethanol plant, 
most of the feedstock is fairly local, within 30 or 50 miles or 
so of a production plant. So one might presume the same sort of 
structure when you are moving a lot of feedstock will apply to 
cellulosic.
    But whatever crops may be used for cellulosic production, 
whatever the challenges may be, those are issues, some of which 
will be settled by the marketplace. In our analysis, we try to 
look as best we can at the fuel distribution system and 
production, but we are probably constrained by our ability to 
project exactly how the market will respond to a mandate.
    Mr. King. And if I can just quickly ask you on another 
subject, if the EPA were to mandate blenders pumps as a means 
to get past the 10 percent, and you spoke about that blenders 
law, what would be the estimated capital investment there, and 
how would one implement such a thing?
    Mr. Meyers. You mean in terms of the retail distribution of 
the----
    Mr. King. Yes.
    Mr. Meyers. I am not sure, outside of--I will check, and I 
am always hesitant to just speculate. But I think between an 
E10, an E15 and E20, I don't think--there could be some fitting 
issues, but I don't think it is a major transition in terms of 
the retail distribution.
    Mr. King. If I could, perhaps, ask that question more 
specifically in at least and perhaps several of the states, 
there exist blenders pumps where you can dial the percentage of 
blend.
    Mr. Meyers. The--I am sorry. Excuse me.
    Mr. King. Okay.
    Mr. Meyers. Well, the issue for us would be in terms of--
well, there are several issues, potential issues, including 
misfueling vehicles that cannot accommodate the blend above a 
certain level. Right now, essentially in the marketplace, E10 
is a legal fuel, and E85 is a legal fuel. Beyond that, there 
are issues with intermediate blends that we are looking at 
specifically in the State of Minnesota. And Minnesota is doing 
some studies, and DOE is assisting in that effort.
    But we have to think not only of cause, we have to think of 
secondary equipment. We have to think of off-road equipment 
that utilizes the fuel, and a host of issues in terms of 
intermediate blends that need to be looked at from the engine 
components and the fuel system and make sure safety is 
preserved as well as the performance of the vehicle.
    So if you are talking about dial a blend effects--your 
vehicle is able to utilize that--but other equipment in the 
marketplace right now, we have not made that determination.
    Mr. King. Thank you, Mr. Meyers. Thank you, Mr. Chairman. I 
yield back.
    The Chairman. Before the chair goes to Mr. Salazar, I see 
the Ranking Member has arrived and would recognize the Ranking 
Member for any statement he may have.

 STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF VIRGINIA

    Mr. Goodlatte. Thank you, Mr. Chairman. I want to thank you 
for holding today's hearing to review the implementation of the 
Renewable Fuel Standard.
    The Energy Independence and Security Act of 2007 
dramatically increased the RFS to 36 billion by 2022. The 
expanded RFS also creates an unrealistic mandate for 
conventional corn ethanol by prohibiting the use of biomass 
from new crop acres. This restriction will make it difficult, 
if not impossible, for producers to meet the food and fiber 
demands of our consumers while also meeting the mandates set in 
the RFS.
    We also face a major problem in the transition from grain-
based fuels to cellulosic biofuels if EISA is interpreted 
narrowly to restrict the cellulosic feedstocks from forests and 
agriculture lands that can be used to meet the RFS.
    Virginia has been in the business of agriculture for over 
400 years. Much of the uncropped land in the 6th District has 
the potential to grow switchgrass and help meet the demands of 
cellulosic ethanol if and when it becomes commercially 
available. However, the unnecessary land restrictions in the 
RFS will limit potential biomass to be used to meet the 
mandate.
    The Act also discourages the production of cellulosic fuels 
from forests, one of the largest potential sources of 
cellulosic feedstock. Use of forest biomass for biofuels 
creates markets for byproducts of forest improvement projects. 
This can help solve our nation's energy, forest health, and 
wildfire problems and also help forest owners stay on the land.
    Even with the advancement of cellulosic biofuels, the 
expansion of the RFS would still require 15 billion gallons of 
renewable fuel to come from the only current commercially 
available option, grain ethanol. We have seen the impacts of 
using food for fuel now, even before the mandate is reached. 
This year, over 30 percent of the expected U.S. corn crop will 
be used for ethanol production. That amount is expected to rise 
significantly over the next few years.
    Because livestock feed is used to meet our renewable fuel 
initiatives, the livestock sector is facing significantly 
higher feed costs. Corn and soybeans' most valuable market has 
always been, and will continue to be, the livestock producers. 
We must ensure that there are not unintended economic 
distortions to either grain or livestock producers as a result 
of these sectors prospering from other markets.
    Today, we expect the Environmental Protection Agency to 
rule--actually I don't think we do now. They have announced a 
delay on the RFS waiver request sent by Governor Rick Perry of 
Texas. However, that ruling has been delayed until mid-August 
to give the EPA time to gather more information. While I 
understand there are many factors that play into the rising 
price of corn, a temporary reduction in the government-mandated 
RFS is the only factor in our control that would give immediate 
relief to livestock producers and consumers.
    I am interested to hear today's testimony on how the EPA 
will implement the expanded RFS. I am supportive of the 
development of renewable fuels, but more importantly, I am in 
favor of developing a policy that is technology neutral and 
allows the market to develop new sources of renewable energy.
    I hope today's hearing will alleviate some of my concerns 
regarding the implementation of the RFS. I appreciate the 
efforts of the Chairman to hold this hearing, but equally 
importantly, the Chairman of the full Committee to attempt to 
address this issue. And I hope that legislation, which I was 
pleased to cosponsor, offered by Congresswoman Herseth Sandlin, 
The Renewable Biomass Facilitation Act of 2008, which would 
replace the definition of renewable biomass in the Clean Air 
Act and eliminate the crop and forestry restrictions that are 
currently in the RFS. There are things that we can do if we 
work together, and I hope that we have the opportunity to do 
that. Thank you, Mr. Chairman.
    The Chairman. The chair thanks the Ranking Member. The 
gentleman from Colorado has yielded his position to the 
gentlewoman from South Dakota. The gentlewoman is recognized.
    Ms. Herseth Sandlin. Thank you, Mr. Chairman. I thank the 
gentleman from Colorado. Mr. Meyers, thank you for being here. 
I would like to follow up on some of the questions that the 
Chairman of the Subcommittee and of the full Committee posed as 
well as the issue that is addressed in legislation I have 
introduced that the Ranking Member just mentioned.
    And that relates to this very unfortunate provision, in my 
opinion, that was added late in the process of the energy bill 
that we passed in December, which would essentially, in 
defining renewable biomass, eliminate materials harvested on 
national forestland as well as what the Subcommittee Chairman 
mentioned in terms of the definitions for private sources of 
biomass that I think are overly restricted.
    I am going to refer to some of the testimony, the written 
testimony from our next panel, and just ask you to respond to a 
point on the matter of this definition. Ms. Wong's written 
testimony notes that under EESI's interpretation of the 
definition of renewable biomass in the 2007 Energy Bill, 
materials harvested on national forestland would not count 
toward the RFS unless taken from ``the immediate vicinity'' of 
building or other infrastructure in danger of wildfire. She 
believes this definition is ``exceptionally vague and is 
altogether unclear how it would be interpreted.''
    Similarly, Mr. Blazer's written testimony is that the 
current definition of renewable biomass ``creates a 
bureaucratic nightmare that makes any use of woody biomass cost 
prohibitive.'' Do you agree that this definition poses serious 
difficulties in interpretation and implementation?
    Mr. Meyers. Well, I think any new legislative definition 
provides a challenge for the EPA. We have to, under principles 
of interpretation, look at the statute, and we have to, of 
course, look at the legislative history and the context in 
which it was passed.
    Ms. Herseth Sandlin. Well, in your experience----
    Mr. Meyers. Yes.
    Ms. Herseth Sandlin.--does this particular definition pose 
more serious challenges in implementation and interpretation?
    Mr. Meyers. Well, we have a number of terms in the Clean 
Air Act, which I am very familiar with, which are broad terms. 
This is another instance where we have some broad language 
which we are going to have to interpret. You know, we, as an 
implementing agency, really don't have a choice but to do our 
best to try to work with the definition we have.
    Ms. Herseth Sandlin. Do you anticipate problems with 
analyzing the legislative history, given that this language was 
never vetted through this Committee or any other Committee that 
I am aware of, before that legislation, that provision was 
introduced into the legislation?
    Mr. Meyers. Well, if there is no legislative history, that 
is--there is no legislative history.
    Ms. Herseth Sandlin. On another topic, it is Mr. Cassman's 
understanding--he is also testifying on the next panel--that 
EPA is relying on the GREET model, the Greenhouse Gases 
Regulated Emissions and Energies in Transportation model from 
the Argonne National Laboratory for estimating direct effects 
of greenhouse gas emissions of corn ethanol systems. Is that 
correct?
    Mr. Meyers. Yes.
    Ms. Herseth Sandlin. And Mr. Cassman's written testimony 
states that the BESS, the Biofuel Energy Systems Simulator 
model, for measuring greenhouse gas emissions of corn ethanol 
systems is distinguished from the GREET model in that the BESS 
model ``uses more data for crop reduction, biorefinery, energy 
efficiency, and coproduct use.'' Do you agree?
    Mr. Meyers. I will have to get back--I am not as familiar 
with the BESS model.
    Ms. Herseth Sandlin. Well, Mr. Cassman also states that the 
use of the GREET model means corn ethanol will be unable to 
satisfy the 2007 Energy Bill's requirement of 20 percent 
greenhouse gas emissions reductions. Has EPA reached a decision 
on whether or not then it will consider using the BESS model? 
Perhaps your earlier statement indicates that you haven't, 
but----
    Mr. Meyers. No, we haven't. Obviously we are at pre-
proposal stage. So that will be part of what we put forth for 
public comment. We have had the GREET model for a number of 
years and worked with DOE to improve that model. The issue is 
the legislative definition. With regard to the 20 percent, 
there is a provision that allows for that to be lowered on 
certain findings.
    Ms. Herseth Sandlin. Okay. Well, I would appreciate if you 
could get back to us with further information on your views on 
the BESS model----
    Mr. Meyers. Sure. Be glad to do that.
    Ms. Herseth Sandlin.--compared to the GREET model, as Mr. 
Cassman goes into that analysis. I know you may or may not have 
had a chance to review some of their written testimony ahead of 
time. I did want to bring that to your attention because it is 
very important to use the model that uses the most up-to-date 
information, particularly given the technological advancements 
in many corn ethanol plants, they are improving efficiency 
dramatically.
    Thank you, Mr. Chairman.
    The Chairman. The chair thanks the gentlewoman and 
recognizes the gentleman from Ohio, Mr. Space.
    Mr. Space. Thank you, Mr. Chairman. I was hoping you might 
help me understand something, Mr. Meyers. The Energy 
Independence and Security Act--I agree with my colleague from 
South Dakota--contains some unfortunate definitional elements.
    One of the provisions provides that the EISA restricts use 
of lands on which to produce renewable biomass to lands that 
have been cleared or cultivated prior to December 19, 2007. 
What is the rationale for, as you understand it, for imposing 
that restriction or limitation?
    Mr. Meyers. Well, as referenced earlier, there is probably 
a lack of legislative history with regard to provisions, so I 
am hesitant to speculate. But I think that the issues with land 
use have involved essentially clearing of land not previously 
used and harvesting of stored carbon, and that there have been 
some studies to indicate that that has a fairly sizable 
negative GHG effect.
    Mr. Space. Thank you.
    The Chairman. Any follow-up questions for Mr. Meyers? Well, 
I would just ask the Department then if they had any comments 
about the implementation process? Are they satisfied or have 
any suggestions? If anyone from the Department would--Mr. 
Meyers, I said, that the cooperation between EPA and the 
Department, I am sure there is substantial cooperation. I am 
just curious if the department had any comment they would like 
to make.
    Mr. Hagy. Yes, my name is Bill Hagy. I am the Deputy 
Administrator for Business Programs in Rural Development.
    The Chairman. Can you state your name again, sir.
    Mr. Hagy. Yes, Bill Hagy. I am the Deputy Administrator for 
Business Programs in Rural Development. We have started some 
dialogue with the fellow departments with regards to 
implementation of the farm bill. I think you are aware that 
there is a biomass board that meets. It is made up of all the 
Federal departments and Federal agencies, and there has been 
some dialogue within that board also on some of these issues. 
So they are beginning to be addressed in comparing the farm 
bill to EISA and how the two bills can work together.
    The Chairman. So you are very much aware of the problem 
that the Chairman of the full Committee and the Ranking Member 
addressed in their comments about how we are very concerned 
that there is going to be difficulty in having equity and 
participation, right?
    Mr. Meyers. Those concerns have been raised, and they are 
being considered within the Department and working with our 
fellow departments.
    The Chairman. Okay, well we need your help on this. So 
please stay in touch.
    Mr. Meyers. Thank you.
    The Chairman. Mr. Meyers, thank you very much for your 
testimony and your answering of the questions.
    Mr. Meyers. Thank you.
    The Chairman. We now call on panel two, and we would like 
to invite to the table Ms. Jetta Wong, Senior Policy Associate, 
Environmental and Energy Study Institute from Washington, D.C. 
Mr. Arthur ``Butch'' Blazer, Forestry Division, New Mexico, 
Energy, Minerals, and Natural Resources Department from Santa 
Fe, New Mexico. Mr. John Burke, Partner, McGuire Woods from 
Richmond, Virginia. Mr. Duane Grant, farmer from Rupert, Idaho. 
Dr. Kenneth Cassman, Director, Nebraska Center for Energy 
Science and Research in Lincoln, Nebraska. And Dr. Mark McDill, 
Associate Professor of Forest Management, Pennsylvania State 
University, University Park, Pennsylvania. Ms. Wong, you may 
begin when you are ready.

     STATEMENT OF JETTA L. WONG, SENIOR POLICY ASSOCIATE, 
            SUSTAINABLE BIOMASS AND ENERGY PROGRAM,
           ENVIRONMENTAL AND ENERGY STUDY INSTITUTE,
                        WASHINGTON, D.C.

    Ms. Wong. Good morning, Mr. Chairman and Members of the 
Subcommittee. Let me begin by thanking you for the opportunity 
to speak here today and represent my organization, the 
Environmental and Energy Study Institute, or EESI.
    We believe that global climate change is the single most 
serious challenge facing the world today. At the same time, the 
price of gasoline has skyrocketed due to a variety of factors, 
including fundamental restrictions in supply. Congress has 
begun to address these challenges in a number of pieces of 
legislation, including the Energy Independence and Security Act 
of 2007 and the Food, Conservation, and Energy Act of 2008. And 
we applaud this Committee's leadership in this area.
    EISA substantially increases the Renewable Fuel Standard, 
calling for the production of 36 billion gallons of renewable 
fuel by 2022 with specific targets for greenhouse gas 
reductions. Within the 36 billion gallon mandate, 21 billion 
gallons must come from advanced biofuels, which means renewable 
fuel other than corn-based ethanol. Additionally, there is a 
carve-out for cellulosic biofuels, which are derived from 
renewable biomass. Unfortunately the definition of renewable 
biomass included in the law deems several feedstocks 
ineligible, including thinning materials and woody residues 
from Federal forests, some woody feedstocks from private 
forests, and a wide array of feedstocks from municipal solid 
wastes.
    As we read this definition, all materials harvested on 
national forests and public land would be excluded with the 
exception of materials removed from the immediate vicinity of 
buildings and infrastructure at risk of wildfire.
    This provision is exceptionally vague and is altogether 
unclear how it would be interpreted. It is unlikely that any 
reasonable interpretation would encompass more than a nominal 
portion of the acres that could benefit from hazardous fuel 
reduction. And none of the biomass that could be removed from 
any other form of restoration or stewardship activity.
    In addition to the public land exclusion, the renewable 
biomass definition has the potential to exclude the majority of 
the biomass that could be made available from private lands. 
The definition allows for the usage of planted trees and tree 
residue from actively managed tree plantation and non-Federal 
land cleared at any time prior to enactment and slash and pre-
commercial thinning that are from non-Federal forestlands. This 
language limits the use of commercial size trees to those 
coming from intensively managed tree plantation and only 
logging residue and pre-commercial thinnings from naturally 
regenerated forests.
    This provision draws an entirely arbitrary distinction 
between trees that are planted and trees that grow from seeds. 
This is a mistaken notion that forests composed of the latter 
must somehow be more wild, pristine, or valuable.
    EESI believes that this definition needs to be reexamined 
for several reasons. First, renewable fuel facilities provide a 
market for low value materials produced through forest 
management practices. Forests have approximately \1/3\ of the 
nation's land area, and much of that acreage is under some kind 
of management activity.
    The DOE USDA billion ton study found over 100 tons of 
logging residue or thinning materials generated as a result of 
hazardous fuel reduction treatments from private and Federal 
lands. This could produce nearly 66 percent of the 16 billion 
gallons of cellulosic fuels mandated by the RFS. And right now, 
gasoline prices would be 35 cents per gallon higher if it were 
not for the renewable fuels produced today.
    Furthermore, abundant sources of woody biomass in the West, 
which is mostly public land, can increase the distribution of 
liquid transportation fuels across the country. This will help 
to meet the large fuel markets in the West, while further 
securing our energy supply. Additionally, some residues from 
municipal solid waste are excluded from the renewable biomass 
definition, yet there are low value feedstock that several 
companies already are researching. Production of these fuels 
from these materials reduces the pressure to develop feedstocks 
on sensitive land.
    Additionally confusing or varying definitions included in 
public law create risk, limit intervention, and ultimately 
reduce the use of feedstocks currently considered a problem.
    A variety of stakeholders overwhelming support using the 
feedstocks that are eligible for the Renewable Fuel Standard. 
In addition to the four letters that I have already submitted 
for the record, I would like to submit a fifth letter from four 
prominent academics. The signatories of this letter have a 
combined 130 plus years of experience dealing with forestry 
issues.
    The letter states, ``the definition of `renewable biomass' 
that was included in the final version law, however, does not 
address sustainability, best management practices, or good 
stewardship of natural resources. What it does do is exclude a 
wide selection of feedstocks based on ownership and broad 
classification of landscapes.''In summary, cellulosic biofuels 
can be produced from a highly diverse array of feedstocks, 
allowing every region of the country to be a potential producer 
of fuel. And we should not let these arbitrary distinctions 
restrict their use or our country's innovation to turn them 
into a renewable fuel.
    I would like to thank the Subcommittee once again for the 
opportunity to speak before you today. Let me also extend my 
gratitude for your part in creating and passing this important 
Renewable Fuel Standard and recognizing its role in addressing 
protection and national security. Thank you.
    [The prepared statement of Ms. Wong follows:]

     Prepared Statement of Jetta L. Wong, Senior Policy Associate, 
Sustainable Biomass and Energy Program, Environmental and Energy Study 
                      Institute, Washington, D.C.
    Good morning, Mr. Chairman and Members of the Subcommittee, let me 
begin by thanking you for the opportunity to speak here today and 
represent my organization, the Environmental and Energy Study 
Institute. EESI is an independent nonprofit organization founded by a 
bipartisan Congressional caucus in 1984 to provide policymakers with 
reliable information on energy and environmental issues, to help 
develop consensus among a broad base of constituencies, and to work for 
innovative policy solutions. Our Board is interdisciplinary and is 
drawn from academia as well as the public and private sectors, 
including Dr. Rosina Bierbaum, Dean, School of Natural Resources and 
the Environment, University of Michigan, and Ambassador Richard 
Benedick, who was a lead U.S. negotiator of the Montreal Protocol. Our 
Board is chaired by Richard L. Ottinger of New York, a former chair of 
the House Energy & Power Subcommittee and the Dean Emeritus of Pace 
University Law School.
Summary
    While skepticism about the reality of climate change has waned in 
light of overwhelming evidence, agreement on the policies, preferred 
technologies, and time frame for taking action are still very much in 
debate, and no clear consensus has yet emerged. Climate change and 
energy consumption have climbed to the top of the national policy 
agenda. Congress has addressed climate change in a number of pieces of 
energy legislation, including the Energy Independence and Security Act 
of 2007 (P.L. 110-140) and the Food, Conservation, and Energy Act of 
2008 (P.L. 110-234), and we applaud this Committee's leadership in this 
area. In addition, ``green'' technology has become an important 
economic driver. Multinational corporations and many others in the 
private sector, including many energy companies, have emerged as 
interested players in renewable energy and energy efficiency (RE/EE) 
technologies, seen as a way to combat climate change and improve their 
bottom lines. Biomass-to-energy technologies such as biofuels have been 
recognized by the Federal Government and many state governments, 
corporations and investors as a renewable energy technology that is a 
critical component of a climate change mitigation strategy.
    At the same time the price of fossil fuels has skyrocketed due to a 
variety of factors, including fundamental restrictions in supply as 
development worldwide continues to fuel demand. Our nation's dependence 
on imported foreign oil poses a significant economic, energy, and 
national security challenge. In 2007, the transportation sector was 96 
percent dependent on petroleum and consumed 70 percent of total U.S. 
petroleum demand,\1\ of which roughly 60 percent was imported.\2\ Such 
a reliance on foreign oil increases the vulnerability of the United 
States to higher oil prices and oil price shocks due to events such as 
natural disasters, terrorist attacks, and wars; undermines our ability 
to conduct foreign policy; and places us at the will of a small group 
of oil producing states that can use their market power to influence 
world oil prices.\3\ There are many ``hidden costs'' or externalities 
associated with the consumption of imported oil including direct and 
indirect costs, oil supply disruption impacts, and military 
expenditures.\4\ According to the Government Accountability Office, the 
United States has subsidized the oil industry by more than $130 billion 
in the past 32 years.\5\
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    \1\ U.S. Energy Information Administration. Annual Energy Review. 
``U.S. Primary Energy Consumption by Source and Sector, 2007.'' June 
23, 2008.
    \2\ U.S. Energy Information Administration. Monthly Energy Review. 
``Table 3.3a Petroleum Trade Overview.'' June 25, 2008. 43.
    \3\ Greene, David L., and Sanjana Ahmad. ``Costs of U.S. Oil 
Dependence: 2005 Update.'' Oak Ridge National Laboratory. Paper 
prepared for U.S. Department of Energy. February 2005. xi.
    \4\ Copulos, Milton, President of National Resource Defense Council 
Foundation. ``The Hidden Cost of Oil.'' Testimony before the U.S. 
Senate Foreign Relations Committee. March 30, 2006. 1, 3.
    \5\ U.S. Government Accountability Office. ``Petroleum and Ethanol 
Fuels: Tax Incentives and Related GAO Work.'' GAO/RCED-00-301R. 
September 25, 2000.
---------------------------------------------------------------------------
    On December 19, 2007 the President and Congress took a huge step 
forward in trying to mitigate climate change and reduce our country's 
reliance on fossil fuels by enacting the Energy Independence and 
Security Act (EISA, P.L. 110-140). EISA substantially increases the 
Renewable Fuel Standard (RFS), calling for the production by 2022 of 36 
billion gallons of renewable fuel with specific targets for greenhouse 
gas reductions. Within the 36 billion gallon mandate, 21 billion 
gallons must come from advanced biofuels, which means renewable fuel 
other than ethanol derived from corn starch. Additionally, there is a 
carve-out within the advanced fuels mandate that 16 billion gallons of 
cellulosic biofuel be derived from `renewable biomass.' This is an 
aggressive and ambitious RFS. It is laudable, but it stirs up a lot of 
difficult issues regarding the sustainability of biofuels. One of the 
biggest factors in determining if a biofuel is sustainable is the 
choice of feedstocks used to produce the renewable fuel. Unfortunately, 
the definition of `renewable biomass' included in the law deems several 
feedstocks ineligible, including thinning materials and woody residues 
from Federal forests, some woody feedstocks from private forests, and a 
wide array of feedstocks from municipal solid waste.
    Key Points:

   Renewable fuels are important to our climate and energy 
        security strategy. They are reducing our dependence on foreign 
        oil, reducing the cost of gasoline at the pump, and if produced 
        sustainably, reducing greenhouse gas emissions.

   Renewable fuel facilities provide a market for low-value 
        material produced through forest management practices.

   Abundant sources of woody biomass in the West can increase 
        the distribution of liquid transportation fuels across the 
        country. This will help to meet the large fuel markets of the 
        West while further securing our energy supply.

   Mill residue and other woody materials create complications 
        (in terms of collection) and should be carefully considered 
        during implementation.

   Municipal solid waste is a low-value feedstock that several 
        companies are investigating. Confusing or varying definitions 
        included in public law create risk, limit innovation, and 
        ultimately reduce the use of a feedstock currently considered a 
        problem.

   Production of renewable fuels from low-value materials, such 
        as woody biomass and municipal solid waste, reduces the 
        pressure to develop feedstocks on sensitive land.

   A variety of stakeholders overwhelmingly support a 
        broadening of feedstocks that could be eligible for the RFS. 
        Specifically, low-value woody biomass sustainably harvested 
        from both Federal and private lands should be included.

    Cellulosic biofuels can be produced from a highly diverse array of 
feedstocks, allowing every region of the country to be a potential 
producer of this fuel. (Cellulose is found in all plant matter.) As a 
result, support for cellulosic biofuels has brought together a broad 
array of constituents including environmentalists, farmers, national 
security experts, industry, and religious leaders. Unquestionably, the 
production of renewable fuels needs to be done in a way that sequesters 
carbon and enhances natural resources, including soils, water supply 
and native habitats. Production of renewable feedstocks should not be 
deemed to be in competition with the goals of sustainable agriculture 
or forestry. In fact, there are opportunities for renewable fuel and 
energy production to aid conservation efforts and environmental 
sustainability beyond those associated conventional agriculture, 
forestry or fossil fuel production and consumption.
Renewable Fuels: Part of Our Climate and Energy Security Strategy
    EESI believes that the rapidly escalating pace of global climate 
change is the single most serious challenge facing the world today. 
According to the Fourth Assessment Report of the Intergovernmental 
Panel on Climate Change (IPCC),\6\ the increase in concentration of 
greenhouse gases since the pre-industrial era is due primarily to human 
activities, especially the widespread combustion of fossil fuels. The 
report specifically concludes that the ``global net effect of human 
activities since 1750 has been one of warming''. Evidence of existing 
climate change impacts is staggering, and alarming new ramifications of 
global warming are reported weekly. Among many such reports, scientists 
from the National Geographic Institute reported on June 20, 2008 that 
the Arctic Ocean may be ice-free this summer for the first time in 
recorded history.\7\ Energy efficiency and renewable energy, 
specifically bioenergy, are important energy sources that can help 
mitigate phenomena such as this.
---------------------------------------------------------------------------
    \6\ IPCC, 2007: Summary for Policymakers. In: Climate Change 2007: 
The Physical Science Basis. Contribution of Working Group 1 to the 
Fourth Assessment Report of the Intergovernmental Panel on Climate 
Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. 
Averyt, M. Tignor and H.L. Miller (eds.)]. Cambridge University Press, 
Cambridge, United Kingdom and New York, NY, USA.
    \7\ Mehta, Aolok. ``North Pole May Be Ice-Free for First Time This 
Summer'' June 20 2008 National Geography News.
---------------------------------------------------------------------------
    Renewable fuels are one of many important tools in the effort to 
reduce our national greenhouse gas emissions from the transportation 
sector. According to the U.S. Environmental Protection Agency's 
inventory of greenhouse gas emissions,\8\ the U.S. emitted a total of 
7,260.4 Tg CO2-eq/yr in 2005, which was an increase of 16.3 
percent compared to 1990. Twenty-three percent of these emissions 
(1669.9 Tg COCO2-eq/yr) were from petroleum-based 
transportation fuels. Renewable fuels are especially attractive as a 
low- or no-carbon alternative to petroleum-based fuels such as gasoline 
and diesel. The technology is sustainable, rapid to implement, and 
available across the entire United States.
---------------------------------------------------------------------------
    \8\ U.S. Environmental Protection Agency. Inventory of U.S. 
Greenhouse Gas Emissions and Sinks: 1990-2005. 15 April 2007.
---------------------------------------------------------------------------
    The United States has the resources necessary to provide for our 
energy needs, and renewable fuels can and will play a vital role as 
part of a larger strategy to diversify our energy supplies. A June 2008 
report released by Merrill Lynch concluded that biofuels are the single 
largest contributor to global oil supply growth in light of the 
inability of non-OPEC crude oil supply to expand. ``According to the 
International Energy Agency, `biofuels have become a substantial part 
of faltering non-OPEC supply growth, contributing around 50 percent of 
incremental supply in the 2008-2013 period.' '' \9\ The use of 
domestically produced renewable fuels extends fuel supply by displacing 
the amount of foreign crude oil the United States needs to import.
---------------------------------------------------------------------------
    \9\ Renewable Fuels Association, Canadian Renewable Fuels 
Association, European Bioethanol Fuel Association, and UNICA. Financial 
Times. ``OPEC Rakes in Billions, but Blames Bio-
fuels . . . Confused?'' July 16, 2008.
---------------------------------------------------------------------------
    According to the U.S. Energy Information Administration's 2008 
International Energy Outlook, global energy consumption of liquids and 
other petroleum will grow from 83.6 million barrels of oil per day in 
2005 to 112.5 million barrels of oil per day by 2030. The 
transportation sector will account for 74 percent of that increased 
demand, mostly from non-OECD nations. Additionally, world oil prices 
are expected to be in the range of $113 to $186 per barrel in nominal 
terms in 2030.\10\ Concern about a potential shortfall of supplies and 
high prices is intensified by the possibility of supply disruptions due 
to the instability of four of the top six sources of U.S. oil imports 
from the countries of Saudi Arabia, Venezuela, Nigeria, and Iraq.\11\ 
Furthermore, \2/3\ of the world's known oil reserves lie in the 
volatile Middle East,\12\ while the United States contains less than 
three percent of the world's oil reserves but consumes \1/4\ of the 
world's oil.\13\
---------------------------------------------------------------------------
    \10\ U.S. Energy Information Administration. ``International Energy 
Outlook 2008.'' June 2008, 2, 5.
    \11\ Copulos 2006. 2-3.
    \12\ Renewable Fuels Association. ``Ethanol Facts: Energy 
Security.''
    \13\ Cooper, Mark. ``No Time to Waste: America's Energy Situation 
is Dangerous but Congress can adopt new policies to secure our 
future.'' Consumer Federation of America. October 2007. 2.
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Forests a Valuable Resource
    Forests cover approximately \1/3\ of the nation's land area and 
much of that acreage is under some kind of forest management directive, 
whether that is timber management, habitat improvements, hazardous fuel 
reduction, or one of the many forms of stand improvement thinning 
activities. A number of NGOs support the use of sustainable woody 
biomass to produce renewable fuels. The Oregon Environmental Council 
said this in its 2005 Fueling Oregon with Sustainable Biofuels report,

        ``. . . if renewable fuels are produced sustainably, they can 
        generate substantial reductions in greenhouse gas emissions and 
        improvements in air and water quality . . . Thinning and 
        removal of biomass from these forests [at risk from fire] would 
        improve forest and provide a substantial supply of biomass for 
        energy production. While there are clear environmental benefits 
        to greater utilization of forest biomass, there are also real 
        sustainability concerns.'' \14\
---------------------------------------------------------------------------
    \14\ Gilman, Dan. Fueling Oregon with Sustainable Biofuels. Oregon 
Environmental Council. October 2005.

    Unfortunately, the majority of forest-derived feedstocks are 
rendered ineligible for the RFS because of the narrow definition of 
renewable biomass included in the law. As we read this definition, all 
materials harvested on national forests and public lands would be 
excluded (P.L. 110-140, Title II, Sec. 201[I]), with the exception of 
materials removed from the ``immediate vicinity'' of buildings and 
infrastructure at risk from wildfire (P.L. 110-140, Title II, Sec. 
201[I][v]). This provision is exceptionally vague and it is altogether 
unclear how it will be interpreted. It is unlikely, however, that any 
reasonable interpretation would encompass more than a nominal portion 
of the acres that could benefit from hazardous fuels reduction and none 
of the biomass that could be removed from any other form of restoration 
or stewardship activity, including habitat improvements, recreation 
management, or timber stand improvement.
    In addition to the public land exclusion, the `renewable biomass' 
definition has the potential to exclude the majority of the biomass 
that could be made available from private lands. The definition allows 
for the usage of ``planted trees and tree residue from actively managed 
tree plantations on non-Federal land cleared at any time prior to 
enactment . . .'' and ``slash and pre-commercial thinning that are from 
non-Federal forestlands . . .'' (P.L. 110-140, Title II, Sec. 
201[I][ii], [iv]) This language limits the use of commercial-size trees 
to those coming from intensively managed tree plantations and allows 
only logging residues and pre-commercial thinning from naturally-
regenerated forests. This provision draws an entirely arbitrary 
distinction between trees that are planted and trees that grew from 
seed in the mistaken notion that a forest composed of the latter must 
somehow be more wild, pristine, or valuable. This is not true. There 
are ample examples of well-managed, biodiverse plantations and plenty 
of poorly treated, cut-over and eroded ``natural'' forests. The reverse 
is also true. The entire package of management practices, of which a 
regeneration system is one component, must be used to determine what is 
and is not sustainable on a given landscape.
Renewable Fuels Market: Important for Materials from Stand Improvement 
        Activities
    Stand improvement activities, specifically thinning of small-
diameter trees, can be a valuable tool for managing forests for many 
other values and objectives. Thinning can result in improved tree 
vigor, increased drought tolerance, and increased growth by decreasing 
the stand density and reducing competition between trees for sunlight, 
water, and nutrients. Because vigorous fast-growing trees are generally 
more proof against pests, thinning can be a successful means to reduce 
the extent and lethality of insect infestations in many forest systems. 
In addition, harvesting of small-diameter trees can be an important 
component of habitat management for wildlife species that require early 
successional habitat or low stand density. Finally, forest thinning and 
other silvicultural activities can have positive effects on watershed 
functioning, and specifically water yield,\15\ one of the most 
essential ecosystem services from Federal forests in much of the 
western United States.
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    \15\ Stednick, J.D. 1996. Monitoring the effects of timber harvest 
on annual water yield. Journal of Hydrology 176: 79-95.
---------------------------------------------------------------------------
    What trees should be removed during a restoration treatment is a 
question that differs dramatically depending on the forest type, 
location, stand conditions, and restoration objectives. Forest 
restoration in forests where stand conditions (whether fire regimes, 
habitat elements, or ecosystem functioning) have radically departed 
from the past often requires vegetation management across a wide 
spectrum of tree species, ages, and sizes--not only the removal of 
``slash and pre-commercial thinnings''. The differences between forests 
require management to be determined on the ground, but prescribed in 
detail at the national level. This is the reason that detailed, site-
specific management plans are mandated for all public forests. In a 
study by the Pinchot Institute for Conservation,\16\ management at five 
national forests was evaluated against the standards adopted by the 
Forest Stewardship Council (FSC) and Sustainable Forestry Initiative 
(SFI), the two largest forest certification programs in the United 
States. The study found that management practices on these forests met 
or exceeded the majority of the substantive sustainability criteria in 
both certification schemes. One area where the Forest Service was not 
in conformance was in addressing management activities:
---------------------------------------------------------------------------
    \16\ Sample, A.V., W. Price, J.S. Donnay, and C. Mater. October 22, 
2007. National Forest Certification Study: An evaluation of the 
applicability of Forest Stewardship Council (FSC) and Sustainable 
Forest Initiative (SFI) standards on five national forests. Pinchot 
Institute for Conservation. p. 83.

        ``Consistent delays or backlogs in meeting treatment objectives 
        led [FSC and SFI] auditors to find most case study forests 
        falling short of their stated economic, ecological, and social 
        goals. FSC and SFI auditors suggested the backlog in harvest 
        treatments and persistent lack of funding has exposed forests 
        to increased risk of disease, insect outbreaks, stand-replacing 
        wildfires, and in some cases, being unable to provide key 
---------------------------------------------------------------------------
        habitat features for certain endangered species.''

    Unfortunately, as we described earlier, this material, like all 
material from Federal land, is excluded from the definition. Although 
the Forest Service is not currently looking into certification, these 
independent evaluations demonstrate that the level of stewardship on 
public forests is comparable to private forests that have achieved FSC 
and SFI certification. For more information on stand improvements 
please see the two attached factsheets on public and private forests.
    Pre-commercial thinning, habitat restoration, hazardous fuels 
reduction, and other stand improvement activities are expensive 
operations, however, and feasibility is often limited by the lack of 
widespread markets for small-diameter trees and woody biomass. 
Transportation costs and low market value for this material limit its 
removal, so the majority of materials are chipped in the field or 
burned in open piles. These open fires are still generating renewable 
energy, but it is energy that is being wasted instead of being put to 
productive work in vehicle engines. Without a financial outlet, forest 
and woodlot owners (private or public) can rarely afford to invest in 
thinning or other stand improvement activities.
    Moreover, we frequently hear the argument that public costs would 
be less (on a per acre basis) if funds were allocated for proactive 
fuels reduction as opposed to reactive fire fighting. In the long run 
this is probably true, but the transition in strategies will not be an 
immediate one and catastrophic fires will continue to be a major 
element of the landscape in the near future. After the expenditures 
associated with fighting the fires that are burning today, not much is 
left to begin restoring the vast acreage at risk of burning tomorrow. 
It is going to be a slow process. In the meanwhile we need to find a 
commercial outlet for thinning materials if we hope to deal with an 
issue of this scale and size. Lignol Energy Corporation, a Canadian 
based company, is planning to construct a demonstration scale facility 
in Commerce City, Colorado, which may be just the commercial outlet 
needed. It is expected that this facility will utilize woody biomass as 
one of its primary feedstocks to produce about 2.5 million gallons of 
renewable fuel annually. In June of 2007 Ross MacLachlan, President and 
CEO of Lignol, said this in reference to trial tests to convert 
Mountain Pine Beetle damaged softwood and other wood species to 
cellulosic ethanol,

        ``These results in converting Mountain Pine Beetle damaged 
        softwoods to cellulosic ethanol confirm our view that this 
        abundant feedstock currently found in British Columbia, Alberta 
        and the Pacific Northwest of the United States represents a 
        significant untapped potential for transportation fuels.'' \17\
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    \17\ Lignol Energy Corporation. Lignol Receives Additional Funding 
from Ethanol BC and Announces Successful Trial Results for Mountain 
Pine Beetle Damaged Softwood and Other Wood Species. http://
www.lignol.ca/news.html. (accessed July 21, 2008).

    Thus, national efforts to promote production and use of cellulosic 
biofuels, such as the RFS, have tremendous potential to act as an 
important incentive for improved management practices and better 
stewardship of forest resources . . . if only the material qualified.
Forests Biomass: Readily Available and Abundant
    In order to ensure that feedstock production is pursued 
sustainably, a national biomass assessment needs to be funded and 
carried out. The ``billion ton study'',\18\ a joint report issued by 
the U.S. Department of Energy (DOE) and USDA, was done to determine if 
``a 30 percent replacement of the current U.S. petroleum consumption 
with biofuels by 2030'' could be accomplished. Although this is a 
controversial document and many of its conclusions are disputed, it 
nonetheless provides the most rigorous national estimate to date. The 
``billion ton study'' found that approximately 2.9295 billion tons of 
woody biomass could be obtained from public lands in the form of 
logging residue or thinning materials generated as a result of 
hazardous fuel reduction treatments annually. Most of this material is 
currently inaccessible due to topography, lack of infrastructure, or 
cost of removal. However, an estimated 21.5 million tons would be 
available using existing roads and infrastructure. The same study 
estimates that privately-owned forests have the potential to generate 
5.5531 billion dry of woody biomass, of which 78.9 million tons is 
currently accessible. In total, 100.4 million tons of woody biomass is 
currently available from private and Federal lands. 
---------------------------------------------------------------------------
    \18\ Oak Ridge National Laboratory (DOE) and USDA. DOE GO-102995-
2135, Biomass as Feedstock for a Bioenergy and Bioproducts Industry: 
Feasibility of a Billion-Ton Annual Supply. April 2005.
---------------------------------------------------------------------------
    Converting this woody biomass to cellulosic ethanol could produce 
between 5.5 and 6.5 billion gallons of cellulosic ethanol using current 
technologies.\19\ Ethanol is not the only biofuel option, however, nor 
is it necessarily the most efficient one. In a recent press 
release,\20\ Syntec Biofuel announced yields of 105 gallons per ton for 
a number of higher alcohols, such as methanol, n-butanol, and n-
propanol. When yields of this scale become commercially feasible, our 
public and private forests could produce almost 10.5 billion gallons of 
renewable fuels \21\--nearly 66 percent of the 16 billion gallons of 
cellulosic fuels mandated by the RFS. These fuel estimates are not 
meant to be conclusive, but to illustrate that the potential fuel yield 
from Federal forests is significant and depends strongly on what 
assumptions are made about resource availability, technological 
advances, and conversion efficiency. Unfortunately, almost none of this 
material falls under the current definition of renewable biomass. 
Federal forests are excluded in totality and only a minority of private 
forests can be classified as ``actively managed tree plantations''.
---------------------------------------------------------------------------
    \19\ Oak Ridge National Laboratory (DOE) and USDA. DOE GO-102995-
2135, Biomass as Feedstock for a Bioenergy and Bioproducts Industry: 
Feasibility of a Billion-Ton Annual Supply. April 2005. Tables A.1-A.7.

      Zerbe, John I. Liquid fuels from wood--ethanol, methanol, diesel. 
World Resource Review
     3(4):406-414.

      100.4 million tons * 55 gpt (dilute acid hydrolysis) = 5522 
million gallons.

      100.4 million tons * an average of 65 gpt (pretreatment + 
enzymes) = 6526 million gallons.
      
    \20\ Syntec Biofuels ``Syntec Biofuel Achieves Yield of 105 Gallons 
per Ton of Biomass'' 8 February 2008.
    \21\ 100.4 million tons * 105 gpt = 10542 million gallons.
---------------------------------------------------------------------------
    Additionally, Federal forests are not evenly distributed across the 
nation. In total, they encompass about 43 percent of the national 
forest resource or approximately 323 million acres.\22\ The Western 
Governors' Association report identifies 23 million acres in 12 states 
that are at high risk from wildfire. Thinning materials from this 
acreage could provide up to 318 million tons of biomass,\23\ of which 
7.2--14.5 million tons annually is immediately accessible and available 
for fuel production. This number only includes thinning for fuel 
reduction, which is one source of biomass feedstock among many others 
already mentioned. Using the Syntec technology this could yield 750 
million--1.5 billion gallons.\24\ These are some of the regions that 
are most threatened by catastrophic wildfire and are most in need of 
hazardous fuels reduction treatments. In counties and communities 
entirely surrounded by Federal feedstocks, the entire local supply of 
woody biomass may be off limits. This could have drastic effects where 
it is possible to produce renewable fuels, favoring eastern states over 
western ones. When energy security is considered this imbalance in 
eligible feedstocks becomes even more illogical. During Hurricane 
Katrina in 2005, 25 percent of the country's oil refining capacity was 
off line initially. Since then the merits of distributed power as well 
as fuel production have been discussed as a national security issue. In 
2006, 1.4175 billion barrels of petroleum were consumed in the 12 
states that were included in the Western Governors' Association 
thinning assessment. If the 750 million--1.5 billion gallons are used 
within those states, 18-39 percent of the demand could be supplied.\25\
---------------------------------------------------------------------------
    \22\ Mila Alvarez. ``The State of America's Forests.'' Society of 
American Foresters: 2007.
    \23\ Biomass Task Force Report, Clean and Diversified Energy 
Initiative, WGA, January 2006, p. 37.
    \24\ 7.2 and 14.5 million tons * 105 gpt = 756-1,522.5 million 
gallons.
    \25\ Table F9a: ``Total Petroleum Consumption Estimates by Sector, 
2006.'' Energy Information Administration. http://www.eia.doe.gov/emeu/
states/sep_fuel/html/fuel_use_pa.html (accessed July 21, 2008).
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Mill Residue and Other Woody Materials: Implications of Exclusions
    The restrictive nature of the current definition could also 
exclude, in practice, woody biomass from secondary or mixed sources. In 
many locations, residues from sawmills and pulp operations source 
materials from a mixture of Federal, private, plantation, and natural 
`forests'. Mill residues (chips, sawdust, bark, etc.) could represent 
some of the most available, convenient, and economically attractive 
sources of woody biomass, but this material may not be eligible for the 
RFS if separating residue streams proves difficult or prohibitively 
expensive. This problem would also exist in integrated biorefineries 
where a number of additional bio-based products are produced in 
addition to renewable transportation fuels and heat and power. The 
biorefinery is a desirable industrial model, as utilization of waste 
from one process is the feedstock for another. This minimizes waste, 
increases sustainability and greatly increases economic viability. 
These facilities would very likely source from a number of different 
owners.
    Furthermore, these secondary residues can also be one of the most 
low carbon and environmentally friendly sources of woody biomass. 
Because these materials are waste products of existing industries, they 
do not have a direct impact on practices or conditions in the forest. 
Compared to harvesting biomass directly in the woods, the use of 
residues does not increase traffic on forest roads, as material is 
generated at the mill site. Excluding these materials could be a lost 
opportunity.
    In addition to the biomass intentionally removed during forest 
management activities, an important secondary source of material could 
be recovered from debris generated by natural disasters. Hurricanes, 
floods, ice damage, and other natural disasters annually destroy 
significant amounts of urban trees, forest growth, and wooden 
structures on both private and public lands. Very little of this 
material is recovered and put to a productive use. Instead, it is 
landfilled, incinerated, piled and burned in the field or often left in 
the forest (which emits greenhouse gases, including carbon dioxide, 
methane (which is 21 times more powerful than carbon dioxide) and air 
pollutants). Increasing the recovery rate for this material would be 
beneficial for a number of reasons, including emergency clean-up, 
reduction of fire hazard, recovery of economic losses, and as a 
potentially significant feedstock for production of renewable fuels. 
The availability of this material is difficult to predict, as it 
depends largely on chance events. Infrequent, large-scale disasters 
(like Hurricane Katrina, for example) have the potential to contribute 
additional millions of dry tons of woody biomass when they do occur. 
Moreover, since all materials are subject to the appropriate lifecycle 
analysis and some materials are totally excluded from the RFS all 
together an uneven playing field is created, making some materials 
favored over others (because some materials will be more difficult to 
track than others); again creating illogical barriers to available 
feedstocks which are waste materials generally considered a societal 
and environmental problem.
    One illustration of this is the Gulf Coast Energy Inc.'s wood 
waste-to-ethanol pilot-scale facility in Livingston, Alabama. It is 
expected to go online this month and is capable of producing 200,000 
gallons of ethanol and 30,000 gallons of biodiesel annually.\26\ The 
fuel will be sold at a reduced rate to the City of Hoover, Alabama, 
which is already using leftover cooking oil to produce biodiesel at a 
cost of $0.75 per gallon. The city, whose employees have been busy 
collecting enough downed trees, branches, and limbs from storms to 
produce 350,000 gallons of biofuel, is expecting to save at least $1 
per gallon on fuel compared to what it is spending now and is planning 
for its entire fleet of more than 340 vehicles to become self-
sufficient in energy by the end of the year.\27\
---------------------------------------------------------------------------
    \26\ McGraw, Tommy. ``Second in a series about Livingston's new 
ethanol/bio-diesel plant.'' Gulf Coast Energy, Inc.
    \27\ Gulf Coast Energy, Inc. ``In the News.''
---------------------------------------------------------------------------
    Gulf Coast Energy Inc. is also planning to build three commercial-
scale wood waste-to-ethanol facilities in Livingston, Alabama; Mossy 
Head, Florida, and Jasper, Tennessee. The company plans to use a 
carbon-neutral, zero-emission process \28\ and take advantage of the 
synergies of ethanol and biodiesel production by combining the 
production of these biofuels into a single facility. The company will 
use the glycerin byproduct from biodiesel production with its biomass 
gasification technology to produce ethanol; the methanol stream created 
during ethanol production will be used during the biodiesel production 
process.\29\ By the end of 2009, Gulf Coast Energy Inc. plans to 
complete Phase I, which entails producing 10 million gallons of 
biodiesel and 35 million gallons of ethanol annually at all three 
commercial-scale facilities. Plants may be expanded after the process 
is proven successful.\30\ The Mossy Head, FL, facility received a $7 
million Florida Farm to Fuel Grant for the company's $62 million 
project.\31\ These are the kind of innovative solutions we are seeking 
to solve our climate and energy problems.
---------------------------------------------------------------------------
    \28\ Reeves, Steve. ``Livingston Plant's Efforts May Yield New 
Energy Source.'' Gulf Coast Energy, Inc. June 19, 2008.
    \29\ Santosus, Melissa. Exec Digital. ``Exploiting Potential in 
Renewable Fuels.'' April 2008. 289-290.
    \30\ Santosus 2008, 290-291.
    \31\ Florida Department of Agriculture and Consumer Services. 
``Farm to Fuel Grants Program Winners.'' January 22, 2008.
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Nonindustrial Private Forest Owners and Encroachment
    By giving preference to plantation forests, the renewable biomass 
definition favors the owners of large, industrial forest plantations 
over the nonindustrial private forest owners (NIPF), who generally do 
not have the capital to use artificial regeneration. NIPFs contain the 
majority of diverse, mixed-species woodlands in the nation. Not only do 
these forests generally boast higher biodiversity than plantations, but 
the periodic income from selective harvesting on these properties is 
often the only thing standing between these forests and the very real 
pressure to sell out to land speculators and real-estate developers.
    According to a report released by the Southern Forest Resource 
Assessment \32\ of the U.S. Department of Agriculture, it is expected 
that approximately 12 million acres of timberland in the Southeast will 
be lost due to urbanization between 1992 and 2020. An additional 19 
million acres is expected to be lost between 2020 and 2040 assuming 
that trends established in the 1990s persist. The loss of timberland is 
expected to be concentrated near urban centers such as Charlotte, 
Raleigh, Atlanta, Nashville, and throughout much of Florida while rural 
areas in Arkansas and Mississippi may gain timberland. The report does 
state that moderate increases in timber prices combined with unchanging 
agricultural returns could offset much of the loss due to urbanization 
by allowing crop and pasture land to be converted to forest uses. On 
the other hand if timber prices remain unchanged, it can be expected 
that a total of 31 million acres of forestland could be lost to 
urbanization by 2040. The renewable fuels market has real potential to 
provide additional value to forests while helping to keep family 
forests off the auction block.
---------------------------------------------------------------------------
    \32\ Wear, D.N., D.R. Carter, and J. Prestemon. ``The U.S. South's 
Timber Sector in 2005: A Prospective Analysis of Recent Change.'' 
Southern Forest Resource Assessment, 2007.
---------------------------------------------------------------------------
    Furthermore, according to estimates made for Range Fuels using data 
from the USDA Forest Service Forest Inventory and Analysis Program 
(FIA),\33\ over 76 percent of forests in 10 southeastern states do not 
qualify as forest plantations. In Georgia and Alabama, two of the 
biggest timber producing states, this definition would exclude 67.6 
percent and 70.9 percent of private forests, respectively. Range Fuels 
Director of Project Development Ron Barmore said this when discussing 
the limitations of the current RFS,
---------------------------------------------------------------------------
    \33\ Range Fuels, unpublished data.

        ``Range Fuels is very concerned about ambiguity in the current 
        definition of Renewable Biomass in the Energy Policy and 
        Security Act that, under some interpretations, could severely 
        limit the potential benefits that can be derived from the 
        advancement of cellulosic ethanol production. The vast majority 
        of commercial timber that is grown and logged for the forest 
        products industry is harvested from naturally regenerated 
        forests.'' \34\
---------------------------------------------------------------------------
    \34\ In an e-mail message to the Jetta Wong on July 22, 2008.

    These percentages are surprisingly high given the enormous 
importance of plantation forestry to the economy and culture of the 
southeastern states. In many other regions, such as New England, the 
acreage of qualifying private forest plantation will be almost non-
existent.
Stakeholder Support for Biomass From Forests
    As more and more acres of forestland are bulldozed to make way for 
suburbia, burned in massive conflagrations, or destroyed by pests, a 
number of environmental organizations are beginning to see the value in 
sustainable, multiple value forest management for helping to ensure the 
perpetuation of diverse, vibrant forest ecosystems and the many values 
they offer--clean water, wildlife habitat, recreational opportunities, 
and diverse forest products, including renewable fuels. The Pinchot 
Institute for Conservation came out with this statement in 2007 
identifying the potential value in renewable energy to make possible a 
better and more sustainable form of forestry,

        ``. . . wood energy could help address several longstanding 
        challenges in sustainable forest management: treating hazardous 
        fuels accumulations to minimize future threat of wildfires, 
        creating economic outlets for small-diameter and low-grade wood 
        to reduce forest degradation, and strengthening community 
        economic development on the basis of sustainable use of local 
        forest resources.'' \35\
---------------------------------------------------------------------------
    \35\ Sample, V. Alaric. Ensuring Forest Sustainability in the 
Development of Wood-based Bioenergy. Pinchot Institute For 
Conservation. 2007. p. 6.

    The problems I have identified in the current definition have 
received similar attention from a number of other groups and 
organizations. The Society of American Foresters and the National 
Association of State Foresters, two of the largest and most well-
respected forestry organizations in the nation, have both written 
letters to Congress expressing their concern about the way in which 
forest materials are treated in the RFS. SAF is the premier national 
organization representing forest science, research, education and the 
forestry profession in the United States and is the largest forestry 
organization in the world. SAF publishes several of the most esteemed 
scholarly publications dedicated to forestry, including both The 
Journal of Forestry and Forest Science. In a letter to the House 
Committee on Energy and Commerce dated February 12, 2008, the president 
---------------------------------------------------------------------------
of SAF, Tom Thompson, wrote,

        ``At a time when considerable legislative and agency efforts 
        are being made to address global climate change, wildfire 
        severity, and renewable energy production, it is regrettable 
        that a definition would be promulgated that would equally 
        obstruct all of these goals. The current definition will 
        interfere with the ability to remove non-merchantable, small-
        diameter trees from our public lands, both as renewable fuels, 
        and as a means for addressing the increasingly devastating 
        wildfires we are experiencing. Any notion of climate change 
        mitigation and adaptation of existing forests to changing 
        environmental conditions will require the maximum in management 
        flexibility for both public and private forests, and hampering 
        that management with an unscientific and ill-conceived 
        renewable biomass definition is unacceptable. Finally, the 
        definition's arbitrary limits on qualifying private forestlands 
        can only exacerbate the land-use conversion pressures faced by 
        our smaller, private working forest landowners.''

    The National Association of State Foresters is a nonprofit 
organization representing the directors of the forest agencies in all 
the states, the U.S. territories, and the District of Columbia. In a 
letter to the same Committee dated February 7, 2008, Kirk Rowdabaugh, 
President of NASF, expressed a similar view, ``Our nation's forests can 
provide a ready supply of feedstock for renewable fuels, and any 
exclusion of woody biomass from the Renewable Fuel Standard would 
hamstring the nation's efforts to reduce our reliance on foreign oil.''
    A number of similar letters have originated from organizations 
other than those dedicated to forestry, including the Western 
Governors' Association and 25x'25, a nonprofit organization encouraging 
25 percent of our nation's energy supply to come from renewable sources 
by 2025. In addition to these, a number of private citizens, 
scientists, and local organizations have written or are in the process 
of writing similar letters, some of which I have submitted with my 
testimony. These letters express the concerns of those who work in our 
woodlands and forests and who understand the failure of the current 
definition to realize the use of forest resources for renewable energy 
in a way that complements sustainable management for critical ecosystem 
services, habitat values, biodiversity, timber resources, and 
recreation.
Municipal Solid Waste
    One potential biofuel feedstock that is not currently included 
within the definition of `renewable biomass' is some portions of 
organic material comprising municipal solid waste (MSW). While the RFS 
includes, ``Biogas (including landfill gas and sewage waste treatment 
gas) produced through the conversion of organic matter from renewable 
biomass,'' (P.L. 110-140, Title II, Sec. 201[A](ii)V) the definition of 
renewable biomass only includes ``separated yard waste or food waste, 
including recycled cooking and trap grease,'' (P.L. 110-140, Title II, 
Sec. 201[I](vii)). It is unclear how this definition will be 
implemented by EPA, specifically because most landfill gas is produced 
from existing landfills where a mixture of organic, inorganic and MSW 
already exists.
    The United States already has an abundant amount of this material. 
EPA estimated in 2006 that 169 million tons of MSW were disposed of 
after recycling, including 96.81 million tons of organic material. 
Although per capita waste generation has been relatively stagnant since 
1990 due to increased recycling rates, overall waste generation has 
risen as the population of the United States has continued to grow. At 
the same time, the number of landfills in the United States has fallen 
from 7,924 landfills in 1988 to 1,754 in 2006 meaning that wastes must 
be transported over farther distances, which consumes more fuel, 
currently fossil based.\36\ Generation of MSW varies regionally with 
the highest concentration located in urban areas. In 2007, New York 
City generated 3.6 million tons of MSW and spent $283.3 million to 
export its waste to landfills outside of the city.\37\ As of 2006, only 
12.5 percent of the MSW generated in the United States before recycling 
was combusted for energy recovery.\38\ The Energy Information 
Administration (EIA) has estimated that the electricity generated from 
MSW totaled 9 million MWh in FY 2007 with an additional 6 million MWh 
generated from landfill gas.\39\
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    \36\ Environmental Protection Agency. ``Municipal Solid Waste 
Generation, Recycling and Disposal in the United States: Facts and 
Figures for 2006.'' Environmental Protection Agency, 2007.
    \37\ Niblack, P. ``More Recycling Needed to Help Lower City's Trash 
Costs.'' New York City Independent Budget Office, 2007.
    \38\ Environmental Protection Agency, 2007.
    \39\ Energy Information Administration. ``Federal Financial 
Interventions and Subsidies in Energy Markets 2007.'' Energy 
Information Administration, 2008.
---------------------------------------------------------------------------
    As these statistics show, there is a significant amount of organic 
material that must be disposed of after recycling. Even though MSW is 
not currently included in the Renewable Fuel Standard, several states 
including Maryland \40\ and New Jersey \41\ currently include it in 
their Renewable Portfolio Standards for energy and Pennsylvania \42\ 
includes MSW as part of its Alternative Energy Portfolio Standard. The 
State of Hawaii currently includes MSW as a potential source of 
renewable energy as part of its Renewable Portfolio Standard and 
includes MSW as a potential feedstock for ethanol production in its 
Ethanol Facility Tax Credit.\43\ Even other Federal policies allow for 
the use of MSW for biofuel production. In the Department of Energy's 
Integrated Biorefinery and Demonstration grant program of the Energy 
Policy Act of 2005 (EPAct 2005, P.L. 109-58), the definition of biomass 
notes ``any waste material that can be converted to energy is 
segregated from other waste materials''. The only explicit exclusion of 
MSW pertains to wood waste materials including paper waste.\44\ 
According to this definition, some organic portions of MSW including 
food waste would be included. This section of the EPAct 2005 is the 
basis for several large grants given to commercial-scale biorefinery 
projects, a series of which were awarded in 2007 including BlueFire 
Ethanol, which plans to use portions of MSW as a potential 
feedstock.\45\ The enactment of the RFS was suppose to be a clear 
signal to investors of the government's commitment to renewable fuels 
as a part of the country's energy and greenhouse gas reduction 
strategies. Unfortunately this restrictive definition and the 
government's mixed signals illustrated in the different definitions of 
biomass may not be the clear signal intended.
---------------------------------------------------------------------------
    \40\ Md. Code, Com. Law  7-701.
    \41\ New Jersey Clean Energy Program. ``Renewable Energy Compliance 
Certification Forms for the State of New Jersey.'' New Jersey.
    \42\ 73 Pa. Cons. Stat.  1648.2.
    \43\ Haw. Rev. Stat.  235-110.3
    \44\ Energy Policy Act of 2005  932(a), 42 U.S.C.  923(a) (2005).
    \45\ Department of Energy. ``DOE Selects Six Cellulosic Ethanol 
Plants for Up to $385 Million in Federal Funding.'' Department of 
Energy. http://www.energy.gov/news/4827.htm (accessed July 16, 2008).
---------------------------------------------------------------------------
    Although waste-to-biofuel conversion technologies are similar to 
other cellulosic feedstock technologies, there are several unique 
challenges to utilizing MSW as a feedstock. One challenge in converting 
MSW to biofuels is pollution control. In any waste stream there will be 
chemicals and substances of concern and although the fuel derived from 
MSW will be clean, other materials may still contain contaminants. It 
must be noted, though, that traditional waste-to-energy generation has 
made significant progress in reducing emissions of pollutants. This is 
largely due to the implementation of scrubbers to remove acids as well 
as filters to remove particulates.\46\ As MSW-to-biofuels technology 
becomes more mature, it can be expected that pollution controls will be 
developed in accordance with appropriate government regulations.
---------------------------------------------------------------------------
    \46\ Environmental Protection Agency. ``Solid Waste Combustion/
Incineration.'' Environmental Protection Agency. http://www.epa.gov/
epaoswer/non-hw/muncpl/landfill/sw_combst.htm (accessed July 8, 2008).
---------------------------------------------------------------------------
    In Lake County, Indiana, there are two municipal solid waste-to-
biofuel facilities that are currently under development. Genahol-
Powers, LLC and Indiana Ethanol Power, Inc. are both in negotiations 
with Lake County officials to obtain waste disposal contracts to 
convert the county's waste into biofuels. It is expected that, if 
constructed, these facilities will process waste not only from Lake 
County, but also from surrounding areas including nearby Chicago. 
Proposed plans for Genahol and Indiana Ethanol Power have a combined 
capacity to produce 110 million gallons of biofuel per year while 
processing waste at the same time. It should be noted that Indiana 
Ethanol Power has received a $100,000 grant from the Indiana Office of 
Energy & Defense Development.\47\ Under current legislation, it is 
unclear whether fuel produced from these facilities would be included 
in the RFS.
---------------------------------------------------------------------------
    \47\ Shaw, Dan. ``Evansville Companies Bid to Make Ethanol from 
Lake County Trash.'' Evansville Courier & Press, June 2, 2008.
---------------------------------------------------------------------------
    Cellulosic biofuel startup Coskata, Inc. is currently planning to 
construct a cellulosic ethanol demonstration facility in Madison, 
Pennsylvania, in coordination with General Motors. It is expected that 
this facility will use a variety of feedstocks such as municipal solid 
waste, woody biomass and steel off gases. In addition, Coskata will 
also use other feedstocks including agricultural wastes which are 
included in the RFS. Coskata's demonstration scale facility is expected 
to produce 40,000 gallons of cellulosic ethanol per year. The company 
is also planning to construct a commercial scale facility in the future 
at the same site producing 50-100 million gallons per year.\48\ Coskata 
is particularly interesting because of their ability to use multiple 
feedstocks. By eliminating certain feedstocks, the government may be 
artificially restricting their decision-making process.
---------------------------------------------------------------------------
    \48\ Coskata, Inc. ``Coskata Inc. Selects Madison, Pa. for 
Commercial Demonstration Facility to Produce Next-Generation Ethanol.'' 
Coskata, Inc. http://www.coskata.com/pagebody/Madisonannouncement.htm 
(accessed July 16, 2008).
---------------------------------------------------------------------------
Utilization of Waste Materials Reduces Stress on Other Feedstocks
    Another possible side effect of these exclusions is that they shift 
the entire burden of production onto non-Federal forests and 
agriculture land, promoting intense production and increasing the odds 
that unsustainable and environmentally-degrading management practices 
may be used. This could lead to soil erosion, reduced productivity, 
compromised habitat, and reductions in water quality. Among these 
issues are some fundamental agriculture issues, including competition 
for land and natural resource protection.
    The competition for land is a complicated issue that stems from the 
perceived differences between growing crops for food, feed, fiber and 
now fuel. Land is the most finite of resources and ultimately the basis 
for all wealth--we rely on it to feed, clothe, and shelter our 
civilization. When land is managed in an unsustainable way, our ability 
to provide these and other basic values is compromised. For every acre 
of land that is eroded or acidified or desertified or otherwise 
degraded, we have one less productive acre that can provide food, 
biofuel feedstocks or ecosystem services. Likewise, inappropriate 
allocation of land for the wrong use can carry negative consequences, 
including adverse impacts to the environment and the economy. 
Fortunately, good stewardship and wise allocation of our precious land 
resources can provide abundant biomass for fuels, food, and diverse, 
healthy ecosystems.
    In this respect, the wisest course of action would be to focus on 
feedstocks that do not compete for land resources, such as low-value 
forest residues and other waste materials. The RFS is a very aggressive 
mandate, but it is not an impossible one, as long as we do not exclude 
any of those feedstocks that can be produced sustainably and that meet 
important environmental and greenhouse gas emissions reductions. With 
conversion technologies still in development, we must keep our options 
open and strive to produce renewable fuels that meet objective and 
appropriate standards of sustainability. Fortunately, our nation 
possesses abundant and readily available feedstocks that satisfy this 
criterion.
Conclusion
    By utilizing the renewable biomass resources from America's farms, 
forests, and open spaces, we have the potential to lower our greenhouse 
gas emissions, increase energy security, and stimulate economic 
development in rural communities. Renewable fuels from biomass 
feedstocks (coupled with increased fuel efficiency, plug-in hybrids, 
and similar technologies) provide the most immediate means to begin 
reducing the emissions associated with liquid transportation fuels. By 
adding value to forests and forest products, the renewable fuels market 
is one tool that can help slow down urban encroachment, improve 
wildlife habitat, reduce the threat of forest fires, and improve timber 
stocks, all while driving local economic development through the 
creation of jobs in rural communities.
    The United States has the resources necessary to provide for our 
energy needs, and renewable fuels can and will play a vital role as 
part of a larger strategy to diversify our energy supplies. A June 2008 
report released by Merrill Lynch concluded that biofuels are the single 
largest contributor to global oil supply growth in light of the 
inability of non-OPEC crude oil supply to expand. ``According to the 
International Energy Agency, `Biofuels have become a substantial part 
of faltering non-OPEC supply growth, contributing around 50 percent of 
incremental supply in the 2008-2013 period.' '' \49\ The use of 
domestically-produced renewable fuels extends fuel supply by displacing 
the amount of foreign crude oil the United States needs to import. On 
June 12, 2008, Alexander Karsner, DOE Assistant Secretary for Energy 
Efficiency and Renewable Energy, testified before the Senate Committee 
on Energy and Natural Resources that gasoline prices would be between 
20 cents to 35 cents per gallon higher if it was not for ethanol 
production and use.\50\ Simply put, the use of renewable fuels eases 
the strain of transportation costs on American consumers. Time is of 
the essence if the United States is to lay groundwork for a sustainable 
future that will mitigate climate change, reduce dependency on foreign 
oil, and reduce costs of transportation fuels.
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    \49\ Renewable Fuels Association, Canadian Renewable Fuels 
Association, European Bioethanol Fuel Association, and UNICA. Financial 
Times. ``OPEC Rakes in Billions, but Blames Bio-
fuels . . . Confused?'' July 16, 2008.
    \50\ Karsner, Alexander. Assistant Secretary for Energy Efficiency 
and Renewable Energy. ``Biofuels and the Food Versus Debate.'' 
Testimony before the U.S. Senate Energy and Natural Resources 
Committee. June 12, 2008.
---------------------------------------------------------------------------
    I would like to thank the Committee once again for the opportunity 
to speak before you. Let me also extend my gratitude for your part in 
creating and passing this important Renewable Fuel Standard and 
recognizing the role it plays in our climate protection and national 
security efforts.
                              Attachments
July 17, 2008
Federal Forests and the Renewable Fuel Standard
    On December 19, 2007, the President signed into law the Energy 
Independence and Security Act of 2007 (EISA). This law (P.L. 110-140) 
includes an increase in the national Renewable Fuel Standard (RFS) 
mandating the production of 36 billion gallons of renewable fuels by 
2022. Within the total mandate, 21 billion gallons must qualify as 
advanced biofuels--fuels made from renewable biomass other than corn 
starch. There are additional carve-outs for biomass-based diesel and 
fuels made from cellulosic feedstocks, such as wood, grasses, and 
agricultural residues. An important component of the RFS is a series of 
greenhouse gas emissions screens, essential safeguards that ensure 
renewable fuels will meet minimum verifiable reductions in greenhouse 
emissions. For renewable fuels (from new facilities) to qualify under 
the RFS, they must achieve at least a 20 percent reduction in direct 
and indirect lifecycle emissions compared to equivalent petroleum 
fuels. Advanced fuels and cellulosic fuels are subject to a 50 percent 
and 60 percent emissions screen, respectively. Because of these 
stringent safeguards and the large quantity of fuel mandated, it is 
paramount that we not rule out potentially important feedstocks without 
valid reasons. The definition of `renewable biomass' included in the 
law, however, does rule out a number of feedstocks, including thinning 
materials and woody residues from Federal forests.
    There are a number of reasons why the inclusion of Federal forests 
in the definition of renewable biomass would be beneficial for the RFS, 
global climate, and our public forests:

    Significant Potential

   U.S. forests cover 755 million acres (Alvarez 2007), of 
        which approximately \1/3\ is managed by Federal agencies. 
        Public forests are concentrated in the western states, 
        especially throughout the Rocky Mountains and Alaska. Slash, 
        unmerchantable trees and other logging residues are regularly 
        generated within these forests as byproducts of stand 
        improvement thinnings and forestry activities intended to 
        promote wildlife habitat, ecosystem functioning, timber 
        production, biodiversity, and recreational opportunities. In 
        addition, biomass is regularly harvested during restorative and 
        preventative treatments to protect against wildfire and insect 
        infestations. According to one assessment, 5.2-7.5 million dry 
        tons of forest biomass could be sustainably generated from 
        hazardous fuel reduction treatments in the western states 
        (Western Governors' Association 2005).

    No Indirect Greenhouse Gas Emissions

   Current estimates of direct lifecycle emissions for 
        cellulosic fuels show reductions in the order of 88-94 percent 
        compared to petroleum fuels (Schmer et al. 2008, Union of 
        Concerned Scientists 2007). However, the emissions requirements 
        in the RFS explicitly include both direct and indirect 
        emissions. Recent publications (Searchinger et al. 2008, 
        Fargione et al. 2008) highlight the potential magnitude of 
        indirect emissions caused through agricultural displacement 
        globally. These emissions occur when production on arable land 
        shifts from food products to biofuel feedstocks. Since global 
        demand for foodstuffs is fairly inelastic, this decrease in 
        supply is met by clearing new lands for agriculture, resulting 
        in greenhouse gas emissions from deforestation, fires, and 
        erosion. To make matters worse, clearing often occurs in 
        rainforests, wetlands, native grasslands, and other imperiled 
        ecosystems. Although indirect emissions could become a major 
        obstacle to producing biofuel feedstock on agricultural land, 
        more research is needed to understand how to fully determine 
        these effects. In the meantime, prudency would suggest that we 
        place greater emphasis on those feedstocks which do not impact 
        the supply of agricultural commodities and therefore will not 
        result in such a chain reaction. This includes waste materials, 
        such as agricultural residues, food processing byproducts, 
        yellow grease, and urban wood waste, and feedstocks produced on 
        non-agricultural land, such as algae and woody biomass from 
        existing forestlands--including the extensive managed areas of 
        our Federal forests.

    Cost-effective Tool for Sustainable Forest Management

   Not only can woody biomass contribute substantially to the 
        production of sustainable biofuels, but biomass utilization can 
        be a valuable tool to help improve stand conditions and 
        facilitate management on those public forests that could 
        benefit from increased thinning of small-diameter and low-
        quality trees. Small-diameter thinning is a major component of 
        hazardous fuels reduction on lands identified as being at risk 
        from catastrophic wildfire. Since 2000, the National Fire Plan 
        has included hazardous fuels reduction as a key element of 
        national fire policy (USDA and DOI 2000). Large, catastrophic 
        fires destroy life and property, threaten communities, reduce 
        air quality, and release huge pulses of greenhouse gases. One 
        study estimates that large, stand-replacing fires can emit over 
        2 tons of carbon per hectare (Finkral and Evans 2007). Where 
        and when appropriate, hazardous fuels reduction can decrease 
        fire intensity, fire frequency, and fire velocity, as well as 
        the likelihood that a fire will evolve into a highly 
        destructive crown fire (Duvenek and Patterson 2007, Agee and 
        Skinner 2005, Brose and Wade 2002, Pollet and Omi 2002, Finney 
        2001, Fule et al. 2001, Stephens 1998, Kalabokidis and Omi 
        1998, Weatherspoon and Skinner 1996). In order to be successful 
        in these objectives and avoid negative environmental impacts, 
        however, hazardous fuel reduction treatments must be carefully 
        tailored to the forest type, historical fire regime, geography, 
        and ecological characteristics of the stand being treated. 
        After thinning, slash and harvest residues should be treated on 
        site or transported out of the forest to avoid increased fire 
        risks among accumulated low fuels (Bolding and Lanford 2001, 
        Kalabokidis and Omi 1998, Stephens 1998). Currently, the 
        majority of thinning materials are chipped, ground or burned on 
        site (U.S. Government Accountability Office 2007). The 
        intentional burning of residues in the field produces many of 
        the same negative impacts as wildfires, including emissions of 
        greenhouse gases and particulate matter (Radke et al. 1981).

   Thinning of small-diameter trees can be a valuable tool in 
        managing Federal forests for other values and objectives in 
        addition to hazardous fuels reduction. Thinning can result in 
        improved tree vigor, increased drought tolerance, and increased 
        growth by decreasing the stand density and reducing competition 
        between trees for sunlight, water, and nutrients (Smith et al. 
        1996). Because vigorous fast-growing trees are generally more 
        proof against pests, thinning can be a successful means to 
        reduce the extent and lethality of insect infestations in many 
        forest systems (Fettig et al. 2007, Romme et al. 2006). In 
        addition, harvesting of small-diameter trees can be an 
        important component of habitat management for wildlife species 
        that require early successional habitat or low stand density 
        (McComb 2007, Gram et al. 2003, Desseker and McAuley 2001, Hume 
        et al. 1999). Finally, forest thinning and other silvicultural 
        activities can have positive effects on watershed functioning, 
        and specifically water yield (Stednick 1996, Troendle 1983), of 
        the most essential ecosystem services from Federal forests in 
        much of the western U.S.

   Stand improvement thinnings focusing on small-diameter trees 
        are expensive operations; Federal budgets are inadequate to 
        treat the vast public acreages that could benefit from this 
        treatment (U.S. Government Accountability Office 2008). Adding 
        costs for residual treatments (chipping, grinding, and burning) 
        only compounds the problem. The feasibility of thinning is 
        limited in many places by the lack of markets for small-
        diameter trees and woody biomass. In the absence of markets, 
        Federal agencies almost certainly cannot afford to thin vast 
        acreages on the public dollar--nor would this necessarily be 
        the wisest and best use of funds. The RFS has the potential to 
        provide necessary markets and bring a higher quality and 
        greater range of management tools within the national budget--
        helping provide solutions to multiple problems.

    Conclusion

    Federal forests have the potential to contribute substantially to 
the production of sustainable biofuels. Furthermore, biomass extraction 
has the potential to become a powerful tool for improving the quality 
of management on our Federal lands. The range of options for management 
of wildlife habitat, forest hydrology, hazardous fuels reduction, and 
pest infestations could be vastly increased if markets for small-
diameter trees were expanded. These markets are not likely to appear, 
however, if Federal forests are excluded from the RFS. A transparent 
and inclusive dialogue among stakeholders, interest groups, and 
policymakers will be a necessary step in amending this law.




References:
Agee, J.K. and C.N. Skinner. 2005.   Radke, L.F., P.V. Hobbs, and J.L.
 Basic principles of forest fuel      Stith. 1981. Particle emissions
 reduction treatments. Forest         and the production of ozone and
 Ecology and Management 211:83-96.    nitrogen oxides from the burning
Alvarez, M. 2007. The State of        of forest slash. Atmospheric
 America's Forests. Bethesda, MD:     Environment 15(1):73-82.
 Society of American Foresters. 68   Romme, W.H., J. Clement, J. Hicke,
 p.                                   D. Kulakowski, L.H. MacDonald,
Bolding, M.C. and B.L. Lanford.       T.L. Schoennagel, and T.T. Veblen.
 2001. Forest fuel reduction          2006. Recent forest insect
 through energy wood production       outbreaks and fire risk in
 using a CTL/small chipper            Colorado forests: a brief
 harvesting system. In: Proc. 24th    synthesis of relevant research.
 Annual Council on Forest             Colorado Forest Restoration
 Engineering Meeting; Showshoe, WV.   Institute, Colorado State
Brose, P. and D. Wade. 2002.          University. 24 p.
 Potential fire behavior in pine     Searchinger, T., R. Heimlich, R.A.
 flatwood forests following three     Houghton, F. Dong, A. Elobeid, J.
 different fuel reduction             Fabiosa, S. Tokgoz, D. Hayes, and
 techniques. Forest Ecology and       T. Yu. 2008. Use of U.S. croplands
 Management 163: 71-84.               for biofuels increases greenhouse
Desseker, D.F. and D.G. McAuley.      gases through emissions from land
 2001. Importance of early            use change. Scienceexpress,
 successional habitat to ruffed       published online 7 February 2008;
 grouse and American woodcock.        10.1126/science/1151861.
 Wildlife Society Bulletin           Schmer, M.R., K.P. Vogel, R.B.
 29(2):456-465.                       Mitchell, and R.K. Perrin. 2008.
Duvenek, M.J. and W.A. Patterson.     Net energy of cellulosic ethanol
 2007. Characterizing canopy fuels    from switchgrass. Proceedings of
 to predict fire behavior in pitch    the National Academy of Sciences.
 pine stands. Northern Journal of     105(2):464-469.
 Applied Forestry 24(1): 65-70(6).   Smith, D.M., B.C. Larson, M.J.
Fargione, J., J. Hill, D. Tilman,     Kelty, and P.M.S. Ashton. The
 S. Polasky, and P. Hawthorne.        Practice of Silviculture: Applied
 2008. Land clearing and the          Forest Ecology. 9th ed. John Wiley
 biofuel carbon debt.                 & Sons, Inc., 1996. 560 p.
 Scienceexpress, published online 7  Stednick, J.D. 1996. Monitoring the
 February 2008; 10.1126/              effects of timber harvest on
 science.1152747.                     annual water yield. Journal of
Fettig, C.J., K.D. Klepzig, R.F.      Hydrology 176: 79-95.
 Billings, A.S. Munson, T.E.         Stephens, S.L. 1998. Evaluation of
 Nebeker, J.F. Negron, and J.T.       the effects of silvicultural and
 Nowak. 2007. The effectiveness of    fuels treatment on potential fire
 vegetation management practices      behavior in Sierra Nevada mixed-
 for prevention and control of bark   conifer forests. Forest Ecology
 beetle infestations in coniferous    and Management. 105:21-35.
 forests of the western or southern  Troendle, C.A. 1983. The potential
 United States. Forest Ecology and    for water yield augmentation from
 Management 238: 24-53.               forest management in the Rocky
Finkral, A.J. and A.M. Evans.2007.    Mountain region. Journal of the
 The effects of a thinning            American Water Resources
 treatment on carbon stocks in a      Association 19(3): 359-373.
 northern Arizona ponderosa pine     U.S. Department of Agriculture and
 forest. Unpublished manuscript. 26   U.S. Department of the Interior.
 p.                                   Managing the Impact of Wildfires
Finney, M.A. 2001. Design of          on Communities and the
 regular landscape fuel treatment     Environment: A Report to the
 patterns for modifying fire growth   President in Response to the
 and behavior. Forest Science         Wildfires of 2000. 8 September
 47(2): 219-228.                      2000.
Fule, P.Z., A.E.M. Waltz, W.W.       U.S. Government Accountability
 Covington, and T.A. Heinlein.        Office. Wildland Fire Management:
 2001. Measuring forest restoration   Better Information and a
 effectiveness in reducing            Systematic Process Could Improve
 hazardous fuels. Journal of          Agencies' Approach to Allocating
 Forestry 99(11):24-29.               Fuel Reduction Funds and Selecting
Gram, W.K., P.A. Porneluzi, R.L.      Projects. GAO-07-1168. September
 Clawson, J. Faaborg, and S.C.        2007. 103 p.
 Richter. 2003. Effects of           U.S. Government Accountability
 experimental forest management on    Office. Wildland Fire Management:
 density and nesting success of       Federal Agencies Lack Key Long-
 bird species in Missouri Ozark       and Short-Term Management
 Forests. Conservation Biology        Strategies for Using Program Funds
 17(5): 1324-1337.                    Effectively. GAO-08-433T. 12
Humes, M.L., J.P. Hayes, and M.W.     February 2008. 14 p.
 Collopy. 1999. Bat activity in      Union of Concerned Scientists.
 thinned, unthinned, and old-growth   Biofuels: An Important Part of a
 forests in western Oregon. The       Low-Carbon Diet. November 2007. 27
 Journal of Wildlife Management       p
 63(2):553-561.                      Western Governors' Association.
Kalabokidis, K.D. and P.N. Omi.       Transportation Fuels for the
 1998. Reduction of fire hazard       Future, Biofuels: Part 1. 8
 through thinning/residue disposal    January 2008. 69 p.
 in the urban interface.             Weatherspoon, C.P. and C.N.
 International Journal of Wildland    Skinner. 1996. Landscape-level
 Fire 8(1): 29-35.                    strategies for forest fuel
McComb, B.C. Wildlife Habitat         management In: Status of the
 Management: Concepts and             Sierra Nevada: Sierra Nevada
 Applications in Forestry. CRC        Ecosystem Project, final report to
 Press, Inc., 2007. 384 p.            Congress. Vol. 11: Assessments and
Pollet, J. and P.N. Omi. 2002.        scientific basis for management
 Effect of thinning and prescribed    options. Wildl. Res. Ctr. Rep. No.
 burning on crown fire severity in    37. Davis, CA: University of
 ponderosa pine forests.              California--Davis, Center for
 International Journal of Wildland    Water and Wildland Resources: 1471-
 Fire 11(1)1-10.                      1492.


                                 ______
                                 
July 17, 2008
Private Forests and the Renewable Fuel Standard
    On December 19, 2007, the President signed into law the Energy 
Independence and Security Act of 2007 (EISA). This law (P.L. 110-140) 
includes an increase in the national Renewable Fuel Standard (RFS) 
mandating the production of 36 billion gallons of renewable fuels by 
2022. Within the mandate, 16 billion gallons must be produced from 
cellulosic feedstocks, such as wood, grasses, and agricultural 
residues. An important component of the RFS is a series of greenhouse 
gas emissions screens, essential safeguards that ensure renewable fuels 
will meet minimum verifiable reductions in greenhouse gas emissions. 
For renewable fuels (from new facilities) to qualify under the RFS, 
they must achieve at least a 20 percent reduction in direct and 
indirect lifecycle emissions compared to equivalent petroleum fuels. 
Cellulosic fuels are subject to a 60 percent emissions screen. Because 
of these stringent safeguards and the large quantity of fuels required, 
it is paramount that we not exclude feedstocks without valid reasons. 
The definition of `renewable biomass' included in the law, however, 
does rule out a number of feedstocks, including some woody biomass from 
private forests.
    The definition includes usage of ``planted trees and tree residue 
from actively managed tree plantations on non-Federal land cleared at 
any time prior to enact-
ment . . .'' and ``slash and pre-commercial thinnings that are from 
non-Federal forestlands . . .'' This language limits the use of 
merchantable trees to those coming from tree plantations. Only logging 
residues and pre-commercial trees can be used from naturally-
regenerated forestlands.
    There are a number of reasons why a broader inclusion of private 
forests in the definition of renewable biomass would be beneficial for 
the RFS, global climate, and our forests:

    Significant Potential

    U.S. forests cover 750 million acres (Alvarez 2007), of which 
approximately 57% are owned by private citizens, families, private 
cooperatives, industry, investment funds, and institutions. The 
majority of these forests rely on natural regeneration for stand 
establishment instead of the artificial regeneration (i.e., planting) 
used in plantation forests. Furthermore, these forests are heavily 
concentrated in the northern and southeastern parts of the country 
(Alvarez 2007), where agricultural feedstocks may not be as available 
as they are in the Midwest and western states.

    No Indirect Greenhouse Gas Emissions

    Emissions restrictions in the RFS explicitly include both direct 
and indirect emissions of greenhouse gases. Current estimates of direct 
lifecycle emissions for cellulosic fuels show reductions in the order 
of 88-94 percent compared to petroleum fuels (Schmer et al. 2008, Union 
of Concerned Scientists 2007). However, recent publications 
(Searchinger et al. 2008, Fargione et al. 2008) highlight the potential 
magnitude of indirect emissions caused through land use change. These 
emissions are associated with the clearing of new farmland to 
compensate for those crops and farmlands that are diverted towards the 
production of biofuels. Although indirect emissions could become a 
major stumbling-block to producing climate-friendly biofuel feedstock 
on agricultural land, more research is needed to understand how to 
fully measure and attribute these effects. In the meantime, prudency 
would suggest that we place greater emphasis on those feedstocks which 
do not impact agricultural markets. This includes wastes and residues; 
such as agricultural wastes, food processing byproducts, and urban wood 
waste; and feedstocks produced on non-agricultural land, such as algae 
and woody biomass from existing forestlands--including the extensive 
privately-owned, naturally-regenerated forests throughout the nation.

    Valuable Stewardship Tool

    Biomass harvesting can be a valuable tool to help improve stand 
conditions in a number of forest types for a number of management 
values. On many acres across the nation, the restoration of historic 
fire regimes through hazardous fuels reduction is a management 
priority. In those forests where hazardous fuels reduction is 
warranted, appropriate use of hazardous fuels reduction can decrease 
fire intensity, fire frequency, and fire velocity, as well as the 
likelihood that a fire will evolve into a highly destructive crown fire 
(Duvenek and Patterson 2007, Agee and Skinner 2005, Brose and Wade 
2002, Pollet and Omi 2002, Finney 2001, Fule et al. 2001, Stephens 
1998, Kalabokidis and Omi 1998, Weatherspoon and Skinner 1996). In 
forests where stand conditions (and associated fire regimes) have 
radically departed from the past, restoration of historical conditions 
may require vegetation management across a wide spectrum of tree 
species, ages, and sizes--not only the removal of ``slash and pre-
commercial thinnings'' allowed by the current definition. In addition 
to fire management, biomass harvesting has the potential to be an 
important component of management for other values and objectives. 
Thinning can be used to improved tree vigor, increase drought 
tolerance, and increase growth by decreasing the stand density and 
reducing competition among trees for sunlight, water, and nutrients 
(Smith et al. 1996). Because vigorous, healthy trees are generally more 
resistant to pests, thinning can be a successful means to reduce the 
extent and lethality of insect infestations in many forest systems 
(Fettig et al. 2007, Romme et al. 2006). Restoration and improvement of 
wildlife habitat in many circumstances depends on harvesting trees and 
forest biomass (McComb 2007, Gram et al. 2003, Desseker and McAuley 
2001, Hume et al. 1999). Like restoration of historic fire regimes, 
restoration or creation of specific habitat components may require 
management of a variety of trees other than just small trees and brush. 
The removal of biomass of all size-classes is also a regular component 
of management for a number of other forest values, including 
recreation, aesthetics, and watershed functioning (Stednick 1996, 
Troendle 1983).

    The RFS Definition and Sustainability

    The definition of `renewable biomass' included in the RFS was 
crafted to serve a laudable purpose--to ensure that the RFS provides 
incentives for sustainable stewardship of our nation's precious forest 
resources. Unfortunately, the current definition is NOT based on 
ecologically meaningful sustainability criteria. Instead, it is an 
arbitrary series of exclusions based on ownership and regeneration 
systems. As result, material from the most poorly managed forest 
plantations is eligible to be included in the RFS while trees from 
well-managed, sustainably-harvested Federal and private forests are 
not. Indicators and criteria of sustainability need to be based on 
objective, ecologically meaningful factors such as forest type, 
climate, topography, soil characteristics, fire regime, and local 
biodiversity. Sustainable forestry is not a simple concept; it means 
tailoring management practices to achieve multiple objectives, while 
improving and maintaining the productivity and ecological functioning 
of forested ecosystems--far more than simply avoiding the cutting of 
large trees.

    Conclusion

    Private forests and woodlands have the potential to contribute 
substantially to the production of sustainable biofuels and be a 
powerful tool for improving the quality of stewardship in many forests 
for a number of values, including wildlife habitat, forest hydrology, 
hazardous fuels reduction, and pest management. To this end, it is 
essential that biofuel incentives promote sustainable management 
practices. The broad exclusions included in the Renewable Fuel Standard 
(RFS), however, are not appropriate. A transparent and inclusive 
dialogue among stakeholders, interest groups, and policymakers will be 
a necessary step in developing a new definition that is flexible enough 
to utilize sustainably-produced woody biomass from all ownerships and 
regions where it is be an appropriate and sustainable management tool.




References:
Agee, J.K. and C.N. Skinner. 2005.   McComb, B.C. Wildlife Habitat
 Basic principles of forest fuel      Management: Concepts and
 reduction treatments. Forest         Applications in Forestry. CRC
 Ecology and Management 211:83-96.    Press, Inc., 2007. 384 p.
Alvarez, M. 2007. The State of       Pollet, J. and P.N. Omi. 2002.
 America's Forests. Bethesda, MD:     Effect of thinning and prescribed
 Society of American Foresters. 68    burning on crown fire severity in
 p.                                   ponderosa pine forests.
Brose, P. and D. Wade. 2002.          International Journal of Wildland
 Potential fire behavior in pine      Fire 11(1)1-10.
 flatwood forests following three    Romme, W.H., J. Clement, J. Hicke,
 different fuel reduction             D. Kulakowski, L.H. MacDonald,
 techniques. Forest Ecology and       T.L. Schoennagel, and T.T. Veblen.
 Management 163: 71-84.               2006. Recent forest insect
Desseker, D.F. and D.G. McAuley.      outbreaks and fire risk in
 2001. Importance of early            Colorado forests: a brief
 successional habitat to ruffed       synthesis of relevant research.
 grouse and American woodcock.        Colorado Forest Restoration
 Wildlife Society Bulletin            Institute, Colorado State
 29(2):456-465.                       University. 24 p.
Duvenek, M.J. and W.A. Patterson.    Searchinger, T., R. Heimlich, R.A.
 2007. Characterizing canopy fuels    Houghton, F. Dong, A. Elobeid, J.
 to predict fire behavior in pitch    Fabiosa, S. Tokgoz, D. Hayes, and
 pine stands. Northern Journal of     T. Yu. 2008. Use of U.S. croplands
 Applied Forestry 24(1): 65-70(6).    for biofuels increases greenhouse
Fargione, J., J. Hill, D. Tilman,     gases through emissions from land
 S. Polasky, and P. Hawthorne.        use change. Scienceexpress,
 2008. Land clearing and the          published online 7 February 2008;
 biofuel carbon debt.                 10.1126/science/1151861.
 Scienceexpress, published online 7  Schmer, M.R., K.P. Vogel, R.B.
 February 2008; 10.1126/              Mitchell, and R.K. Perrin. 2008.
 science.1152747.                     Net energy of cellulosic ethanol
Fettig, C.J., K.D. Klepzig, R.F.      from switchgrass. Proceedings of
 Billings, A.S. Munson, T.E.          the National Academy of Sciences.
 Nebeker, J.F. Negron, and J.T.       105(2):464-469.
 Nowak. 2007. The effectiveness of   Smith, D.M., B.C. Larson, M.J.
 vegetation management practices      Kelty, and P.M.S. Ashton. The
 for prevention and control of bark   Practice of Silviculture: Applied
 beetle infestations in coniferous    Forest Ecology. 9th ed. John Wiley
 forests of the western or southern   & Sons, Inc., 1996. 560 p.
 United States. Forest Ecology and   Stednick, J.D. 1996. Monitoring the
 Management 238: 24-53.               effects of timber harvest on
Finney, M.A. 2001. Design of          annual water yield. Journal of
 regular landscape fuel treatment     Hydrology 176: 79-95.
 patterns for modifying fire growth  Stephens, S.L. 1998. Evaluation of
 and behavior. Forest Science         the effects of silvicultural and
 47(2): 219-228.                      fuels treatment on potential fire
Fule, P.Z., A.E.M. Waltz, W.W.        behavior in Sierra Nevada mixed-
 Covington, and T.A. Heinlein.        conifer forests. Forest Ecology
 2001. Measuring forest restoration   and Management. 105:21-35.
 effectiveness in reducing           Troendle, C.A. 1983. The potential
 hazardous fuels. Journal of          for water yield augmentation from
 Forestry 99(11):24-29.               forest management in the Rocky
Gram, W.K., P.A. Porneluzi, R.L.      Mountain region. Journal of the
 Clawson, J. Faaborg, and S.C.        American Water Resources
 Richter. 2003. Effects of            Association 19(3): 359-373.
 experimental forest management on   Union of Concerned Scientists.
 density and nesting success of       Biofuels: An Important Part of a
 bird species in Missouri Ozark       Low-Carbon Diet. November 2007. 27
 Forests. Conservation Biology        p
 17(5): 1324-1337.                   Weatherspoon, C.P. and C.N.
Humes, M.L., J.P. Hayes, and M.W.     Skinner. 1996. Landscape-level
 Collopy. 1999. Bat activity in       strategies for forest fuel
 thinned, unthinned, and old-growth   management In: Status of the
 forests in western Oregon. The       Sierra Nevada: Sierra Nevada
 Journal of Wildlife Management       Ecosystem Project, final report to
 63(2):553-561.                       Congress. Vol. 11: Assessments and
Kalabokidis, K.D. and P.N. Omi.       scientific basis for management
 1998. Reduction of fire hazard       options. Wildl. Res. Ctr. Rep. No.
 through thinning/residue disposal    37. Davis, CA: University of
 in the urban interface.              California--Davis, Center for
 International Journal of Wildland    Water and Wildland Resources: 1471-
 Fire 8(1): 29-35.                    1492.


                                      
                                      
 Thank you, Ms. Wong. Mr. Blazer.STATEMENT OF ARTHUR ``BUTCH'' BLAZER, 
      FORESTER, STATE OF NEW MEXICO; EXECUTIVE MEMBER, COUNCIL OF
               WESTERN STATE FORESTERS; EXECUTIVE MEMBER,
         NATIONAL ASSOCIATION OF STATE FORESTERS, SANTA FE, NM

    Mr. Blazer. Thank you, Mr. Chairman, Ranking Member, Members of the 
Committee. I appreciate the opportunity to speak with you about this 
issue of great importance to the western United States and my State of 
New Mexico. I am Butch Blazer, the New Mexico State Forester and 
Executive Member of the Council of Western State Foresters as well as 
the National Association of State Foresters.
    I am representing the Council of Western State Foresters today. The 
Council is comprised of 17 western state foresters and six western 
territorial highland foresters. The Council's mission is to ensure the 
sustainability and health of western forests to meet today's needs and 
the needs of future generations. It is the mission that has compelled 
me to testify before you on the impact of the 2007 Energy Bill's 
definition of renewable biomass within the Renewable Fuel Standard goal 
section of the bill.
    As a member of the Western Council and the National Association, I 
am uniquely qualified to address the issue that is on the minds of many 
of my peer state foresters. I represent a diverse group of government 
foresters and resource managers who are responsible to their people and 
their natural resources.
    Congress took up the issue of energy security for our country in 
the 2007 Energy Bill and spent many months of hearings and testimonies 
on the importance of this issue, as well as the many factors that must 
be integrated into the final version of a successful bill. The 
Renewable Fuel Standard section of 2007 Energy Bill that was marked up 
and approved by the jurisdictional Committees was a solid draft and 
contained a workable definition of woody biomass. However a last-minute 
change to the definition of renewable biomass changed the bill in a 
significant manner.
    The 2007 Energy Security and Independence bill signed by the 
President now includes an overly restrictive definition of renewable 
biomass that has created unfortunate consequences for the 
implementation of a responsible resource management strategy consistent 
with the purposes of the bill itself.
    The revision was advocated by groups based on philosophies of old 
and result in broad, generalizing mandates that hinder our ability to 
restore forests, capture carbon from the atmosphere, provide clean air 
and water and sustain healthy, vibrant communities.
    As currently codified, the definition for renewable biomass 
stipulates the conditions wherein woody biomass on Federal and non-
Federal lands may be used as a resource for the production of biofuels. 
The revised and subsequently adopted definition of renewable biomass 
restricts the source and type of wood that could be counted towards the 
Renewable Fuel Standard goal, in part by restricting use of woody 
material from Federal lands thereby eliminating the opportunity to 
count towards the law's 36 billion gallon goal for renewable fuels.
    This will adversely impact significant forested ecosystems, 
especially as our climate gets warmer, fuel loads increase, and the 
publicly-funded budgets to undertake needed work, such as reducing 
hazardous fuels, shrink. We only have to look as far as this year's 
fire season in my State of New Mexico, northern California, as well as 
states outside the West, such as Texas and North Carolina, to 
understand what is at stake.
    Already over 3,300,000 acres have burned, and we have spent over 
$800 million in suppression alone this year. And that is just the 
wildfire end of the problem. The out-of-control wildfires themselves 
have the potential to turn our forests from carbon sinks into carbon 
sources.
    Researchers from the National Center for Atmospheric Research and 
the University of California report that carbon emissions from fires in 
some states can exceed that which is emitted through human use of 
fossil fuels. A striking implication of very large wildfires is that a 
severe fire season lasting only--excuse me. I am sorry. I need to 
change glasses here.
    The Chairman. Take your time, sir.
    Mr. Blazer. I had my glasses break on me, and I picked some up. And 
they are not working very well. I apologize.
    Researchers from the National Center for Atmospheric Research and 
the University of California report that carbon emissions from fires in 
some states can exceed that which is emitted through human use of 
fossil fuels. A striking implication of very large wildfires is that a 
severe fire season lasting only 1 or 2 months can release as much 
carbon as the annual emissions from the entire transportation or energy 
sector of an individual state based on the NCAR study.
    Further, offsetting any amounts of foreign oil with domestically-
supplied renewable energy has obvious foreign policy advantages that 
only add to the justification that we need not artificially limit our 
biofuel feedstocks. The current limiting definition unjustifiably adds 
to the cost of business, a tough notion to swallow, considering the 
worsening budget and fiscal climate we are in.
    I would add that the definition creates a bureaucratic nightmare 
that makes any use of woody biomass cost prohibitive. Imagine trying to 
track woody biomass that can only come from certain lands as is 
currently crafted. The needed systems would not be cheap nor easy for 
any government entity to track.
    The definition also prohibits the utilization of biomass from 
forests that are considered rare or imperiled based on global or state 
rankings pursuant to the State Natural Heritage Program databases. This 
precludes the use of other information or programs that provide 
guidance on these forests such as state wildlife strategies and the 
forest legacy program to name a few. This is another example of some 
unnecessary and artificial restrictions.
    Not to be overlooked is the impacts on private forestlands. I have 
elaborated on this in my written testimony.
    Continuing, the definition also precludes the utilization of 
biomass from late succession or old growth forests but provides no 
specification for what constitutes these conditions. Biomass market 
investment would be discouraged even though they might otherwise 
encourage thinning in older stands to improve forest health or prevent 
wildfire. Without specifying the conditions, the current definition 
will create added uncertainty into the woody biofuel equation, 
something that will only compound the disincentives of private sector 
woody biofuel investment.
    Our Federal lands, which make up around 40 percent of the land 
ownership in the West, are important sources of cellulosic material 
that can and should be used toward the goals of the 2007 Energy Bill. 
The current measured and thoughtful approaches to the management of and 
uses of woody biofuels were not taken into consideration during the 
discussions of materials for the RFS goals.
    Is there enough woody biomass? The current net growth alone of 
forest biomass conservatively estimated at 360 million tons per year 
could meet 30 percent of America's need for liquid fuel.
    The Chairman. Mr. Blazer, if you could summarize and finish your 
testimony, sir.
    Mr. Blazer. Yes. In summary, I just feel that the material coming 
off of our Federal lands is going to be imperative if we are going to 
be able to meet the needs of protecting our life and property of our 
folks out West. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Blazer follows:]

 Prepared Statement of Arthur ``Butch'' Blazer, Forester, State of New
     Mexico; Executive Member, Council of Western State Foresters;
Executive Member, National Association of State Foresters, Santa Fe, NM
    Mr. Chairman, Ranking Member, Members of the Committee, I 
appreciate the opportunity to speak with you about this issue of great 
importance to the Western United States and my State of New Mexico. I 
am Arthur `Butch' Blazer, New Mexico State Forester and Executive 
member of the Council of Western State Foresters (CWSF) as well as the 
National Association of State Foresters. I am representing the Council 
of Western State Foresters today. The Council is comprised of 17 
western state foresters and six western Territorial Island Foresters. 
The Council's mission is to ensure the sustainability and health of 
western forests to meet today's needs and the needs of future 
generations.
    It is this mission that has compelled me to testify before you on 
the impact of the 2007 Energy Bill's definition of renewable biomass 
within the Renewable Fuel Standard (RFS) goal section of the bill. 
There are concerns that the current definition is not sustainable, 
meaning ecologically, economically and socially sustainable. As a 
member of the Western Council and National Association, I am uniquely 
qualified to address this issue that is on the minds of so many of my 
peer state foresters. I represent a diverse group of government 
foresters and resource managers who are responsible for the forest 
management and to the people of their state or island.
    There are many forest and economic health facets involved in this 
issue. As a representative of the Western Council, I will highlight the 
western concerns on this issue. However, I also want to inform the 
Committee that we are also concerned with the national implications for 
private lands and plantations that will be addressed by other witnesses 
today.
    Congress took up the issue of energy security for our country in 
the 2007 Energy Bill and spent many months holding hearings and 
receiving testimony on the importance of this issue as well as the many 
materials that must be integrated into the final version of a 
successful bill. The Renewable Fuel Standard section of the 2007 Energy 
bill that was marked-up and approved by the jurisdictional committees 
was a solid draft and contained a workable definition for `woody 
biomass.' However, a last minute change to the definition of `renewable 
biomass' changed the bill in a significant manner.
    The 2007 Energy Security and Independence Bill signed by the 
President now includes an overly-restrictive definition of renewable 
biomass that has created unfortunate consequences for the 
implementation of a sustainable resource management strategy consistent 
with the purposes of the bill itself. The revision was advocated by 
groups based on philosophies of old that result in broad, generalizing 
mandates that hinder our ability to restore forests, capture carbon 
from the atmosphere, provide clean air and water, and sustain healthy, 
vibrant communities.
    According to the report, A Strategic Assessment of Forest Biomass 
and Fuel Reduction Treatments in Western States,* in the west there are 
at least 28 million acres of forest that could benefit from reducing 
hazardous fuels. Implementation of any significant, sustainable effort 
would generate large volumes of biomass and create jobs in the West. A 
new way of forestry and business has emerged, one that addresses the 
forest health issues, wildland fire, renewable energy, as well the 
potential for community investment and landscape-scale restoration 
opportunities.
    As currently codified, the definition for `renewable biomass' 
stipulates the conditions wherein woody biomass on Federal and non-
Federal lands may be used as a resource for the production of biofuels. 
The revised, and subsequently adopted, definition of `renewable 
biomass' restricts the source and type of wood that can be counted 
towards the Renewable Fuel Standard goal in part by restricting use of 
woody materials from Federal lands. The definition of renewable biomass 
specifies that Federal lands, particularly the national forest system 
lands, are excluded from the definition of `renewable biomass', unless 
they are in the immediate vicinity of communities, thereby drastically 
and practically eliminating the opportunity to use biomass for the 
production of biofuels that can count towards the law's 36 billion 
gallon goal for renewable fuels. Considering the vast Federal land 
ownership in the west, a definition that limits biomass in such a way 
unfairly hamstrings the west and puts us at an economic disadvantage to 
establish bio-based industries that can help with so many of our 
nation's ills. This will adversely impact significant forested 
ecosystems especially as our climate gets warmer, fuel loads increase 
and the publicly-funded budgets to undertake needed work, such as 
reducing hazardous fuels, shrink. This is not a sustainable scenario. 
We must invest in our forests and communities and not lock them up.
    The definition, as currently written, is a problem because it 
artificially delineates what is eligible for the usage of woody biomass 
from many sources including both private and public lands. It 
unnecessarily constrains important biomass supply sources to help meet 
our nation's renewable energy goals and in particular, has a limiting 
effect on private market investment in woody biofuel solutions to our 
larger wildfire and forest health problems. Solutions that not only 
would help diminish our dependence on foreign oil, but also help 
address the catastrophic and mega wildfire problem which threaten 
nearly 170 million acres of our nation's forests. We only have to look 
as far as this year's fire season in northern California, as well as 
states outside of the West such as Texas and North Carolina, to 
understand what is at stake. Already over 3,300,000 acres have burned 
and we have spent over $800 million in suppression alone this year. And 
as early studies put ``true fire costs,'' those that consider the 
broader range of wildfire impacts (lost economic productivity, damage 
to ecosystem services, utility outages, etc.), as high as 30:1, we 
cannot afford to close the door on helpful options.
    And this is just the wildfire end of the problem. The out-of-
control wildfires themselves have the potential to turn our forests 
from carbon sinks into carbon sources. Researchers from the National 
Center for Atmospheric Research and the University of California report 
that carbon emissions from fires--in some states--can exceed that which 
is emitted through human use of fossil fuels. A striking implication of 
very large wildfires is that a severe fire season lasting only 1 or 2 
months can release as much carbon as the annual emissions from the 
entire transportation or energy sector of an individual state, based on 
the NCAR study.
    Further, offsetting any amounts of foreign oil with domestically-
supplied renewable energy has obvious foreign policy advantages that 
only add to the justification that we need not artificially limit our 
biofuel feedstocks. The current limiting definition unjustifiably adds 
to the cost of business, a tough notion to swallow considering the 
worsening budget and fiscal climate we are in. The bottom line is that 
we have the laws and regulations in place to guarantee we will maintain 
healthy and sustainable forests, even in the face of increasing demands 
on woody biofuel feedstocks. If we want truly sustainable and 
economically-feasible management of our forestland for forest health 
and renewable energy, the definition must be changed.
    I would add that the definition creates a bureaucratic nightmare 
that makes any use of woody biomass cost prohibitive. Imagine trying to 
track woody biomass that can only come form certain lands as is 
currently crafted. The needed systems would not come cheap nor easy for 
any government entity to track. The definition also prohibits 
utilization of biomass from forests that are considered rare or 
imperiled based on global or state rankings pursuant to State Natural 
Heritage Program databases. This precludes the use of other information 
or programs that provide guidance on these forests such as state 
wildlife strategies, and the forest legacy program, to name a few. This 
is another example of some unnecessary and artificial restrictions.
    We would also like to reinforce what you have heard today about the 
impacts this definition has on private forestlands. The definition 
constrains utilization of woody biomass from plantations to ``actively-
managed tree plantations'' on land that was cleared prior to enactment 
of the legislation, i.e. December 19, 2007. New plantations either 
established on bare land or converted from other vegetative cover after 
the date do not qualify as source material. This has the effect of 
constraining economically efficient sources of supply for a national 
energy initiative. Further, what would otherwise be a market incentive 
to reforest bare land or create and perpetuate forest cover could have 
the effect of encouraging conversion to non-forestland use. This issue 
is significant to the western U.S. as the economic constrain of any 
sources for a national energy initiative will hinder the long-term 
success of the U.S. in this market.
    Continuing, the definition also precludes the utilization of 
biomass from ``late succession'' or ``old growth forest,'' but provides 
no specification for what constitutes those conditions. Biomass market 
investment would be discouraged even though they might otherwise 
encourage thinning in `older' stands to avoid or mitigate the spread of 
insect and disease infestation, prevent wildfire and perpetuate healthy 
growth. Without specifying the conditions, the current definition will 
create added uncertainty into the woody biofuel equation, something 
that will only compound the disincentives for private sector woody 
biofuel investment.
    Our Federal lands, which make up over 40% of the land ownership in 
the West, are important sources of cellulosic material that can and 
should be used towards the goals of the 2007 Energy Bill. The current 
measured and thoughtful approaches to the management of and uses of 
woody biofuels were not taken into consideration during the discussions 
of materials for the RFS goals. Our belief is that the best and most 
successful way of approaching Federal forestland management, or all 
Federal land management for that matter, is to include communities and 
stakeholders in the process. This assures a balanced, solution oriented 
approach. This is not reflected in the last minute change to the 
renewable energy definition in the Energy Bill and does no justice in 
recognizing the scale of the problem we face around forest health, 
climate, and our dependence on foreign oil. Obviously we want to be 
cognizant of project scale, but a one-size-fits all approach is not the 
right approach. It only stifles the innovation and investment in woody 
biofuels that is needed and is part of a well rounded solution to these 
problems.
    Allow me to expand upon this point with a specific example. There 
are many groundbreaking cross boundary collaborations that are helping 
to improve the health of western forests, such as that demonstrated 
through the implementation of the White Mountain Stewardship Contract 
on the Apache-Sitgreaves National Forest. Less than a decade ago, 
Arizona's forest-based communities near the Apache-Sitgreaves N.F. 
shared concerns regarding the departure of the local forest products 
industry and an impending threat of large, uncharacteristic wildfires. 
In 2002, the Rodeo-Chediski fire burned nearly \1/2\ million acres and 
consumed over 400 homes forcing communities, business owners, and 
agency employees to move beyond the gridlock which often accompanies 
forest stewardship on our national forests. The end result included a 
long-term contracting mechanism (i.e., stewardship contract developed 
collaboratively by the agency and local community) which provided the 
necessary woody biomass supply assurance needed before investors were 
willing to outlay the significant capital required to produce renewable 
heat and/or power for local community members.
    One such example is the Snowflake White Mountain Biomass Power 
Plant in Arizona. The plant is generating electricity through a wood-
burning boiler using forest thinning (wood-waste material from the 
area's forest industries) and waste recycled paper fibers from an 
existing newsprint paper mill located adjacent to the biomass facility. 
At least 75 percent of the Snowflake plant's production will be 
generated by forest-thinning efforts occurring on U.S. forestlands that 
surround the communities of Arizona's White Mountains and it could not 
function if not for the stewardship contract mentioned above. Now this 
example does not tie directly to use of woody biomass for biofuel 
production, but a direct analogy can be made here. The private sector 
will not invest the tens to hundreds of millions of dollars needed to 
commercialize woody cellulosic biofuel production in the West knowing 
that the vast majority of Federal lands are off limits.
    The current net growth of forest biomass--conservatively estimated 
at 360 million tons per year--could meet 30 percent of America's need 
for liquid fuels, perhaps more. Much of the material to provide this 
fuel would come from the small trees that should be removed to improve 
the health of the forests while reducing the impacts and costs of 
wildfire. An estimate from the USFS Forest Products Lab states that in 
order to improve health and decrease the risk of catastrophic wildfire, 
8.4 billion dry tons of material needs to be removed from the national 
forests alone. If this 8.4 billion dry tons of material can not be 
counted towards to RFS goal the opportunities for energy independence 
in this country are being significantly limited, our forests and 
citizens all suffer.
    We believe the Federal Government can and should be responsible 
land stewards and do their part to see our country on its way to energy 
independence. We suggest a definition of renewable biomass that 
includes materials from both private and Federal lands, gives guidance 
as to how those materials can meet the RFS goal and specifies how our 
nation's energy goals are going to be met. The demand for renewable 
energy and the need to protect communities and forests is a perfect fit 
to turn wood waste into a clean burning, renewable source of energy. We 
urge Congress to consider changing the definition of renewable biomass 
to allow materials from Federal lands to be `counted' towards our 
Country's goals for renewable fuels in the future. Where to start? We 
would recommend the definition in the recently passed farm bill is a 
good place to look. Please let us know if you would like to follow up 
and pursue some solutions to this problem. We stand ready to help. 
Thank you for your consideration.


    The Chairman. Thank you, Mr. Blazer. Mr. Burke. But before 
Mr. Burke begins, I would remind all witnesses to try to stay 
as close to the 5 minute rule as possible. Mr. Burke.

 STATEMENT OF JOHN W. BURKE III, TREE FARMER, CAROLINE COUNTY, 
          VA; PARTNER, McGUIRE WOODS LLP, RICHMOND, VA

    Mr. Burke. Thank you. Mr. Chairman, Members of the 
Subcommittee, my name is John Burke. I am a private landowner 
in Caroline County, Virginia. I manage forestland for my family 
and for a number of family limited partnerships.
    Our tree farms contains both planted trees, such as pine, 
bald cypress, green ash, and hardwood species, as well as 
naturally regenerated hardwood and pine. In a moment, you will 
see why this diversity in our tree farm is relevant to my 
testimony.
    Today there are nearly five million family forest owners 
like myself, and we own nearly \2/3\ of the nation's productive 
forestland. It is this forest resource that supplies the bulk 
of forest products used in wood and paper manufacturing. Today 
these family forest owners face many challenges in managing 
their forests and in planting for the succession of their 
forests.
    I would like to share some thoughts in connection with the 
definition of renewable biomass as it appears in the RFS. In 
particular, the definition of renewable biomass in subparts ii 
and iv appear too narrow and too restrictive. This definition 
does not allow our country to reach out to the broad diverse 
forest resources that can sustainably provide a renewable 
source of biomass for the transportation fuel pipeline.
    Before I get into the details, there are goals and 
statements which I believe that most voters will support. 
First, encouraging healthy forests is a good thing. Second, 
sustainably increasing the inventory of available, renewable 
biomass is a good thing. Third, increasing and strengthening 
markets for forest products coming from forestland owners is a 
good thing. I will punctuate the limitations of the definition 
with two examples from our woodlands.
    On one of our naturally regenerated stands, that is a stand 
of hardwood, we conducted a pre-harvest thinning. This is a 
management technique used to remove inferior species, small 
diameter competition and trees that will not survive until 
harvest. In carrying out this healthy forest practice, the wood 
that comes from our thinning should be able to flow into the 
renewable biomass market. Under the definition, it appears that 
this thinned material may not because these were not ``planted 
trees'' and the thinning may not be considered, under some 
definitions, as a pre-commercial thinning. Naturally 
regenerated stands are a very important and a very large 
component of the makeup of America's forest resources.
    Further the wide geographic availability of naturally 
regenerated forests means that they usually will be part of a 
local supply, thereby reducing transportation costs for this 
very important cellulosic feedstock. As you can see, this 
important component of America's forests and the good 
management techniques needed for these naturally regenerated 
forests could be ignored by the existing definition and 
therefore ineligible to the RFS.
    A second example from our woodlands: In one of our stands, 
it consists of both naturally regenerated pine, loblolly pine, 
and planted pine. This stand was established after a harvest 
that my father conducted. Following the harvest we did site 
prep and planted trees, pine trees, on most of the stand. A 
unique feature was the presence of naturally regenerating 
loblolly pines. We did not plant in that area but allowed these 
to naturally regenerate and to develop along with the planted 
pines.
    At the sixteenth year of the life of this stand, we 
mechanically thinned the entire stand to remove the weaker 
trees and to allow crop trees better spacing, that is more 
access to water, nutrients, and sunlight. These practices are 
consistent with healthy forest management. Under the present 
definition, however, it is not clear whether and to what extent 
materials from our thinning would be considered renewable 
biomass. This definition may either exclude the materials we 
thinned from the stand from the renewable energy pipeline, or 
in the alternative require a very difficult identification and 
sorting process to separate out those trees that were thinned 
from planted trees versus those trees that were thinned from 
naturally regenerated trees.
    As you can see from this fact pattern, the definition 
appears unnecessarily limited and could require complex and 
probably unworkable tracking mechanisms.
    In sum, I would urge that the definition of renewable 
biomass under the Energy Independence and Security Act of 2007 
be broadened and expanded by new legislation amending this 
title. In the alternative, it is my request that these concerns 
be taken into consideration as part of the rule making process 
so as to broaden and make more inclusive the definition of 
renewable biomass. Thank you.
    [The prepared statement of Mr. Burke follows:]

Prepared Statement of John W. Burke III, Tree Farmer, Caroline County, 
              VA; Partner, McGuire Woods LLP, Richmond, VA
    Thank you for this opportunity to testify regarding the role of 
America's forest resources in connection with the Renewable Fuel 
Standard under the Energy Independence and Security Act of 2007.
    Mr. Chairman and other Members of the House Committee on 
Agriculture's Subcommittee on Conservation, Credit, Energy and 
Research, my name is John Burke. I am a private landowner in Caroline 
County, Virginia. I manage forestland that my wife and I own and also 
manage forestland for a number of family limited partnerships. In 
addition, I practice law in Richmond, Virginia and am active in 
forestry related organizations at the state and national level. Our 
tree farm contains planted trees, such as pine, bald cypress, green ash 
and other hardwood species, as well as naturally regenerated pine and 
hardwood. In a moment you will see why this diversity in our woodlands 
is relevant to my testimony.
    The wise management of forest resources is critically important to 
the health of a forest and to many benefits that the public enjoys, 
including habitat for various wildlife species, protection of water 
quality through management of critical watersheds, and the enhancement 
of air quality and green space around our cities and urban areas. 
Stewardship and management by forest landowners for future 
sustainability cannot, however, occur in a vacuum. It must occur in the 
context of real world markets and the challenges and risks facing 
family forest owners.
    Family forest owners currently face difficult economic times and 
the challenging task of maintaining the health of their forests. Today 
there are nearly five million family forest owners in the United States 
who own nearly \2/3\ of the nation's productive forestland. It is this 
forest resource that supplies the bulk of the forest products used for 
wood and paper manufacturing. Today this group of landowners faces many 
challenges in managing their forests and planning for the succession of 
their forests to future generations.
    Now that you know my interests and bias, I would like to share some 
thoughts in connection with the definition of renewable biomass as it 
appears in the Renewable Fuel Standard of the Energy Independence and 
Security Act of 2007. Allow me to direct your particular attention to 
two subparts contained in the definition of renewable biomass. These 
are subparts (ii) and (iv). In sum, the definition of renewable biomass 
appears too narrow and restrictive. It does not allow us to reach out 
to the broad, diverse forest resources that can sustainably provide a 
renewable source of biomass for transportation fuels. As we drill down 
on the particulars of this definition, I will share with you those 
areas where I believe the definition contains unnecessary and 
inappropriate limitations.
    There are three goals or statements which I believe most of 
America's voters will support:

    (1) Encouraging healthy forests is a good thing;

    (2) Sustainably increasing the inventory of available renewable 
        biomass is a good thing; and

    (3) Increasing and strengthening markets for the forest products 
        coming from land of forest owners is a good thing.

    We will now examine whether, and to what extent, the definition of 
renewable biomass furthers these goals and, equally important, the 
goals of the Energy Independence and Security Act of 2007.
    Subparagraph (ii) of the definition of renewable biomass contains a 
number of unnecessary restrictions or limitations. For example, the 
requirement of ``planted trees'' and ``tree plantations'' could exclude 
from the definition of renewable biomass materials from naturally 
regenerated forests. Further, this definition's limitation of ``land 
cleared at any time prior to the enactment of this sentence'' is an 
unnecessary timing limitation, apparently intended to impact what some 
view as inappropriate land conversion.
    I will punctuate the impact of the ``planted trees'' limitation 
with two examples from our woodlands. On one of our naturally 
regenerated hardwood stands, we conducted a pre-harvest thinning. This 
is a management technique used to remove inferior species, small 
diameter competition and trees that will not survive until the harvest. 
This technique improves the health of the forest and improves the 
genetic makeup of the under story. In this way, when the future harvest 
occurs, the resulting next stand of hardwood trees will have larger 
trees, of better quality with a higher percentage of the desired tree 
species. In carrying out this healthy forest practice, the wood that 
comes from our pre-harvest thinning should be able to flow into the 
renewable biomass market. Under this definition, it appears that this 
thinned material would not, because these were not ``planted trees''. 
Naturally regenerated stands are a very large and important component 
of the overall makeup of America's forest resource. Further, the wide 
geographic availability of naturally regenerated forests means that 
they will usually be part of a local supply, thereby reducing 
transportation costs for this cellulosic feedstock. On our tree farm, 
we try to maintain a balance between naturally regenerated stands and 
planted stands. As you can see, this important component of America's 
forests and the good management techniques needed for these naturally 
regenerated forests could be ignored by the existing definition of 
renewable biomass and therefore not eligible for inclusion in the Fuel 
Standard.
    Further, it appears that the definition is intended to capture only 
material from planted tree plantations. Another example from our family 
forest will highlight the problem with this limitation. One of our pine 
stands consists of approximately 100 acres of loblolly pine. This stand 
was established following a harvest that my father conducted. After the 
harvest, we did site preparation through a control burn, planted pines 
on most of the stand (more on that later) and then sprayed the stand 
during the second year of its life to control competition. One unique 
feature of this stand, however, was the presence of an area of 
approximately 30 acres where loblolly pines were naturally 
regenerating. My father did not plant this area, but allowed the 
naturally regenerated pines to develop along with the other planted 
pines on the rest of the stand. Over a 3 year period we conducted, by 
hand, an initial thinning on that area of the stand that was naturally 
regenerated because these trees were too densely populated. Then, at 
approximately the 16th year of this stand's life we had the entire 
stand mechanically thinned to remove the weaker trees and to allow the 
crop trees better spacing (more access to water, nutrients and 
sunlight) so as to be more resistant to insect and disease attack, and 
to grow bigger and better for future timber harvesting and the other 
collateral benefits of a healthy forest. All of these practices are 
consistent with healthy forest management. Under the present 
definition, however, it is not clear whether and to what extent 
material from this later thinning would be considered renewable 
biomass. In other words, the pines which we allowed to regenerate 
naturally may not be considered ``planted trees''. So this definition 
may either (1) exclude the materials we thinned from this stand from 
the renewable energy pipeline or, in the alternative, (2) require a 
very difficult identification and sorting process to separate out those 
trees which were thinned from planted trees versus those trees which 
were thinned from naturally regenerated trees. As you can see from this 
fact pattern, the definition is unnecessarily limited and could require 
complex and probably unworkable tracking mechanisms.
    An additional concern arises as I study the definition and the 
limitations contained in subparagraph (ii). In particular, a hyper-
technical reading could exclude from the renewable biomass pipeline 
even those trees thinned from a planted stand, because in many 
instances the trees thinned are not ``planted trees'', but naturally 
regenerated competition growing up in the planted stand. It is my 
assumption and my hope that this is not the case and I am offering this 
to you so that it will be part of the legislative history as rules are 
written and as courts attempt to adjudicate what these words mean.
    The timing limitation also contained in subparagraph (ii) requires 
that for wood products to qualify they must come from ``land cleared at 
any time prior to the enactment of this sentence.'' This ``prior to'' 
requirement unnecessarily restricts the inventory of available 
renewable biomass. If the goal is to control land conversion, then it 
should be addressed directly at the state or local level and not buried 
in this definition. Our free market has worked quite well in the past 
and we should continue to allow it to work in connection with a forest 
landowner's decision with regard to his or her land and what types of 
trees or crops will be grown there.
    Subparagraph (iv) of the definition of renewable biomass also 
includes unnecessary limitations on the inventory of biomass available 
to the renewable energy pipeline. In particular, it appears to be 
limited to only ``slash and pre-commercial thinnings'' and it has an 
exclusion based on ``old growth forests'' or ``late successional 
forests''. First, there is no scientific basis for limiting the 
feedstocks that qualify for renewable energy to only ``pre-commercial 
thinnings'' as opposed to any type of thinning. A landowner and his or 
her consulting forester should be allowed to make the decision whether, 
based on the health of the forest, landowner objectives and market 
conditions, to allow materials from any thinning to flow into the 
renewable energy pipeline. Further, the concepts of ``old growth 
forests'' and ``late successional forests'' are hot buttons in 
forestry. Many people disagree about the validity and meaning of these 
terms. To exclude products coming from these types of areas creates its 
own problems. First, there are mechanisms at certain state and local 
levels to protect these types of rare stands where, on the unique facts 
at hand, a particular type of tree may be very difficult to reestablish 
if it is lost. This legislation is not the place for that activity. 
Second, sorting out which thinnings come from one type of stand versus 
another will create an implementation headache that is likely to 
discourage the availability of renewable biomass inventory.
    Limitations such as ``tree plantations'' and ``old growth forests'' 
reveal the footprints of special interests. This, in and of itself is 
not necessarily bad; however, the limitations contained in the 
definition of renewable biomass are counterproductive to the goals of 
the legislation and counterproductive to the three goals discussed 
above. Further, these limitations will likely lead to disputes and 
unnecessary complexities as the regulations are written to implement 
this law. Moreover, these limitations will lead to disputes and 
complexities as the law and the regulations are implemented on the 
ground, thereby reducing the available inventory of renewable biomass. 
Further, litigation may result as parties with diverse interests try to 
understand what these unclear words mean. Such litigation will work its 
way through the trial and appellate courts of our Federal system. At 
some point, we will look back and say, ``This law was a great idea. Why 
didn't it work?'' The definition of renewable biomass needs to be 
simplified and streamlined and the limitations and restrictions need to 
be removed from it so that the working definition of renewable biomass 
is not the reason for our failure to accomplish the goals of this 
legislation, and other goals important to the health of our forests.
    Some may argue that a broad definition of renewable biomass may 
overlap with existing markets for pulpwood and wood chips and that, in 
these hard economic times, we should not sacrifice one market for 
another. First, I concur that these are difficult economic times and 
that family forest owners feel the stress of these difficult economic 
conditions. Family forest owners are faced with tight and ever-
shrinking markets for the wood that we choose to sell. No one--least of 
all me--would want simply to gain one market for my low-value wood and 
lose another at the same time. The answer, however, is not to limit the 
definition of renewable biomass for biofuels, but rather to broaden the 
definition and to use the ``biorefinery bridge.'' In particular, our 
existing pulp and paper industry has a world class procurement system 
and it is in the best position of all of us to become a major player in 
the production of fuel from renewable biomass. This industry's mills 
are almost always close to the wood and their manufacturing processes 
already include systems that could be adapted for biofuel production. 
So it is time to broaden, not to limit, the definition of renewable 
biomass for biofuels.
    The overall benefits of the Renewable Fuel Standard under the 
Energy Independence and Security Act of 2007 dovetail with the benefits 
available under the energy title of the farm bill. However, these two 
provisions, meant to be bookends to encourage renewable energy, do not 
work well together. The definition of renewable biomass contained in 
the farm bill is broad and will permit many projects; however, the 
definition of renewable biomass in the Renewable Fuel Standard appears 
narrow and will cause a bottleneck as those products try to find their 
way to market.
    In conclusion, the definition of renewable biomass, as contained in 
the Renewable Fuel Standard under the Energy Independence and Security 
Act of 2007 is too limited and exclusionary. First, this definition 
could exclude from the renewable energy fuel pipeline many appropriate 
sources of biomass. These limitations are, therefore, counterproductive 
to the goals of the legislation. In particular, much appropriate 
biomass from naturally regenerated family forests may not be available 
as a feedstock to qualified renewable energy fuels. Second, the 
definition fails to encourage healthy forest practices. For example, 
the thinning of naturally regenerated stands is, in many instances, a 
proper forest management tool and materials from these thinnings should 
qualify as an input to the renewable energy pipeline. Third, the 
limitations appear counterproductive to providing more and stronger 
markets for the forest products coming from the land of family forest 
owners.
    I urge that the definition of renewable biomass under the Energy 
Independence and Security Act of 2007 be broadened and expanded by new 
legislation amending this title. In the alternative, it is my request 
that these concerns be taken into consideration as part of the rule-
making process, so as to broaden, and to make more inclusive, the 
definition of renewable biomass.

    The Chairman. Thank you, Mr. Burke. Mr. Grant.

         STATEMENT OF DUANE GRANT, PARTNER AND GENERAL
 MANAGER, GRANT 4-D FARMS; GENERAL MANAGER, FALL RIVER FARMS; 
VICE CHAIRMAN OF THE BOARD, SNAKE RIVER SUGAR COMPANY, RUPERT, 
                               ID

    Mr. Grant. Chairman Holden, Ranking Member Lucas, my name 
is Duane Grant, and I am a farmer from Rupert, Idaho. I farm 
wheat, barley, corn, potatoes, and sugar beets. It may also 
interest the Committee to know that I am Vice Chair of the 
group known as Snake River Ethanol, a cooperative in Idaho that 
is looking at building a destination corn-based ethanol 
facility. I was also Chairman of the Straw Value Add Committee, 
a consortium of farmers in Idaho who worked diligently with 
Iogen to site a cellulosic refinery in southern Idaho, which I 
will touch on further in my testimony.
    I appreciate the opportunity to testify here today on the 
extended RFS included as part of the EISA and associated issues 
of interest to agricultural producers.
    Clearly, passage of the EISA puts us on a path where 
renewable fuels will make up an ever greater share of our 
liquid transportation requirements. Let us talk for just a 
minute about biomass production in context of agriculture.
    I think that some felt that with the passage of the EISA 
and other biofuels related legislation, farmers would be racing 
to plant switchgrass and other dedicated energy crops from 
fence row to fence row.
    But despite operating in a very risky environment, farmers 
are generally a very risk-adverse group. You are not going to 
see us rushing to plant any new crop that has never been grown 
before on a commercial scale in this country or an other 
country for that matter, which has no direct market already 
established. Obviously then without adequate feedstock growing 
in the field, a refinery won't locate to a given location, and 
without a refinery to purchase feedstock, growers will continue 
to be reluctant to grow it, leading us to the proverbial 
chicken and egg problem.
    This Committee and the Congress recognized this dilemma in 
the recently enacted 2008 Farm Bill's Energy Title and with the 
establishment of the Biomass Crop Assistance Program, I 
encourage you to urge quick implementation of this program.
    Let us talk for a moment about sustainability and what that 
means in this context, how central to many debates in 
agriculture these days is the idea of sustainability. Certainly 
this means different things to different people, but I would 
suggest the following as a working definition. 
``Sustainability'' means managing the use, development, and 
protection of our natural, social, and environmental resources 
in a way and at a rate that enables people to meet their 
current needs without compromising the ability of future 
generations to meet their needs. So the question is not whether 
or not we should produce biomass or any other agricultural crop 
for that matter in a sustainable manner. The question becomes 
how to find a balance between these often competing values.
    I have personal experience in an effort where community 
came together and balanced the economic, environmental, and 
social interests for the greater good. The Iogen Corporation, a 
Canadian cellulosic ethanol manufacturer, had a interest in 
building a commercial-sized cellulosic refinery in southern 
Idaho. However, unfortunately due to delays in getting a loan 
guarantee program established at the Department of Energy, the 
project is currently on hold. But the process that those of us 
in the community have gone through to secure feedstock for the 
facility is instructive.
    The proposed Iogen facility would utilize primarily wheat 
and barley straw for conversion to cellulosic ethanol. We 
surveyed growers in the region and found that we were able to 
obtain between 600,000 and 800,000 tons of wheat and barley 
straw under preproduction pre-refinery construction contracts. 
Those were contractual commitments the growers made. We 
determined that we could remove this tonnage and still retain 
enough residue on the ground to ensure the maintenance of 
organic matter in the soil so as to maintain soil productivity. 
All of this was accomplished in association with local 
community interests and local environmental interests.
    The definition then, moving to the next topic of what 
actually is renewable biomass, is of interest to us as well. Of 
course, as we have heard often today as provided in the EISA, 
renewable biomass is defined as ``planted crops and crop 
residue harvested from agricultural land cleared or cultivated 
at any time prior to the enactment of this sentence that is 
either actively managed, fallow, or non-forested.''
    The energy component of the farm bill contains a definition 
of renewable biomass that is in contradiction to this 
definition and is not nearly as restrictive as the definition 
contained in the EISA. And so while I certainly appreciate this 
Committee's interest in providing farmers with the best 
economic opportunity for growing biomass on any and all of the 
land they might have, it might be important to remember the 
history of farming and cultivation in this country when 
considering this definition.
    Farming and cultivation have occurred in this country since 
well before it became a country but were revolutionized when 
Mr. John Deere invented the first commercially successful self-
scouring steel plow in 1837.
    Then using tools like the steel plow and its predecessors, 
horse- and mule-drawn implements, settlers opened vast acreages 
wherever they could plow. Over time, much of the less desirable 
land was subsequently removed from intensive agriculture 
production and reverted to livestock use, native vegetations, 
or in other ways became fallow. I believe that, as markets of 
biomass or feedstocks develops, farmers may find it ideal to 
concentrate on opportunities for growing biomass crops on land 
which is marginal for high input cost, low crop production, but 
could be ideally suited for dedicated perennial biomass crops.
    Let us touch just briefly on the lifecycle issues and 
greenhouse gas emissions as it relates to this topic. The RFS 
also required EPA Administrator to take into consideration 
lifecycle greenhouse gas emissions including all stages of fuel 
and feedstock production. I and my fellow agricultural 
producers have questions about how this requirement will be 
executed and what it will mean for our renewable fuel feedstock 
and food crop production. Proper implementation of this key 
component of the RFS is critical to the successful development 
of the cellulosic industry.
    In conclusion, I would like to reiterate my personal 
support for the Renewable Fuel Standard and increased 
production of renewable fuels, especially cellulosic ethanol. 
The RFS is essential to the continued growth of this industry. 
I would just emphasize that point, and I urge you to oppose, in 
the strongest possible terms, any effort to reduce its 
influence.
    Thank you, Mr. Chairman and Ranking Member, and I will be 
happy to answer questions at the appropriate time.
    [The prepared statement of Mr. Grant follows:]

 Prepared Statement of Duane Grant, Partner and General Manager, Grant 
  4-D Farms; General Manager, Fall River Farms; Vice Chairman of the 
              Board, Snake River Sugar Company, Rupert, ID
    Chairman Holden, Ranking Member Lucas and Members of the Committee, 
my name is Duane Grant. I farm 18,000 acres of wheat, barley, corn, 
potatoes and sugar beets near Rupert, Idaho.
    I appreciate the opportunity to testify here today on the expanded 
Renewable Fuel Standard (RFS) included as part of the Energy 
Independence and Security Act (EISA) and associated issues of interest 
to agricultural producers.
    Passage of the EISA has clearly put us on a path for renewable 
fuels to make up an ever greater share of our liquid transportation 
fuel requirements. The extended and expanded the RFS now calls for the 
blending into our fuel supply 9 billion gallons of renewable fuel in 
2008, increasing to 36 billion gallons of renewable fuels by 2022. Of 
this 36 billion gallon requirement, 21 billion gallons must be advanced 
biofuels, including cellulosic biofuels and biomass-based diesel.
Biomass Production
    I think some felt that with passage of EISA and other biofuels-
related legislation, farmers would be racing to plant switchgrass or 
other dedicated energy crops from fence row to fence row. Indeed, it is 
our hope that these non-food crops eventually provide significant 
feedstock for second-generation ethanol, along with agricultural 
residue like wheat straw.
    However, despite operating in a very risky business, farmers are 
generally a very risk-averse group. You're not going to see them 
rushing to plant any new crop that's never been grown on a commercial 
scale before in this country and has no direct market already 
established. Farmers like to work with what they know and while growing 
switchgrass or other dedicated energy crops may not be rocket science, 
it may well be soil science or some other cultivation issue that could 
crop up, so to speak, on a commercial scale. Current high prices for 
wheat and corn also incentivize producers to stick with what they know.
    This, of course, is a short description of the much-touted chicken 
and egg problem. Without adequate feedstock growing in the field, a 
refinery won't locate in a given location, and without a refinery to 
purchase the feedstock, growers will be reluctant to grow it.
    I believe this Committee and the Congress recognized this dilemma 
in the recently enacted 2008 Farm Bill's energy title with the 
establishment of the Biomass Crop Assistance Program. This program is 
designed to provide incentives to farmers and foresters to grow 
bioenergy crops in a sustainable manner in an attempt to address the 
issue of who goes first in the development of cellulosic ethanol. This 
program also provides an incentive for farmers to harvest, store and 
transport biomass to bioenergy facilities. I encourage you to urge 
quick implementation of this program.
Sustainability
    Central to many debates in agriculture these days is the idea of 
sustainability. Certainly this means different things to different 
people, but I would suggest the following as a working definition: 
sustainability means managing the use, development and protection of 
our natural social and environmental resources in a way and at a rate 
that enables people to meet their current needs without compromising 
the ability of future generations to meet their needs, Utilizing this 
definition requires that we recognize the interdependence between our 
economic, environmental and community needs.
    So the question is not whether we should produce biomass--or any 
other agricultural crop--in a sustainable manner, the question becomes 
how to find a balance between these often competing values. Imagine 
three overlapping circles--one representing our economic needs, one 
representing our environmental needs and one representing our social or 
community needs. The area where the three circles overlap is the area 
of sustainability--the area through which run all the elements of a 
good quality of life: a healthy, functioning natural environment; a 
strong economy with jobs and job security; and safe, secure communities 
where people have a sense of belonging and purpose and a commitment to 
each other. These elements--these threads which together weave the 
fabric of sustainability--are things we hold in common.
    Some may say that today these threads are beginning to fray and 
unravel in ways both large and small. This need not be the case. I have 
personal experience in an effort where the community came together and 
balanced the economic, environment and social interests for the greater 
good. The Iogen Corporation, a Canadian cellulosic ethanol 
manufacturer. has an interest in building a commercial-sized cellulosic 
refinery in southwest Idaho. Due to delays in getting a loan guarantee 
program established at the Department of Energy, the project is 
currently on hold, but the process those of us in our community have 
gone through to secure feedstock for the facility is instructive.
    The proposed Iogen facility would utilize primarily wheat and 
barley straw for conversion to cellulosic ethanol. We surveyed growers 
in the region and found that we were able to obtain somewhere between 
600,000 to 800,000 tons of wheat and barley straw under pre-production 
contracts. We determined that we could remove this tonnage and still 
retain enough residue on the ground to ensure continued organic matter 
in the soil to maintain soil productivity. From that standpoint, we 
believed that we could continue to provide feedstock to a facility that 
will consume 1,400 to 2,000 tons per day of this agriculture residue in 
a sustainable manner. All of this was accomplished in association with 
local community interests and local environmental interests.
    By the way, when finally built, this facility will produce between 
40 to 60 million gallons of cellulosic ethanol per year and provide 90 
full time jobs in addition to 500 construction jobs for 2 years, 100 
feedstock collecting jobs and 450 spin-off jobs. So we hit all three of 
my elements of sustainability--economic, environment and community 
needs.
Definition of Renewable Biomass
    I understand that the Committee has some concerns over how 
renewable biomass is defined in EISA and the general debate over the 
sustainability of renewable biomass production.
    As provided in the EISA, renewable biomass is defined as, ``Planted 
crops and crop residue harvested from agricultural land cleared or 
cultivated at any time prior to the enactment of this sentence that is 
either actively managed or fallow, and nonforested.''
    While I certainly appreciate the Committees interest in providing 
farmers with the best economic opportunity for growing biomass on any 
and all land they might have, it may be important to remember the 
history of farming and cultivation in this country when considering 
this definition. Farming and cultivation have occurred in this country 
since well before it became a country, but were revolutionized when 
John Deere invented the first commercially successful, self-scouring 
steel plow in 1837.
    Using tools like the steel plow and its predecessors, horse- or 
mule-drawn implements, settlers opened vast acreages wherever they 
could plow. Over time, much of the less desirable land was subsequently 
removed from intensive agriculture and has reverted to livestock, 
native vegetation or in other ways become fallow. I believe that, as 
the market for biomass feedstock develops, farmers may find it ideal to 
concentrate on opportunities for growing biomass crops on land which is 
marginal for high input cost row crops but often ideally suited for 
dedicated perennial biomass crops.
    Having said this, I find it interesting to note that the definition 
of renewable biomass contained in the recently enacted energy title of 
the farm bill seems to contain no such restriction to prior cleared or 
cultivated land. Perhaps USDA should be encouraged to work with the 
Environmental Protection Agency through Memorandum of Understanding or 
some type of joint rulemaking to harmonize the potentially competing 
definitions.
Lifecycle Greenhouse Gas Emissions
    The RFS also requires the EPA Administrator to take into 
consideration lifecycle greenhouse gas emissions including all stages 
of fuel and feedstock production. I and my fellow agricultural 
producers have questions about how this requirement will be executed 
and what it will mean for our renewable fuels feedstock and food crop 
production. For instance, how will these determinations be made at the 
farm gate level? Will lifecycle GHGs also be considered for non-
feedstock production? The answers to these questions have serious 
implication for crop production in this country, and we encourage you 
to continue to seek information and provide guidance as appropriate to 
the EPA as they undertake this process.
    And when it comes to agricultural residues, am I now going to be 
somehow penalized for growing a crop of wheat or barley? And if I 
decide to not sell my straw to Iogen, am I then off the hook?
Conclusion
    In conclusion, I would like to reiterate my personal support for 
the Renewable Fuel Standard and increased production of renewable 
fuels, especially cellulosic ethanol. We are already seeing positive 
effects from this homegrown fuel in an increased fuel supply that is 
keeping gas prices lower than they would have ordinarily been if we are 
reliant only on oil. Expansion of this industry has provided and will 
continue to provide important economic advantages to rural communities, 
in many cases revitalizing areas through value-added production. The 
RFS is essential to the continued growth of this industry, and I urge 
you to oppose in the strongest possible terms any effort to reduce its 
influence.
    This concludes my testimony, and I thank you again for the 
opportunity to be here today. I'm happy to answer any questions you may 
have.

    The Chairman. Thank you, Mr. Grant. Mr. Cassman.

       STATEMENT OF KENNETH G. CASSMAN, Ph.D., DIRECTOR,
   NEBRASKA CENTER FOR ENERGY SCIENCES RESEARCH; PROFESSOR, 
                   DEPARTMENT OF AGRONOMY AND
         HORTICULTURE, UNIVERSITY OF NEBRASKA-LINCOLN,
                          LINCOLN, NE

    Dr. Cassman. Thank you, Mr. Chairman. It is indeed a 
privilege to be here today. I have a PowerPoint presentation, 
and detailed testimony is given in the back of that handout 
that is available on site.
    We are going to pick up where Mr. Grant left off talking 
about the greenhouse gas emission standards in the 2007 EISA. 
And the proposal I would like to put before this Committee 
today, Subcommittee today, is that this is the first climate 
change legislation that will have teeth, and those teeth will 
first be used on agriculture as the guinea pig. And I think 
this is something that, unless we recognize it explicitly up 
front, we will be very surprised in the outcome.
    You have heard a number of people talk about what those 
standards are briefly. Starch ethanol, cellulose ethanol, 
advanced ethanol all have standards that they must meet with 
regards to reduction of greenhouse gases both direct and 
indirect effects. They grandfather existing plants for starch 
ethanol, but there will be an effect through the imposition of 
low-carbon fuel standards at the state level such that if corn 
ethanol is deemed not to meet those standards, blenders in 
California, for instance, would have to buy higher cost, low-
carbon intensity fuels to offset the use of corn ethanol 
blending in California. This would add cost to the use of corn 
ethanol in markets like California.
    So I want to make the case that it is critically important 
to get corn ethanol right. We will have plenty of time to work 
on the greenhouse gas standards for cellulosic and other types 
of second generation ethanol, but it will be immediately used 
on corn ethanol. So the focus when EPA goes forward must be on 
corn ethanol, getting that right, because it will effect how 
low carbon fuel standards are implemented in the states, not 
just California. The Midwest is looking at this, as well as the 
Northeast.
    It is going to effect the role of corn and agriculture in 
general in greenhouse gas legislation that is coming later 
perhaps in terms of offsets and credit markets. It will effect 
loans and risk assessment of different projects, and it greatly 
effects public perception about the role of agriculture in 
contributing to climate change.
    Now, it is important to use the best science and data. I 
would like to make the case here. More than 60 percent of all 
corn ethanol produced today is coming from ethanol plants that 
have been built since 2005. By next year, 75 percent come from 
plants built from 2005. Unfortunately, the way things are 
going, older data from before the massive investment in modern 
ethanol plants will be used for corn ethanol.
    And I just show these data here that we are finding that 
recent data shows that energy use in the ethanol plant itself 
is way down from what it was in older studies. For instance, 
the data used in the GREET model is being used by EPA and in 
California. And energy use in the ethanol plant is 30 to 35 
percent of total energy use. We are finding is it 25 to 30 
percent less than the data they are using, and this is actually 
data measured on the existing plants.
    The bottom line is you end up with, by our estimation using 
the BESS model, 54 percent reduction in greenhouse gases 
compared to what is being estimated currently by GREET of 24 
percent. If you add any indirect land use change carbon cost to 
the GREET estimate, corn ethanol will not make it in the 
California market. And it is likely to be worse in gasoline.
    So we have to then look ahead. How can we avoid getting in 
this situation with second generation biofuels? And the answer 
is we need to invest in the kind of research that achieves 
scientific consensus well before the large-scale 
commercialization. And this was a mistake made with corn 
ethanol. We are only guessing now rather than having real data 
from production-scale field research.
    And the rest of my testimony, which I won't have a lot of 
time to go through, provides information about the kind of 
research that is required to ensure that by the time we are 
ready to have large-scale commercialization and investment in 
second-generation biofuels, we have the data. Farmers can be 
assured, investors can be assured that there won't be second 
looks at the system and changing the numbers halfway through 
the game.
    This gives you an example of what research like this looks 
like. It has to be done at a production scale because the scale 
at which you conduct the research effects the answer you get. 
You do it in small scale research blocks, you get one answer. 
You do the same work at a large production scale, you get a 
different answer.
    That is largely because of the heterogeneity in fields. You 
get the small plots. And fortunately we have geostatistics, new 
methods to take account of this. We have new, exciting research 
methods to do scaling from single plants, plant communities and 
landscapes and regions.
    So in conclusion, my goal is two things. One to ensure we 
get the greenhouse gas emissions science and data right for 
corn ethanol. My fear is we are not doing it; although we do 
have tools that can do it. And second to invest properly, and I 
don't see it in current USDA research legislation or in DOE 
legislation, that we invest properly to ensure that we have the 
science and data to achieve a consensus on the contributions of 
second generation biofuels to greenhouse gas emissions. Thank 
you, Mr. Chairman.
    [The prepared statement of Dr. Cassman follows:]

  Prepared Statement of Kenneth G. Cassman, Ph.D., Director, Nebraska
     Center for Energy Sciences Research; Professor, Department of
 Agronomy and Horticulture, University of Nebraska-Lincoln, Lincoln, NE
    Mr. Chairman and Members of the Subcommittee, I appreciate the 
opportunity to testify on the state of current knowledge and knowledge 
gaps affecting implementation of lifecycle assessment (LCA) protocols 
to estimate greenhouse gas emissions (GHG) by different types of 
biofuels as required by the Energy Independence and Security Act of 
2007 (EISA). I believe that development of these protocols will have a 
large impact on the economic viability of both the biofuel industry and 
the broader farm economy.
    I am Dr. Kenneth G. Cassman, Director of the Nebraska Center for 
Energy Sciences Research, a position I have held since the Center was 
created in 2006. Previously I worked as a research agronomist in the 
Amazon Basin of Brazil, Egypt's Nile Valley and at the International 
Rice Research Institute in the Philippines. My academic appointments 
include 7 years on the faculty at the University of California--Davis, 
and 13 years at the University of Nebraska where I served as Head of 
the Department of Agronomy from 1996-2004. My research, teaching and 
extension efforts have focused on ensuring local and global food 
security while conserving natural resources and protecting 
environmental quality. My current research focuses on the environmental 
impact of biofuel systems, including development of lifecycle 
assessment tools for estimating the GHG emissions of corn grain-
ethanol, and cellulosic ethanol produced from corn stover or 
switchgrass.
    I come from a state where the long-term viability of the biofuel 
industry is a major driver of economic development, especially in rural 
Nebraska. In fact it is now one of the largest industries in the state, 
and Nebraska ranks second nationally in ethanol production. Nebraska 
also has an emerging biodiesel industry, and the Abengoa company is 
developing a pilot plant for cellulosic ethanol production in York, 
NE--a project partially supported by the Department of Energy. Like 
many regions of the country, Nebraska's entrepreneurs are looking at 
advanced cellulosic biofuels and considering their potential.
    My testimony will focus on three topics:

    (1) The importance of using the best science and most recent data 
        for establishing the methods and standards for GHG emissions 
        reductions of corn--grain ethanol systems compared to gasoline 
        in complying with the 2007 EISA, and how the lack of scientific 
        consensus about this issue can be addressed;

    (2) The need to achieve a scientific consensus on the environmental 
        impact and GHG emissions of second-generation biofuels, such as 
        cellulosic biofuels, before they are widely commercialized; and

    (3) The science required to ensure that such a consensus is 
        achieved for developing the lifecycle assessment methods and 
        standards for second generation biofuels.

    As you are well aware, EISA requires that:

   EPA establish methods and standards for assessing lifecycle 
        GHG emissions for different types of biofuels with the 
        comparable petroleum-based fuel as the basis for comparison;

   Starch-ethanol plants, such as those that use corn grain, 
        that came into production after 2007 must reduce GHG emissions 
        by 20% (existing plants are exempted);

   Cellulosic biofuels must reduce GHG emissions by 60%; and

   Advanced biofuels must reduce GHG emissions by 50%.

    Regulations for GHG emissions reductions are also part of the 
California Low Carbon Fuel Standards (LCFS), which will play an 
important role in determining the value of different biofuels in 
marketplace. Unlike the 2007 EISA, there are no exemptions for existing 
biofuel plants under the California LCFS. In addition to California, a 
number of others states are developing or considering the development 
of LCFS. Because it is important that EPA biofuel emissions assessment 
protocols be consistent with state-level LCFS, EPA has an opportunity 
to play a leadership role to ensure that the best science and most 
recent data are incorporated into these standards.
    There may also be opportunities for the biofuel industry to 
monetize GHG emissions reductions if they can be properly documented 
and certified for emissions trading markets both in the U.S. and 
globally. For example, several climate change bills under development 
include cap-and-trade provisions for GHG emissions. Developing 
scientifically robust, accurate, and user-friendly LCA assessment tools 
provide the foundation for inclusion of biofuels in a cap-and-trade 
emissions market.
    As we embark on the effort to develop LCA methods for estimating 
GHG emissions from different biofuels, it is imperative that the 
regulatory process ``get corn ethanol right'' for three reasons. First, 
corn grain-ethanol (hereafter called corn ethanol) is the only biofuel 
that will be directly affected by the EPA guidelines as soon as they 
are developed because it is the only biofuel that is available and used 
on a large scale. Present annual corn ethanol production capacity is 
approaching 9 billion gallons per year (bgy), and it will likely reach 
more than 12 bgy by end of 2009. In contrast, the 2007 EISA does not 
mandate use of more than 1 bgy of cellulosic ethanol until after 2013. 
Hence, EPA's guidelines for GHG emissions from cellulosic biofuels may 
be developed and refined over the next 4 years before cellulosic 
ethanol is commercialized on a large scale. Second, EPA's efforts to 
determine the degree to which corn ethanol reduces GHG emissions 
compared to gasoline may have a large influence on the development and 
implementation of state-level LCFS. In fact, if corn-ethanol is 
determined by EPA and/or state regulators to emit more GHG than 
gasoline, then corn-ethanol would fetch a lower price in LCFS markets 
as blenders must buy higher-priced low carbon-intensity fuels to offset 
the use of corn-ethanol. If this occurs, it would likely have a 
devastating impact on the U.S. corn ethanol industry and the farm 
economy. Third, the values set by EPA for GHG emissions of corn ethanol 
compared to gasoline will influence public opinion regarding the 
whether corn ethanol, and perhaps renewable fuels in general, are a 
positive or negative factor in addressing climate change concerns. It 
is not enough to say ``we have a process to adjust the number later,'' 
although EPA is required to do that as well. History tells us that 
public opinion will latch onto the first standard issued, and if the 
number is inaccurate, the public may lose trust in the LCA process 
itself and withdraw their support for further development of renewable 
biofuels because of concerns about environmental impact.
    Given this situation, we must learn from our experience with corn 
ethanol, where large-scale commercial production is well ahead of the 
science and knowledge required to develop accurate regulations 
regarding impact on GHG emissions. Instead, we must develop the 
scientific methods and forge a scientific consensus BEFORE producers 
start growing ``second generation'' biofuel crops on a large scale. 
Indeed, it may be difficult to entice producers to grow a second 
generation biofuel crop feedstock such as switchgrass if there is a 
risk that lifecycle GHG emission reduction levels will be changed at a 
later date such that they fall below the required 2007 EISA thresholds. 
What investor will invest many millions of dollars in a cellulosic 
refinery without knowing this information with a high degree of 
certainty?
    I believe our experience at the University of Nebraska-Lincoln to 
develop user-friendly lifecycle assessment software for estimating GHG 
emissions of corn-ethanol systems is instructive in this regard. Our 
goal was to bring together an interdisciplinary group of scientists to 
use the best available science and most recent data to ensure that the 
model accurately estimated the performance of corn-ethanol systems as 
they currently function. Our model is called the Biofuel Energy Systems 
Simulator (BESS Model), and it estimates the lifecycle net energy yield 
and GHG emissions of corn ethanol. It has the capability to simulate 
ethanol facilities at a state or regional levels, and also for an 
individual biorefinery, including: crop production, the ethanol 
biorefinery, and the cattle feedlot for feeding co-product distiller's 
grains. Systems that include an anaerobic digestion unit as part of a 
closed-loop corn-ethanol biorefinery can also be simulated. The BESS 
model is available to the public for download at www.bess.unl.edu.
    The BESS model performs three types of lifecycle analysis:

   Energy analysis--lifecycle net energy yield & efficiency;

   GHG emissions analysis--net carbon dioxide (CO2) 
        and trace greenhouse gases (CH4, N2O), 
        and global warming potential (GWP); and

   Resource Requirements--crop production area and total 
        amounts of grain, water, fossil fuels (petroleum, natural gas, 
        and coal) used in the production lifecycle.

    It is my understanding that EPA has been relying on a different 
model called the Greenhouse gases, Regulated Emissions and Energy use 
in Transportation (GREET) model from the U.S. Department of Energy's 
(DOE) Argonne National Laboratory. Unlike the BESS model which can only 
simulate corn ethanol systems, the GREET model has the capacity to 
evaluate and compare the environmental impacts of a wide range of 
renewable and conventional transportation fuels and motor vehicle 
fleets. While having the capacity to evaluate a wide range of different 
biofuels, as well as petroleum-based fuels, is critical to the EPA 
effort to meet the 2007 EISA requirements for establishing GHG 
emissions protocols, we believe the GREET estimates for corn-ethanol do 
not reflect the current status of the corn-ethanol industry.
    In fact, there are large differences in estimates of GHG emissions 
from direct effects of corn-ethanol production obtained from the BESS 
and the GREET models. While the BESS model estimates an emissions 
reduction of 54% reduction compared to gasoline, the GREET model 
estimates a 24% reduction, and this lower value is currently being 
proposed as the standard for implementing the California LCFS. It is 
our understanding that EPA is also basing their estimates of direct-
effect GHG emissions for corn ethanol on the GREET model. Because an 
additional amount of GHG emissions is likely to be added due to land-
use change, the GREET estimate will therefore result in failure of corn 
ethanol to meet the statutory 20% GHG emissions reduction standard of 
the 2007 EISA. The primary reasons for the greater GHG emissions 
reduction estimated by the BESS model is because it uses more recent 
data for crop production, biorefinery energy efficiency, and co-product 
use that the GREET model. As such we believe the corn-ethanol values in 
BESS are more appropriate for developing the 2007 EISA GHG standards. 
Moreover, unlike other LCA models including GREET, the BESS model was 
developed by an interdisciplinary team of scientists with expertise in 
agronomy, soil science, ecosystem modeling, engineering, and animal 
science, and the development effort included input from biofuel 
industry professionals. We believe that an interdisciplinary effort is 
critical for developing LCA protocols of biofuel systems.
    The ``cautionary tale'' to be learned from our experience with corn 
ethanol is that before second generation biofuels can become 
commercially viable, we need anticipatory research to accurately 
document GHG emissions and environmental impact. We at the University 
of Nebraska-Lincoln have a vision of how to make that happen, and it 
would involve a wide regional collaboration.
    For each biofuel crop, research must be conducted at a production 
scale to determine the impact of feedstock crop production system on 
greenhouse gas emissions, soil carbon sequestration, and on soil and 
water quality and wildlife. For example, besides unused woody biomass 
and sawdust from forestry systems, switchgrass is the next most likely 
commercially viable cellulosic biofuel crop. Therefore, we must 
identify the key knowledge gaps about the environmental impact of 
switchgrass systems and invest in research to close them.
    The University of Nebraska is developing research to support 
development of carbon intensity standards and certification protocols 
for switchgrass. While the environmental benefits of cellulosic ethanol 
production are estimated to be larger than for grain-ethanol, these 
benefits have not been validated in large production-scale field 
conditions that are representative of commercial production. Instead, 
to date most estimates have been produced by models and assumptions 
based on data from relatively small-scale research over relatively 
short periods. In fact, our initial investigations to date suggest that 
the direct-effect GHG emissions reduction potential of switchgrass is 
about the same as for corn ethanol unless switchgrass has a larger 
potential to sequester carbon in soil. Validation of benefits under 
production-scale conditions will help guide development of appropriate 
policies and markets and reduce risks to producers by helping to ensure 
that GHG emissions reduction estimates are based on the best available 
science.
    Therefore, for each promising biofuel, such anticipatory research 
would require the following elements:

   Production-scale research on environmental impact of 
        feedstock crop production systems, including GHG emissions, 
        soil carbon sequestration or loss, and impacts on water and 
        soil quality, other environmental services;

   Collaboration with industry to obtain the most recent 
        estimates of biorefinery energy efficiency and GHG emissions 
        from feedstock conversion to biofuel at a commercial scale;

   For indirect effects, more detailed understanding of complex 
        interactions that govern land use change is required through 
        development of appropriate econometric models, with strong 
        collaborative input from biophysical scientists; and

   Development of software tools that can be used to perform 
        LCA-GHG emissions assessments, and these tools must be widely 
        accessible, transparent, user-friendly, and based on best 
        available science published in refereed scientific journals.

    In summary, I realize that EPA is on a relatively short timetable 
to publish the proposed rule for comment this fall and the final rule 
in the spring 2009 as stipulated in the 2007 EISA. But it is imperative 
that EPA use the best science and most recent information in developing 
the LCA methods and standards for establishing GHG emissions from corn-
ethanol because not doing so could have significant negative impact on 
the biofuel industry and the farm economy in general. In contrast, the 
guidelines for second generation biofuels will not have immediate 
impact because these biofuels have not yet been commercialized on a 
large scale, which gives time to refine and improve the guidelines as 
commercialization proceeds.
    Finally, Mr. Chairman and Members of the Subcommittee, I want to 
commend you and your colleagues on the full House Agriculture Committee 
for recognizing the importance of developing the scientific tools 
required to support accurate lifecycle analysis by including it as a 
priority within the Biomass Research and Development Initiative of the 
new farm bill. This competitive grant program, jointly run by USDA and 
Department of Energy, includes a challenging set of nine objectives, 
including one on Energy and Environmental Impact, which specifically 
identifies ``improvement and development of tools for lifecycle 
analysis of current and potential biofuels.'' Mandatory funds were 
provided for this program in the amounts of $20,000,000 in Fiscal Year 
2009, $28,000,000 in Fiscal Year 2010, $30,000,000 in Fiscal Year 2011, 
and $40,000,000 in Fiscal Year 2012. It is my hope that additional 
discretionary funds are appropriated as well to ensure adequate funding 
research on environmental impacts of biofuel systems and development of 
accurate lifecycle assessment tools so that regulation does not once 
again precede scientific understanding with potentially negative 
consequences for on viability of the biofuel industry.
    Mr. Chairman and Members of the Subcommittee, I hope I've been able 
to provide some helpful information about the urgent need for the best 
available science and accurate data for determining the lifecycle 
environmental impact for the next generation biofuels, and about how to 
help ensure that this is accomplished. As a step in the right 
direction, it is imperative we get the numbers ``right'' for both corn 
ethanol and the second generation biofuels to come before significant 
investments are made by industry or producers. I am happy to answer any 
questions.


 Thank you, Dr. Cassman. Dr. McDill.STATEMENT OF MARC E. McDILL, Ph.D., 
                               ASSOCIATE
PROFESSOR OF FOREST MANAGEMENT, SCHOOL OF FOREST RESOURCES, PENN STATE 
         COLLEGE OF AGRICULTURAL SCIENCES, UNIVERSITY PARK, PA

    Dr. McDill. Thank you for giving me this opportunity to speak to 
you today about the potential use of wood biomass for energy. While 
much of what I will say applies at a national level, my expertise 
relates primarily to the northeastern U.S., specifically Pennsylvania, 
so my testimony will be informed by this regional perspective.
    First, allow me to tell you a little about the forest of the 
northeastern U.S. Forests cover roughly \2/3\ of the region. 
Furthermore, more than 85 percent of this forestland is privately owned 
with about 85 percent of that owned by families and individuals not 
associated with the forest products industry.
    With the exception of Maine, the vast majority of this forestland 
is naturally regenerated second, third, and fourth-growth hardwood 
forest. We have very little old growth and few plantations. The 
northern U.S. has an abundant supply of wood however. In fact, in the 
last 50 years, the net volume of growing stock on forestland in the 
northern U.S. has doubled.
    While the region produces some of the finest hardwood saw timber in 
the world, more than half of the wood in Pennsylvania's forest is 
classified as so-called low-use wood. Markets for this low-use wood are 
limited because we have a relatively small pulp and paper industry. 
Experts in sustainable forest management believe that improving markets 
for low-use wood, such as would exist with the growing biomass energy 
industry, will provide opportunities to better manage the regions 
forests.
    These markets will provide income for land owners to help offset 
management costs. They will make additional management practices, such 
as improvement thinning, commercially feasible. And they will reduce 
the incentives to high-grade forests. High grading is a practice where 
only the best trees are harvested, which degrades the species 
composition and genetic quality of the forest over time.
    Low-use wood is an abundant and underutilized forest resource 
wherever there is a limited demand for pulpwood. For example, when 
western forests are thinned to reduce fuels, huge piles of low-use wood 
are left behind to rot for lack of a viable market. Under current law, 
this low-use wood from Federal forests and also from the naturally 
regenerated forests that are common in the Northeast cannot be turned 
into fuel that counts toward the Renewable Fuel Standard targets.
    Frankly, it is difficult for me to understand the rationale for 
these restrictions. Despite the attention given to corn ethanol in 
recent discussions, wood is still the most important biomass energy 
feedstock in the U.S. Wood biomass is burned directly in heating 
systems for individual homes, commercial buildings, and institutions 
such as schools and hospitals. Wood is also burned directly or co-fired 
with coal to generate electricity.
    Right now, biomass-based energy is the primary alternative to 
fossil fuels for producing liquid fuels. When the promise of cellulosic 
biofuels is realized, Pennsylvania could replace \1/3\ or more of the 
gasoline used in the state with wood-based ethanol and other advanced 
biofuels.
    Of course, there is great uncertainty about how all this will play 
out. We don't know the true lifecycle greenhouse gas savings of using 
wood for biofuels. We don't know exactly how much low-use wood will 
really be available and at what cost. We don't know the extent to which 
private landowners will allow biomass harvest on their properties. We 
don't know exactly how growing markets for biofuels will change forest 
management practices, and we don't know the exact environmental impacts 
of removing more biomass during harvest.
    At Penn State, we are working to answer some of these questions. In 
particular, we are trying to carefully quantify biomass yields and the 
cost of harvesting, collecting, and transporting wood biomass based on 
actual field operations. We are also assessing the environmental 
impacts of these operations.
    Wood has obvious advantages as a biofuel feedstock. The U.S. has an 
abundant supply of wood biomass that is currently greatly 
underutilized. Better use of this resource could complement existing 
wood products industries and promote improved forest management. And 
unlike corn, using wood does not compete with food production.
    We must broaden the definition of cellulosic ethanol within the 
Renewable Fuel Standard to include at least low-use wood biomass 
harvested from natural hardwood forests and probably other things as 
well. But that is what I am particularly interested in from my state.
    Thank you again for giving me this opportunity to speak to you, and 
I look forward to answering your questions.
    [The prepared statement of Dr. McDill follows:]

  Prepared Statement of Marc E. McDill, Ph.D., Associate Professor of
 Forest Management, School of Forest Resources, Penn State College of 
               Agricultural Sciences, University Park, PA
    Thank you for giving me the opportunity to speak to you today about 
the potential use of wood biomass for energy. While much of what I will 
discuss applies at a national level, my expertise primarily relates to 
the northeastern U.S., specifically Pennsylvania, so my testimony will 
be informed by this regional perspective.
    Forests are the dominant land use in the northeastern U.S. Roughly 
\2/3\ of the region is forested. Furthermore, more than 85% of this 
forestland is privately owned, with about 85% of this private 
forestland owned by families and individuals not associated with the 
forest products industry. The vast majority of this forestland (with 
the exception of Maine) is naturally-regenerated second- or third-
growth oak-hickory and northern hardwood forests. The northern U.S. has 
an abundant supply of wood. Between 1953 and 2007 the estimated net 
volume of growing stock on forestland in the northern U.S. more than 
doubled, from 103.7 billion cu ft to 248.0 billion cu ft. USDA Forest 
Service Forest Inventory and Analysis (FIA) data indicates that 
Pennsylvania's forests alone contain 1,146 million green tons of 
biomass. (A green ton is equivalent to about half a ton of dry 
biomass.) More than half of the wood in the state has been classified 
as so-called ``low use'' wood. Due to a relatively small pulp and paper 
industry in the region, markets for this low use wood are limited.
    Most forest landowners and proponents of sustainable forest 
management believe that improved markets for low use wood--such as 
would exist with a growing biomass energy industry--would provide 
opportunities to better manage the region's forests. Such markets would 
provide additional income for landowners to help offset management 
costs; it would make additional management practices, such as 
improvement thinnings, commercially feasible; and it would reduce 
incentives to high-grade forests (a practice where only the best trees 
are harvested, degrading the species composition and genetic quality of 
the forest over time). Low use wood is abundant wherever there are 
forests and limited demand for pulpwood. For example, in much of the 
western U.S., material from thinnings done to reduce fuels, and hence 
the susceptibility of forests to devastating wildfires, is currently 
being collected in huge piles where it is typically left to rot for 
lack of a viable market. It is my understanding that much of this low 
use wood--from both the natural, private forests in the East and from 
western Federal lands--cannot currently be counted toward the Renewable 
Fuel Standard (RFS) targets. Frankly, the rationale for this is 
difficult for me to understand.
    A crucial advantage of biomass-based energy is that it currently is 
the most economical alternative to fossil fuels for producing liquid 
fuels. In spite of the attention given to corn ethanol in recent 
biomass energy discussions, wood is still the most important feedstock 
for biomass energy in the U.S. This is largely because the wood 
products industry has long been very efficient in its use of residues 
produced in sawing lumber and making pulp. Wood biomass can be burned 
directly in heating systems, for both individual homes and for 
institutions such as schools, hospitals and commercial buildings. Wood 
can also be burned to directly generate electricity or in combined heat 
and power facilities. And wood can be co-fired with coal to produce 
electricity. Wood pellets produced from sawdust are now a very cost-
competitive fuel for residential heating. When the promise of 
cellulosic biofuels is realized, Pennsylvania could potentially replace 
up to \1/3\ of the gasoline used in the state with wood-based ethanol 
and other advanced biofuels.
    There are, of course, many uncertainties about how all this will 
play out over the coming years. It is uncertain what the true lifecycle 
greenhouse gas savings are in these processes relative to fossil fuels. 
Another key question is how much low use wood is really available at 
what cost. There is some uncertainty as to how much of this low use 
wood there actually is, and few attempts to quantify this resource have 
even tried to accurately assess how the available amount would vary 
with different prices. Key factors affecting the quantity that would be 
available at a given cost include harvesting and transportation costs. 
However, an important related question that is even more difficult to 
answer is the extent to which private landowners would be willing to 
allow harvesting on their properties. Many surveys of forest landowners 
have shown that earning income from harvesting wood is a low priority 
for many of them. Also important is the question of how growing markets 
for biofuels will change forest management practices. Again, in many 
cases having these markets will improve forest management by providing 
additional income and paying for practices that are currently not 
commercially viable. However, increasing use of wood for biofuels could 
lead to shorter rotations and shifts from natural forests to 
plantations. To what extent will it be cheaper to simply grow wood in 
short-rotation biomass plantations (either switchgrass, or tree species 
such as hybrid poplar and willow)? What will be the environmental 
impacts of removing more biomass during harvests? Removing more biomass 
means removing more of the nutrients from the site and reduction of 
woody debris which provides important habitat. Also, more intensive 
harvesting practices could lead to soil compaction and more roads, 
further fragmenting already fragmented forests.
    The research we currently are doing at Penn State attempts to 
answer only a few of these questions. In particular, we are trying to 
do a better job of quantifying biomass and other product yields and 
harvesting, collection, and transport costs based on actual operations 
in the field. We are also planning to assess soil nutrient impacts and 
compaction. We are looking to expand this research to look at a larger 
set of the questions discussed above.
    I hope my comments have helped give you a broader perspective on 
the potential of wood as a biofuel feedstock. Wood has obvious 
advantages for such uses. First, the U.S. has an abundant supply of 
wood biomass that is currently not being used. Use of this resource 
could be complementary to existing wood products industries and promote 
improved forest management. And, unlike corn ethanol, using wood does 
not generally compete with food production. It is important to 
significantly broaden the definition of cellulosic ethanol within the 
Renewable Fuel Standard (RFS) to include wood biomass from all sources. 
Thank you again for giving me this opportunity to speak to the 
Subcommittee. I look forward to answering your questions.

    The Chairman. Thank you, Dr. McDill. I have a question I am 
not--anyone is going to want to answer, but all of you have 
identified the concern that we have had since the 
implementation of H.R. 6, the Energy Independence and Security 
Act and how parts of the country are going to be limited in 
being able to participate.
    Does anyone care to say what could have been the motivation 
of the people who were encouraging the change in that language 
that happened in the last minute? What were they trying to 
achieve? Ms. Wong?
    Ms. Wong. I think that they were trying to achieve 
environmentally sustainability. I thought that because it was 
done in a rush, maybe things did not turn out how they thought 
they would.
    The Chairman. Dr. Cassman?
    Dr. Cassman. Yes, I am struck in the deliberation of the 
Committee and the statements made by Members of Congress 
starting out this session. There seems to be a lack of 
communication, good communication between the Agricultural 
Committee and the environmental community, and you seem to be 
talking past each other.
    The Chairman. That is not new but----
    Dr. Cassman. And yet there is so much common ground that 
could be plowed. Another example is the language concerning 
indirect language change effects in greenhouse gas emissions. 
Clearly that was put in by the environmental movement with 
concerns about if we used every acre of land to produce 
biofuels not only in this country but globally.
    And it also occurs to me I have never heard anyone talk--
when you talk about indirect language change, the single most 
important thing we could do is focus tightly on accelerating 
the rate of gain in corn yields and other crop yields on 
existing land and do so at the same time while reducing 
environmental impact. It is a massive challenge.
    We have never done that in the past. We have increased 
yields but had negative environmental impact. And we can reduce 
environmental impact simply by reducing yields, reducing 
inputs. We have never done both at the same time, and so it 
seems to me there is a lot of common ground between the two 
groups, but there doesn't seem to be an honest broker effort to 
bring together and focus on the things that can make both 
groups achieve their goals.
    The Chairman. Anyone else care to comment? Mr. Grant?
    Mr. Grant. Mr. Chairman, it would be my observation as a 
producer and an individual involved with numerous associations 
that have dealt with this issue that there was perhaps a 
misperception on the part of the environmental community that 
producers, farmers, would be very quick to make the change. 
That they would use existing ground, ground that is currently 
in production and divert that ground to the production of 
switchgrass, other biofeedstocks, and then pass on the 
opportunity to produce conventional crops.
    In conversations we have had with environmental groups, we 
have maintained and repeatedly asserted that our producers 
simply aren't interested in that. That in the future when 
biomass crops become an economic reality, definitely we will 
look at those in the context of competing crops. But today we 
believe that biomass cellulosic production will evolve 
primarily using waste from production of existing crops. And we 
think that message just hasn't resonated with the environmental 
community, hence this language is our belief.
    The Chairman. Mr. Burke.
    Mr. Burke. Mr. Chairman, I think that the language does 
show the footprints of special interest, and I think that the 
language ignores a very valuable supply of low-value hardwood 
and other woody biomass that is geographically spread across 
our country.
    It also ignores many healthy forest practices that will not 
be incentivized or encouraged by very narrow definitions of 
particular types of thinning so----
    The Chairman. And all of us on this Committee are well 
aware of the need to change this definition. Ms. Herseth 
Sandlin has legislation, I believe other people do as well. But 
again all of you have mentioned this and the Chairman and 
Ranking Member had in their comments as well as Mr. Lucas and 
myself. But just once again for the record, if we do not change 
the definition of biomass, what regions of the country would be 
winners? What regions of the country will be losers? And who 
will be able to participate and not participate? Anyone care to 
comment?
    Dr. McDill. Well, clearly the northeastern U.S. is a big 
loser because again we have all of these hardwood forests which 
are naturally regenerated, and it would be very hard to include 
this in the definition of renewable fuels as it currently 
stands.
    Now, interestingly, it is exactly where you don't have 
plantations where you have the most low-use wood that should be 
available, which could be used and currently is underutilized. 
So the plantations exist where you have pulpwood markets, where 
you have a pulp mill, where you already have a market for that 
kind of wood. That is where you have the plantations.
    Where you don't have a pulpwood market, then that is where 
we have all this low-use wood. So the northeastern U.S. and 
also the intermountain West, where again, we have all of this 
material from thinning for fuel reduction treatments, which 
can't be utilized either under the current definition.
    The Chairman. Thank you. My time has expired. Mr. Lucas?
    Mr. Lucas. Thank you, Mr. Chairman. And since we have a 
group that represents insights from all over the country, let 
us just cut to the chase. Some of the groups that we have been 
discussing in a roundabout way are clearly paling, screaming to 
the top of their lungs that the renewable biomass restrictions 
in the RFS will help protect forests and wildlife habitat. If 
anyone on the panel would care to offer a comment or an opinion 
about whether that is an accurate statement on what you are 
aware or not, I would be very interested.
    Mr. Blazer. Mr. Chairman, Ranking Member, Members of the 
Committee, the problem that I have with that in regards to the 
fuel loads that we see in our western forests, looking at it 
from a watershed perspective, if we don't get these forested 
lands back in shape and get those fuel loads reduced, it is not 
going to be a good thing. Because we are going to have 
catastrophic fire. We are going to lose wildlife habitat. We 
have to get this thing turned around, the redefining of this 
definition is going to be critical for that.
    Mr. Burke. I do not agree with that statement. I don't 
think that a limited definition will, in fact, protect our 
forests or the wildlife habitat. I think the restriction is 
counterproductive to many valuable goals. For example, a 
healthy forest. Many thinning practices would be excluded from 
the definition, and these thinnings lead to healthy forests. 
They reduce fire risk. They decrease the risk of insect and 
disease damage. They provide for better trees and hence better 
habitat.
    Also a restricted definition is not open and inclusive with 
respect to markets, and this puts family forest owners at a 
disadvantage and may in fact result in conversions of 
forestland to other uses if the forestland cannot produce a 
fair rate of return.
    Finally, forests give us many advantages. Not only the 
fiber and the wood but watershed for water quality and wildlife 
habitat. So I think the limited definition is not protective of 
these values but in fact counterproductive.
    Dr. McDill. Well, as I stated in my testimony, having 
markets for low-use wood helps land owners manage their forests 
better. So from that perspective, the definition is 
counterproductive. Furthermore, it is also counterproductive 
because it could create incentives to convert natural 
forestland to plantations so that it would count under the 
current standard.
    So the best way to achieve sustainable forest management is 
not really through definitions, how we define renewable fuels. 
The best way is through other means of providing incentives and 
best management practice guidelines for landowners to help 
encourage them to manage sustainably.
    Ms. Wong. And on that note, I think that we would 
absolutely agree. The definition shouldn't be based on these 
distinctions of ownership. They should be based on management 
practices for forests. The RENEW NY will be using forests that 
are probably some of the healthiest forests in New York. 
Doesn't matter what their ownership is. It should matter how 
many bird species they have, what the water quality is. So I 
think we would absolutely agree with that.
    Mr. Lucas. Mr. Chairman, the panel has been very precise 
and clear. Thank you.
    The Chairman. The chair thanks the Ranking Member and 
recognizes the gentleman from Indiana, Mr. Donnelly.
    Mr. Donnelly. Thank you very much, Mr. Chairman. Dr. 
McDill, there are a lot of questions. What do you need to do to 
get answers? You said well, we have a question about this and 
we have a question about that. And what kind of resources do 
you need to get answers and how soon can we get those answers?
    Dr. McDill. Well, researchers tend to emphasize the 
uncertainties. I want to maybe say right up front that there is 
a lot that we do know. But there still--it is true that there 
is a lot of uncertainty. We need better support for research in 
addressing these kinds of questions.
    We need time to get some of these research activities going 
on the ground. We just got a research grant this spring, and so 
then it takes a little while to get research going. But 
basically we need the resources to do research to better 
understand what the lifecycle gains really are.
    We need research to look at how much is really going to be 
available. Basically we need--a lot of the data is actually 
there, and a lot of things we can look at. We just need time, 
and resources, to do the analysis.
    Mr. Donnelly. Okay, and then this is for anybody on the 
panel. My state has a lot of hardwood production, and in fact, 
every year we manage these forests. We take a lot of product 
out, and we have more acres of forest in our state now than at 
any time in the last 100 years. And so is there any reason why 
we can't take more biomass out and be able to manage it 
efficiently?
    It seems to be working at this time if we take more biomass 
out for fuel or whatever. The skills for proper management are 
in place, aren't they?
    Mr. Burke. I will be happy to address that. Virginia is 
similarly situated. We have much naturally regenerated 
hardwood. It is of good quality, and properly managed, it can 
be sustainably grown successive track after track. And it would 
be advantageous to have an additional market for the low-value 
hardwood so as to improve the residual stand. So we have a 
similar tract pattern in Virginia.
    Mr. Donnelly. And I read in The Economist a few weeks ago--
and I don't know how exactly correct they are. But they said if 
we used the biomass we have in this country on a renewable 
basis that will come back on a constant basis and not change 
anything, we could meet 65 percent of our petroleum needs in 
the years ahead. Does that seem reasonable to all of you?
    Dr. McDill. Well, as I stated in my testimony, the amount 
of wood in northern forests had doubled in the last 50 years. 
So we are currently not harvesting at the rate that the forests 
are growing. So clearly we could harvest more than what we are 
harvesting right now. Through better management, we could 
increase growth rates and harvest no more. Sixty-five percent, 
frankly, sounds a little bit high to me, but I think, as I said 
in my testimony, a third--at least in heavily forested regions 
like the Northeast, a third of our liquid fuels requirements 
could be met with cellulosic.
    Mr. Donnelly. And is a lot of this dependent on better 
cellulosic ethanol technology?
    Dr. McDill. We have Purdue in my state who is working 
almost nonstop on trying to develop the cellulosic ethanol 
technology. So my comment would be, and clearly representing 
production agriculture, we believe we have a key role to play 
on the cellulosic industry as it evolves, but also state right 
up front that we don't have the technology, just the practical, 
the fundamental technology that we need in place to effectively 
play in the cellulosic industry today.
    We don't know, for example, on a specific geographic 
region-by-region basis exactly how much biomass we can remove 
and maintain the soil health so that it is sustainable. The 
ability to do the research is there. It just simply hasn't been 
done with this end goal in mind. Our end goals have been driven 
by completely different factors, different motivations for the 
last 50 years that research has been done. So if, in fact, we 
are to be tasked with producing fuel to the level, Congressman, 
that you indicate, I believe we can rise to the challenge. But 
we will need some research to do that.
    Ms. Wong. I would absolutely agree, and I think that that 
is something that is critically important. We have talked about 
research needs. There was a billion ton study that was done by 
USDA and DOE, but it really needs to be done again and in a 
mode where we are looking at soil type by soil type and the 
different feedstocks that are out there. I think the important 
thing to point out is that there is a wide variety of 
feedstocks that we can use that are low value like the forest 
thinning, the municipal solid waste, that will not have a land 
impact. And I think that that is really important as we are 
looking at some of the environmental and climate effects that 
we have been talking about.
    Mr. Burke. If I might build on one of Ms. Wong's points, 
feedstock is key. There are three elements to a successful 
cellulosic production: feedstock, technology, and scale, 
facilities of scale. And if you get the feedstocks wrong, you 
have to start all over. And if you limit the available 
feedstocks with artificial definitions, you have started off on 
a bad beginning point.
    Mr. Donnelly. Thank you very much. And, Mr. Chairman, we 
have a golden opportunity here, as you well know, to use 
products from your state and my state to keep our funds here 
and our resources here instead of sending them over to another 
part of the world.
    The Chairman. I thank the gentleman. The gentleman from 
Nebraska.
    Mr. Fortenberry. Thank you, Mr. Chairman, for holding this 
hearing. Although Nebraska is the home of Arbor Day, we are 
generally not known for forest production. But nonetheless, 
since this is the topic at the moment--then I will pivot to 
another issue--I would just like to tell a story, Mr. Chairman.
    I was coming home from the airport recently, and along the 
side of the road was a huge pile of wood that was compost for 
some apparent development purpose, just burning. And I hadn't 
seen that in a very long time, and I just--the mental thought 
came to mind what a waste. And in terms of low-use biomass or 
woody pulp maybe perhaps being not the second but the third 
generation of cellulosic opportunities, I think we need to take 
a serious look at that. And I appreciate you bringing this up.
    I would like to go back to the discussion about the 
Renewable Fuel Standard and biofuels in general and to talk 
about some synergistic technologies that are greatly improving 
efficiencies that are important to add to this overall 
discussion. In order to know where we go, I think it is 
important to know where we came from. Just a few short years 
ago, 2005, we implemented the first Renewable Fuel Standard. We 
have expanded that this year, and in doing so, that was a very, 
very long arduous legislative fight, much of which took place 
before I got here.
    I thought it was a very important move to--remember we were 
trying to replace the pollutant additive in gasoline, MTBE, 
with something that would be more environmentally friendly. 
Corn was below $2 most of the time, looking for a way to expand 
our market for farmers and therefore save money on support 
programs in the government and help stabilize--help provide 
another opportunity for our farmers.
    And so this whole industry, which had been worked on, of 
course, for decades, but was launched in a very, very rapid way 
and now has tremendous potential to expand.
    Now, it is always important to look at policies to ensure 
that we haven't overreached and affording later-causing 
dislocations and unintended consequences elsewhere. But there 
are some important weddings of technologies that are going on 
right in Dr. Cassman and my backyard, one of which is a closed 
loop energy system in which a cattle field lot is co-located 
next to an ethanol plant: 30,000 head of cattle. The manure is 
captured from them, put into a methane digester, and then the 
surrounding farms, of course, bring the corn there for ethanol 
production. The distiller's grain byproduct is then fed back to 
the cattle. The phosphorus, by the way, is pulled out of the 
manure, which is the environmentally difficult component of 
manure, and sold as another product adding further value there.
    So in very simplistic terms, while we, of course, want to 
see the energy output-to-input ratio increase dramatically on 
traditional ethanol production, corn-based ethanol production 
with the underlying fuel sources, perhaps natural gas being 
less than 2:1. This plant, this closed-loop energy system moves 
that equation to 5:1 of output to energy input.
    Another plant in my district is Tide. Its energy source, 
the local landfill, and now supplants its natural gas usage by 
about \1/3\, which again is another way to calculate, improve, 
vastly improve energy output-to-input equations.
    There is a farmer in my district who has taken--he is a hog 
farmer. He has 8,000 head. He creates methane from a methane 
digestion pit. Now, he hasn't chosen to use that methane to run 
an ethanol facility, but he generates electricity on the spot 
with it and 8,000 head of hogs. And the power in their 
droppings, so to speak, creates enough electricity for 40 
homes.
    I bring all this up to not only--to add a dimension to the 
discussion of the overall development of biofuels as we look 
forward to this next generation of cellulosic sources that will 
decrease pressures on traditional grain sources and also 
hopefully improve efficiency. But also to think through the 
synergistic opportunities we have to co-locate inputs and 
outputs as well that will help secure and mitigate questions 
about the energy efficiencies of biofuels as we look to it as a 
component, just a component, in the overall portfolio of energy 
opportunities that we have in our country.
    So that is a speech not a question, Mr. Chairman, but if 
anybody would like to respond to that, I would welcome 
comments.
    Ms. Wong. I would actually like to respond to that. I am 
really happy that you brought up the historic reasons why this 
country has looked at renewable fuel. I think it is also going 
to look at what that could mean for woody biomass. We really 
need to increase that value of woody biomass because our 
forests are disappearing. Thirty-one million acres could 
disappear by 2040 because of urbanization in the Southeast. We 
need to keep forests as forests for water, wildlife, carbon 
sequestration, several other reasons.
    So I think providing value to agriculture products is 
extremely important and will be very important. But it is the 
same thing for woody biomass. So I think that is one of the 
reasons why we need to make sure that this definition will be 
very inclusive when it comes to that.
    Mr. Grant. If I could, I would appreciate if the context of 
the holistic system as you referred to--and I think it is 
important to point out a couple of key issues there. I am 
familiar with methane digesters because we actually have a 
dairy and have one there. And one of the drivers are regulation 
and the need to deal with the phosphorus, as you mentioned, and 
that system helps to accomplish and meet the demands of that 
driver.
    So I bring that up only to illustrate the point that we 
have an RFS which is serving as a driver for ethanol at large 
and to a large extent also for cellulosic. We are not sure yet 
how the cellulosic history is going to evolve, but certainly 
the most likely first plants will be plants that are built in 
these closed-loop type systems where you have the resources 
already there within a very close geographic location.
    Freight in a cellulosic system is extremely important, and 
if we try to gather up resources from around the country, the 
efficiencies disappear. So it is just extremely important 
that----
    Mr. Fortenberry. Well, if I could interrupt for a moment. 
Mr. Chairman, could----
    The Chairman. Please.
    Mr. Fortenberry.--you indulge me for an additional moment? 
I think that is important in pointing to the opportunity we 
have, and my comments were already toward this as well to think 
about smaller scale distributed generation of this opportunity. 
Use what we have considered waste rather than burning it on the 
side of the road or having problems with spreading it too thick 
on fields to pouring that in to again innovative, 
technologically sophisticated operations that may be, as we 
develop it smaller in scale so that they become common on even 
a regular, midsize working farm.
    Our closed-loop system, I should point out, is on hold at 
the moment. We are looking forward to getting it back going, 
but it is very, very innovative.
    Mr. Grant. Congressman, I will make my point. The RFS is a 
driver. Investment is responding to that as a driver. I think 
we need to be careful as the Committee--I guess I would 
encourage the Committee to be careful in advocating quick 
changes to the RFS because there are investments taking place 
built on that driver today. And we will have plenty of time in 
the future to fine tune where we go.
    Mr. Fortenberry. Dr. McDill?
    Dr. McDill. Yes. I just wanted to say that you are 
absolutely right. The situation is changing really rapidly, and 
new technologies are coming online. And some of the things that 
we were hopeful might be really good are turning out to not be 
so good. So I think it is really critical to have some 
flexibility, and having the kind of restrictions in the biomass 
feedstocks that are in the law right now is exactly the kind of 
thing that makes it difficult to have the flexibility to 
develop a lot of these new kinds of technologies.
    Mr. Fortenberry. Thank you, Dr. McDill.
    The Chairman. The gentlewoman from New York.
    Mrs. Gillibrand. Thank you, Mr. Chairman. Thank you all for 
coming to testify. I very much appreciate your expertise and 
your commitment to these issues. I want to talk a little bit 
about the Northeast and what you think will happen. First, if 
the rule isn't changed and the definition isn't changed, and 
then, second, if it is changed to allow for--excuse me--to 
allow for the use of woody biomass particularly from our 
forests through management of our forests.
    In particular, if they don't change the rule, will we not 
be able to use our forest for cellulosic ethanol under the 
current legislation that the House has passed?
    Dr. McDill. You know my understanding is it is probably 
going to happen even if you don't change the rule. It just 
won't count.
    Mrs. Gillibrand. The market today, because I come from 
upstate New York where we have the Adirondack and the 
Catskills. We have massive beautiful natural resources that 
with good stewardship practices and good forest management we 
will have enormous availability for cellulosic ethanol 
production. And we are hopefully having a cellulosic ethanol 
plant being built right now in the Port of Albany that could be 
easily used to develop that fuel source.
    So what I would like some more analysis on is if the rule 
isn't changed, is it going to stifle investment? Or do you 
think the horse is actually out of the barn and we will have 
investment and this will be one of the future fields that we 
use? Will we be able to use woody biomass and forestry 
management in the Northeast as a real alternative fuel?
    Dr. McDill. I think it is going to happen whether the rule 
is changed or not, but certainly it doesn't help. The current 
rule doesn't help. So it certainly would help to change the 
rule. I think you would see faster development than what would 
happen with the rule that is there right now. But the economics 
are driving it as much as the policy, and it is going to 
happen. We are building a cellulosic ethanol plant in 
Clearfield, Pennsylvania near State College where I live so 
these things are coming online. But certainly it would help if 
we would change the rule.
    Ms. Wong. I would definitely agree with that. I think one 
of the issues that we have right now is that we have several 
companies out there, and EESI just released a fact sheet that 
there could be 55 different biorefineries in 31 different 
states in the next couple years.
    But what the rule does is that, first, it is going to limit 
innovation. And for the companies that are still trying to site 
facilities or figure out where there might be the appropriate 
feedstock, they might decide that the Southeast might be better 
because of this or the Northwest might be better because of 
that.
    And so this definition is really important because there 
are certain things that are basically excluded. So the 
Northeast, because of the naturally regenerated forest there, 
might have a very difficult time getting a biorefinery to 
actually site there.
    Mr. Burke. I think the preferred approach would be a 
legislative change to simplify the definition because where we 
are going to end up without that is unnecessary complexities as 
this unclear language leads to regulations and rule making. And 
then you are going to have disputes and complexities as the 
laws and the regulations are tried--we try to implement them on 
the ground. And there is going to be litigation, trial court 
litigation and appellate court litigation over what these words 
meant in the statute and in the rules. And then we were going 
to look back, and we are going to say that was a great law. Why 
didn't it work?
    Mrs. Gillibrand. Right.
    Mr. Burke. I think it would be better for the definition of 
renewable biomass not to be the reason it didn't work.
    Mrs. Gillibrand. Correct.
    Mr. Burke. And the simple fix is legislative.
    Ms. Wong. I think the other thing that is extremely 
important is that, as has been said this definition came up at 
the last minute. There are several other different definitions 
for biomass, renewable biomass, open loop and closed loop 
biomass that are already in public law. I think that this would 
set a very bad precedent for further legislation. And I think 
that that is going to be really important as we look to develop 
a biomass industry in the United States.
    Mrs. Gillibrand. And the other aspect of the rule and the 
law that I want you to touch on is, in the Northeast we have 
about 17 percent of public lands, and the rest is privately 
held. And the rule now requires it to be privately held. I 
think it would make an enormous difference because we do have 
the Adirondack Park, and we do have enormous land in the 
Catskills under conservation. But for the management practices 
that we would normally use to take out dead wood and to make 
sure that the forest is healthy, we could use that feedstock as 
well.
    So that would be another area where I hope you will focus 
on your advocacy because I think it is very important that we 
have all the forests eligible.
    And the last thing I wanted to address--I am out of time. 
Thank you, Mr. Chairman.
    The Chairman. The gentleman from Kansas.
    Mr. Moran. No questions at this time.
    The Chairman. Okay, the gentlewoman from Kansas.
    Mrs. Boyda. Thank you, Mr. Chairman. And would you like 
to--I will yield to you a minute. My friend from New York, did 
you want to ask your final question?
    Mrs. Gillibrand. Yes, I just wanted to ask what is the rate 
of percentage of input versus output ratio for woody biomass--
if you say corn-based ethanol is 1:1, maybe 1:2. Is woody 
biomass, based on wood pulp, 1:10? What is it? What is the 
ratio?
    Dr. McDill. There is a lot of uncertainty about that 
number, but if I were to give you sort of a best estimate, I 
would say 1:4.
    Mrs. Gillibrand. One to 4. Thank you.
    Dr. Cassman. I would like to just comment on that, 
Congresswoman. I think the danger there is that you are 
comparing a hypothetical system with an actual system. You have 
to be very careful. What we are finding with cellulosic ethanol 
from switchgrass, where we are starting to get some numbers, is 
that the numbers are falling down. And it falls down as you 
scale up, and it looks like the cellulosic ethanol from 
switchgrass, the key is going to be whether or not it 
sequesters carbon. And if it doesn't, it is going to be not 
much better than corn ethanol. So I would be very careful about 
comparing hypothetical with actual.
    And corn ethanol is much better than--again if you use 
numbers from the current majority of ethanol plants built since 
2005 that are going to be producing the vast majority of our 
total ethanol from corn, the number is closer to 1.8. And if 
you do things, as Congressman Fortenberry said, the innovations 
that will come will put it well over two.
    Mrs. Gillibrand. So 1-2? Okay, thank you.
    Mrs. Boyda. Yes, I just had a couple of quick questions, 
and you might have spoken about this earlier, but when do you 
think the cellulosic could actually be commercially viable for 
either switchgrass or for woody mass, anyone?
    Ms. Wong. Well, as I just mentioned, we just put out a fact 
sheet from several months of research on different cellulosic 
biorefineries that have been looking to commercialize these 
different technologies: 55 different ones are saying that they 
are interested in moving forward, 31 different states.
    There are several companies that have already received 
grants from DOE, from states that are ready to move forward 
whether or not that is a demonstration plant, a power plant, or 
a commercial facility. There were six commercial facilities 
that were awarded grants in 2007 by DOE. Four of them right now 
still exist and are trying to move forward. Range Fuels, for 
example, in Georgia should be up and running, I believe, by 
2009. It might have been pushed back to 2010. That would be a 
commercial facility around 20 million gallons.
    Let us just say that if all 55 of these biorefineries are 
able to make it forward, from looking at all the information, 
there could be up to 630 million gallons of cellulosic biofuels 
in the next 2 to 3 years. But, it really is going to depend on 
what happens whether----
    Mrs. Boyda. So you are saying that the first possible one 
might be up in 2010?
    Ms. Wong. Well, it has already started construction, which 
is the first one in the United States commercially. So my 
understanding is 2009 to 2010 it will be in production.
    Mrs. Boyda. I get that question a fair amount as you can 
imagine. People are curious. They just want the information. Do 
you think then if we didn't include this woody mass, can we 
meet the RFS without it? Do we have to have it? Are we on 
schedule if on the best of all possible roads, is it going to 
happen?
    Ms. Wong. I think it might be very difficult.
    Mrs. Boyda. Does anyone disagree with that? So I guess what 
I am asking is there room for everybody in the market? Is it 
for all players? What----
    Ms. Wong. I think one of the important things is that for 
individual communities that have a biomass resource that they 
can use in a sustainable way, why should we limit them when 
they have the opportunity to participate in that market?
    Mrs. Boyda. Can I just ask one more quick question too? 
Just technology wise, would a plant that is able to use 
switchgrass also be able to use--could they go back--feedstocks 
could be the same; or are they different? That is yes, they 
can?
    Dr. Cassman. In the initial phases, they will be fairly 
specialized. Later, I think the Holy Grail is to get a 
cellulosic ethanol system that could chew up anything.
    Mrs. Boyda. We have a 2\1/2\ mile log jam on one of the 
rivers that is causing a lot of problems, and I just wondered 
if that was a hope that might be out there sometime.
    Dr. Cassman. Not in the short term.
    Mrs. Boyda. All right. Thank you so much. I appreciate your 
testimony.
    The Chairman. I thank the gentlewoman and recognize the 
gentleman again.
    Mr. Moran. Thank you, Mr. Chairman. A follow up to the 
gentlewoman from Kansas's question. Mrs. Boyda is correct. We 
are often asked about the potential of cellulosic ethanol and 
mostly in regard to a timeframe. And I wanted to see if I could 
get a clearer understanding of when that is. There are lots of 
proposals out there. Is there a particular technology or 
product that holds the highest promise? And under the best of 
scenarios, is this something that--will we see a significant 
cellulosic ethanol component to our energy mix in the next 
year, the next 2 years, the next 5 years, the next 10 years? 
What do we see developing over the next decade?
    Dr. Cassman. A quick answer is that it depends what you are 
asking in terms of volume. If you are talking 1 billion gallons 
a year, 10 billion or the 20 that is required under the 
Renewable Fuel Standard. It is going to take 5 to 10 years to 
get up to the billion gallon level.
    And the biggest challenge is not the science and technology 
in the conversion process. It is the science and technology of 
the harvest, storage, and transport of large bulky material and 
the quality control therein. These are the things that really 
are not getting a lot of attention in the whole program and 
system; and the infrastructure therein of how you handle it.
    Mr. Moran. That is interesting because I think the 
difficulty we face in ethanol, in corn-based ethanol today is 
more related to infrastructure than it is related to the 
process. Let me ask would we then be unable to meet the 
Renewable Fuel Standard in your opinion, in your estimation, as 
required for cellulosic ethanol?
    Dr. Cassman. As we are currently going and funding, yes.
    Mr. Moran. My guess is we knew that actually when we 
created the standard.
    Dr. Cassman. Right, but you are making major steps here, 
and everyone assumes that as successes are found, as we go 
along--55 plants you mentioned. No two of them have identical 
technologies, and so you are in this incredible race to sort 
through options. And that gets back to this question of what is 
the ratio of energy. It depends on what the final winners are 
in this technological race to see which kinds of second 
generation ethanol are going to win.
    Mr. Moran. What is the consequence to starch-based ethanol 
with the development of cellulosic? Does one replace the other?
    Dr. Cassman. Tell me what the price of oil is when this 
occurs because it depends on the price of a barrel of oil. 
Right now, even without the subsidy, corn ethanol is a viable 
enterprise.
    Mr. Moran. Yes, sir.
    Mr. Burke. Let me comment or respond. I think that woody 
biomass should be a player in this. Without it, we are unlikely 
to meet the goals for the standard. Unlike corn, the feedstocks 
that come from the forest are different and in many instances 
locally unique. And therefore the local supply means that they 
will be readily available where they are needed, and we need a 
definition to permit and incentivize those locally available 
woody biomasses to feed into this important renewable energy.
    I don't think it is an either/or. I think it is a both, and 
we have to step up and provide it.
    Ms. Wong. And furthermore on that note, it already has an 
infrastructure. Woody biomass has been used. There are roads. 
There are facilities that can be converted. There are co-
location type technologies that you can use. So woody biomass 
has that incentive as well.
    Mr. Moran. Okay.
    Dr. McDill. Can I say something?
    Mr. Moran. Yes, sir.
    Dr. McDill. The potential for woody biomass, I believe, is 
much greater than for corn. I think with corn we are already 
hitting some limits because corn, first of all, competes with 
food. So it drives up the cost of food. Also corn requires 
relatively good quality soils whereas woody biomass or 
cellulosic biomass from say switchgrass can be grown on much 
lower quality types of lands.
    And so I believe in 10 years we will be producing a lot 
more ethanol from cellulose than we will from corn because of 
the--we will be able to scale it up a lot further than we can 
corn.
    Mr. Moran. As you all know, two states, particularly the 
Texas Governor has requested an alteration, a moratorium, on 
the Renewable Fuel Standard. If the EPA, which has now put this 
issue--they delayed an answer to this issue. If EPA would 
decide to do that, are there consequences to the development of 
new technologies? One of the arguments I would hope that EPA 
takes into account that an alteration of that Renewable Fuel 
Standard probably reduces the likelihood that we move in 
different directions, new directions, the woody biomass 
cellulosic. Is there not a consequence to a different 
generation of ethanol in changing that standard?
    Mr. Grant. Congressman, if I could quickly comment. I would 
tell you that without equivocation on the part of the 
Administration in administering previously past laws that would 
have given a loan guarantee to Iogen, we would have ground 
broken in Idaho on an Iogen facility today.
    So that directly relates to your RFS question. Yes, 
equivocation on the RFS will serve to shuffle capital away from 
investment in this technology. We very much believe that.
    The Chairman. The gentlewoman from South Dakota.
    Ms. Herseth Sandlin. Thank you, Mr. Chairman. I thank all 
of you for your written testimony and your testimony here today 
and answering so many questions. I have a number of questions 
that I know I won't have time to get through, but I will submit 
to you in writing for the record if you could get back to me.
    But I do want to pursue an area, Dr. Cassman, as it relates 
to the potential of American agriculture as it relates to 
reducing greenhouse gases and carbon sequestration. Your 
written testimony states that with respect to each biofuel 
crop, research is needed at the production scale to evaluate 
the effect of the feedstock crop production system on 
fluorocarbon sequestration. And it also suggests that a key 
question in determining whether switchgrass promises greater 
direct effect greenhouse gas emissions reduction in corn 
ethanol is whether the switchgrass could sequester greater 
amounts of carbon.
    So if you could please describe for the Subcommittee in 
greater detail the state of the science on fluorocarbon 
sequestration and what is needed for us to accurately evaluate 
the overall role American agriculture producers can play in 
reducing greenhouse gases through carbon sequestration.
    Dr. Cassman. Well, Congresswoman, you have asked a very 
important question because the example of carbon sequester is 
very illustrative of what can happen when you don't have good 
science in place.
    For example, right now on the Chicago Climate Exchange, we 
are selling carbon credits for farmers who agree to do no-till 
and continue that practice for some time. But the science upon 
which that was based was very shaky. It wasn't based on direct 
measurement. It was based on experiments, long-term experiments 
that weren't set up to ask that question. And now what we are 
finding in recent publications and prestigious journals show 
there is no carbon sequestration with no-till--very 
interesting. And it is again a consequence of not having done 
and invested in good, high-quality, production-scale research 
when you take into account how systems actually operate.
    So I see the same thing happening. Now, that doesn't mean 
that no-till is not a good, favorable practice. There are huge 
benefits from no-till in terms of impact on wildlife, in terms 
of water retention, in terms of soil till structure, and in 
terms of less energy use in the systems. So there are 
tremendous benefits. But it is not sequestering carbon.
    I think the same thing is going to be true for switchgrass. 
That is when you look at the existing literature, it is all 
over the place. And it looks to us like it is the fundamental 
key to whether this system is going to be massively positive in 
terms of its impact on greenhouse gases.
    And we could have the answer for you in 2 to 3 or 4 years 
if we get cracking, but what I don't see if the commitment to 
fund research that gets at--that actually measures things. We 
are relying far too much on models and back-of-the-envelope 
estimates.
    Ms. Herseth Sandlin. If I may----
    Dr. Cassman. Yes.
    Ms. Herseth Sandlin.--interrupt. Mr. Moran and I have been 
working with a number of our Agriculture Committee 
organizations and other membership organizations as it relates 
to sort of planning for and preparing to comment and influence 
potential climate change legislation. What role do you see for 
these agricultural organizations planning? And what can we do 
as a Subcommittee or full Committee working with the Executive 
Branch to accelerate and target the type of research to get 
these accurate measurements that can ensure that American 
agriculture can be a participant in a carbon cap-and-trade if 
indeed we adopt that type of system.
    Dr. Cassman. And that is the key long-term strategic issue 
here. It is much bigger than biofuels. And the key to me is 
what the environmental groups have done by bringing in things 
like indirect land use change is really a benefit long term to 
agriculture in a sense because it recognizes that high-yield 
scientific agriculture on existing farmland is the key to 
preventing indirect land use changes in places like the Amazon.
    And so we can start working with them. Say yes, this is 
common ground. So research should focus on scientific means and 
documentation, validation, and models. How do we double yields 
on existing farmland and reduce the environmental impact of 
agriculture? Ask that single question. Demand that it be done 
at a production scale, and you have solved the food versus fuel 
issue. You have solved the greenhouse gas issue, and you have 
put us back on a path to finding answers that will get us 
forward.
    Ms. Herseth Sandlin. Thank you very much. Dr. McDill?
    Dr. McDill. Yes, I just want to say that oftentimes 
policymakers want and need numbers really quick, and no matter 
how much money you throw at a research question, when you want 
numbers really quick, the way they tend to get developed is you 
pull numbers out of the literature. And so that is exactly what 
Dr. Cassman was talking about. When you look at a lot of the 
existing studies, people have taken models and thrown numbers 
out of the literature, into those models with very little 
validation that goes on.
    Frankly there isn't much substitute for time and long-term 
study. So that kind of modeling is critically important for 
getting answers to policymakers really quick, but there is a 
tendency then, once we have a number, to say okay, we have the 
number. Let us just move on.
    It is also really critical to fund more long-term research 
to actually look at what is going on on the ground and to do 
careful measurements and update those numbers and revisit those 
numbers over time, which almost never gets done.
    Ms. Wong. But until you have that information, we already 
have a feedstock that has been excluded. We have the thinning 
materials, the restoration materials that are basically being 
left in the forest or are being burned in fields that are being 
excluded.
    So that information is extremely important, but this 
definition is already excluding things that we have right now 
that are low-carbon and low-value.
    Ms. Herseth Sandlin. Well, my time is up, but, Ms. Wong, I 
appreciate that comment because it sort of goes to my other 
area of concern here with what we have done in the short term 
that hamstrings our efforts. I think we can address both energy 
security issues, as well as positive environmental issues for 
the health of our forests; but also for energy diversity with 
cellulosic biofuels.
    So I appreciate your insightful responses to my question, 
and we look forward to working together with you to work 
through this issue of carbon sequestration, the type of 
information we need. But, Ms. Wong, since votes haven't been 
called and the Chairman is giving me the green light, let me 
just ask a quick question of you. And you may have answered 
this already, and I think I know generally where the Institute 
is in trying to figure a way through where we are now.
    Your written testimony notes with regret that the 
definition of renewable biomass included in the 2007 Energy 
Bill rules several feedstocks ineligible, as you just 
mentioned, including thinning materials and woody residues from 
Federal forests, some woody feedstocks from private forests. So 
as you know I too want to see that definition changed and 
improved, and I have introduced the legislation to do that. And 
I am also open to discussion, however, about how to best 
accomplish that goal. It is not my bill or nothing. I am open 
to figuring this out so that my constituents and folks across 
the country that can benefit both economically and 
environmentally from developing biomass can do so.
    And I guess I am wondering what you see as sort of the key 
in developing a consensus on improving the definition of 
renewable biomass to widen it to include woody biomass 
feedstocks that qualify under the RFS. Have you had discussions 
with other organizations focused on sustainability, focused on 
other issues important to this definition that you can see that 
there might be a key or two to developing that consensus 
separate from what some want just in a regulatory environment 
and what some of us want as a legislative fix in bills that 
have already been introduced?
    Ms. Wong. That is a very good question. So first of all, I 
think what this Subcommittee is doing right now is extremely 
important because it is really highlighting the issue of what 
the feedstock really is. I can congratulate everyone on that.
    It is difficult to say. EESI has been involved or has been 
leading a dialogue for a year now on bioenergy from forests, 
and it is very difficult to get consensus around this 
definition. And I really look forward to working with both you 
and all the other Members on this definition.
    I think what is really key is to really look at the 
performance of the fuel that we are trying to get at. I think 
that the arbitrary distinctions are not working, but I don't 
know if I have really unlocked it yet. So I look forward to 
talking with you more about that.
    Ms. Herseth Sandlin. I appreciate that. Yes, Mr. Burke.
    Mr. Burke. Let me offer insight but not necessarily the 
key. I think the local nature of the forest-based renewable 
resource is key because it avoids the transportation costs, and 
that is an important component in finding that key or solution 
to opening the definition to be more inclusive.
    Ms. Herseth Sandlin. That is a very good point. Thank you. 
Thank you all very much. Mr. Chairman, I appreciate it. I yield 
back.
    The Chairman. I thank the gentlewoman, and the chair thanks 
the panel for your testimony and your participation today as 
well as all the Members of the Subcommittee. Under the rules of 
the Committee, the record of today's hearing will remain open 
for 10 days to receive additional material and supplementary 
written responses from witnesses to any question posed by a 
Member of the panel.
    This hearing of the Subcommittee on Conservation, Credit, 
Energy, and Research is adjourned.
    [Whereupon, at 12:15 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Letter from Hon. Jerry Moran, a Representative in Congress 
                              from Kansas
June 19, 2008

Hon. Stephen L. Johnson,
Administrator,
U.S. Environmental Protection Agency,
Washington, D.C.

Dear Administrator Johnson:

    On April 25, 2008, Texas Governor Rick Perry submitted to the 
Environmental Protection Agency (EPA) a request for a 50 percent waiver 
of the 2008 Renewable Fuel Standard (RFS) implemented by the Energy 
Independence and Security Act of 2007. Although significant challenges 
face the agriculture and ethanol industry in meeting the goals of the 
RFS in the future, I ask that you deny Governor Perry's request. A 
waiver of the RFS in 2008 is premature and unwarranted under existing 
law.
    The Energy Independence and Security Act of 2007, Public Law 110-
140, amended section 211(o) of the Clean Air Act to require that 
gasoline in the United States contain at least 9 billion gallons of 
renewable fuel in 2008. It also amended section 211(o)(7) to expand the 
circumstances when the Administrator of EPA may waive the requirements 
of the RFS. Section 211(o)(7) allows the Administrator to waive the RFS 
in a given year if the Administrator determines the RFS would 
``severely harm the economy . . . of a state . . . .''
    Governor Perry's request that the RFS ``is unnecessarily having a 
negative impact on Texas' otherwise strong economy'' by its own words 
falls short of the severe harm standard articulated in Clean Air Act. 
Severe harm was intended to be high threshold. Although it is 
undeniable the RFS has and will continue to put upward pressure on the 
price of corn, the conclusion that ethanol is the primary cause of the 
recent increase in food price is inaccurate. Ethanol production 
generated by the RFS has helped reduce the price of gasoline by as much 
as fifteen percent according to a Merrill Lynch analyst and 29 cents to 
40 cents per gallon according to an Iowa State University study. The 
RFS will also serve as a catalyst to encourage production of the next 
generation of biofuels like cellulosic ethanol.
    A significant cause of the increase in food prices is the 
escalating cost of energy. According to U.S. Department of 
Agriculture's Economic Research Service (ERS), from 1999 until May 
2008, the food commodity index rose 98 percent, while the oil index 
rose 547 percent. In addition, the weakened U.S. dollar, increased 
global food demand, global crop production shortages caused by weather 
related disasters, and protectionist trade polices of other nations 
have led to worldwide food inflation.
    ERS reports that only \1/3\ of retail food products use corn as an 
ingredient. It also states that an increase in the price of corn is 
passed through to retail food prices at a rate of less than ten percent 
of the increase in corn price. When this data is considered together, 
ERS concludes a 50 percent increase in corn prices translates into less 
than a one percent increase in the price of food above the normal rate 
of inflation.
    The most direct impact of higher corn prices is felt by the fed 
livestock industry. Kansas is the largest beef producing state and 
ranks among the top three states in total number of cattle on feed. 
Kansas also ranks in the top ten states in hog production. The 
livestock industry is as important to Kansas as it is to Texas.
    The challenges faced by the livestock industry will continue in the 
subsequent years as the demand for corn-based ethanol increases. The 
ethanol industry must be kept viable, but as the need for corn-based 
ethanol production increases, it will become necessary to find ways to 
expand corn supply or allow livestock producers to more equitably 
compete for available corn stocks. I urge you to work with the 
Secretary of Agriculture to find solutions to these emerging issues.
    Although challenges remain, the RFS should be allowed to function 
in 2008. On balance, the negative impacts referenced by Governor Perry 
do not rise to the level of severe harm. In addition, the negative 
impacts from waiver of the RFS mid-way through the year could have an 
adverse affect on many ethanol plants that have made yearly operating 
plans based on the 2008 RFS levels. A waiver of the RFS not only risks 
retraction of the corn-based ethanol industry, but could stifle 
research and development in cellulosic ethanol technology. This would 
be unfortunate, as cellulosic ethanol may enable the biofuel industry 
to less actively compete against livestock producers for feedstock.
    Thank you for considering my comments and please let me know if I 
can be of assistance as you make your decision.
            Very truly yours,

Hon. Jerry Moran,
Member of Congress.
                                 ______
                                 
  Submitted Statement of Bart Ruth, Member, 25x'25 National Steering 
                               Committee
    The 25x25 Steering Committee would like to thank the Subcommittee 
for holding a hearing on producer eligibility for farm bill energy 
title programs and the implementation of the Renewable Fuel Standard 
(RFS).
    Over the last year, opportunities for farmers, ranchers, and 
foresters to participate in domestic energy production have increased 
significantly as result of the passage of the Energy Security and 
Independence Act of 2007 (EISA) and the 2008 Farm Bill. The newly 
established Biomass Crop Assistance program (BCAP) will help producers' 
transition to dedicated energy crop production however, to be 
effective, authorized funding for establishing, harvesting, collecting 
and transporting biomass must be provided.
    In addition, a major funding gap remains for research, development, 
and deployment for dedicated energy crops and their conversion to 
bioenergy on a commercial scale. While a recent Environmental and 
Energy Study Institute (EESI)'s survey shows 22 commercial-scale 
cellulosic biorefineries being planned, with projected operating 
ability in the 2009-2010 time period,\1\ Federal assistance to 
producers and refiners who plan to move advanced biofuels from pilot 
stage to commercial scale production is critically needed. We urge this 
Subcommittee to communicate it support for expanded Federal bioenergy 
education, research, and deployment funding to appropriate 
Congressional Appropriation Subcommittees.
---------------------------------------------------------------------------
    \1\ Cellulosic Biofuels Factsheet, Environmental and Energy Study 
Institute, 2008 http://www.eesi.org/publications/Fact%20Sheets/
eesi_cellethanol_factsheet_072308.pdf.
---------------------------------------------------------------------------
     As you know, EISA and the farm bill contain different definitions 
of biomass eligible for funding under the two laws. While the Energy 
Title of the 2008 Farm Bill included biomass from Federal forestlands 
in the definition for eligible sources, EISA excludes woody biomass 
from Federal forestlands and naturally grown forests from its 
definition of renewable biomass thus rendering these sources of biomass 
ineligible for EISA-funded programs. Considering that a third of 
America's land base is forested, and nearly 60 percent is held by 
private nonindustrial landowners, this restriction basically undermines 
the ability of the forestry sector to participate in biomass energy 
conversion projects and contribute to the nation's energy needs.
    The narrow scope of the definition eliminates important economic 
incentives for forest owners and forestland managers to thin and remove 
hazardous fuel accumulations. A more inclusive definition of renewable 
biomass which allows the thinning and removal of hazardous fuel loads 
will reduce wildfire occurrences as well as the related costs to 
Federal and state governments for fighting and controlling wildfires. 
At the same time, it will reduce significant greenhouse gas emissions 
resulting from catastrophic wildfires such as those occurring this 
summer in California. The definition, as it now stands, also excludes 
potential markets and removes viable economic options for private 
forest landowners and public land managers who have acreages in need of 
thinning and other forest management treatments that could improve the 
health, productivity, and sustainability of our nation's forestlands.
    We would like to thank Congresswoman Herseth Sandlin for leading 
the effort on this issue, and we strongly urge Congress to pass a bill 
that would correct the woody biomass definition this year.
    The issue of woody biomass eligibility is also critical when 
Congress addresses climate change legislation. The agriculture and 
forestry sectors can and do play a major role in reducing greenhouse 
gas emissions and sequestering carbon. An expanded definition of 
renewable biomass along with adequate incentives will ensure that our 
nation's forest and agricultural lands contribute their full potential 
towards the reduction of harmful greenhouse gases.
    The 25x25 Alliance believes that to be a long-term solution for 
America renewable energy production must conserve, enhance and protect 
natural resources and be economically viable, environmentally sound and 
socially acceptable. Earlier this year, we worked with a broad cross-
section of 25x25 partners and developed a set of Sustainability 
Principles for a 25x25 Energy Future. These principles were 
subsequently adopted by the 25x25 National Steering Committee which 
recommended their adoption by renewable energy producers and policy 
makers. A copy of these principles are attached to this statement.
    In closing, we hope that the U.S. Congress will pass a technical 
corrections bill before the end of the year that will establish a 
broader definition for renewable biomass eligible for participation in 
Federal renewable energy programs. Thank you for the opportunity to 
submit this statement. We would be happy to respond to any questions.
                               Attachment
25x'25 Sustainability Principles
March 2008
    In September of 2007, the 25x'25 Steering Committee chartered a 
work group composed of a cross section of agricultural, forestry, 
industry, environmental and conservation leaders to help further define 
sustainability in a 25x'25 renewable future. The mission of the work 
group was to develop recommendations for sustainability principles that 
would help guide the evolution of 25x'25.
    The sustainability principles outlined in this report are the 
product of the 28-member 25x'25 National Steering Committee. Though the 
assumptions and principles were drawn from the consensus 
recommendations developed by the work group, they represent the views 
and position of the 25x'25 National Steering Committee rather than any 
individual 25x'25 Alliance partner.
Preamble
    In the Energy Independence and Security Act passed in December 2007 
the U.S. Congress formally adopted 25x'25 as a national goal, affirming 
that it is the goal of the United States to derive 25 percent of its 
energy use from agricultural, forestry and other renewable resources by 
2025.
    The 25x'25 Action Plan Charting America's Energy Future, authored 
and released by the 25x'25 National Steering Committee in February 
2007, outlines specific steps that need to be taken to put the United 
States on a path to secure 25 percent of its energy needs from 
renewables by the year 2025. The 25x'25 goal and Action Plan stand on a 
foundation of five key principles--efficiency, partnership, commitment, 
sustainability, and opportunity.
    Sustainability has always been considered as central to the success 
of the 25x'25 renewable energy initiative and is defined as follows in 
the Action Plan:

        Sustainability--To be a long-term solution for America, 
        renewable energy production must conserve, enhance, and protect 
        natural resources and be economically viable, environmentally 
        sound, and socially acceptable.

    Underpinning the concept of sustainability is the ideal of 
stewardship or the responsible use and orderly development of natural 
resources in a way that takes full and balanced account of the 
interests of society, future generations, and other species, as well as 
private needs, and accepts significant answerability to society.
    In developing these principles, a number of basic underlying 
assumptions were identified and agreed to:

   Renewable energy production must comply with all existing 
        federal, state, and local laws and regulations.

   All regions will have an opportunity to engage in the 
        production of bioenergy feedstocks and renewable energy.

   Renewable energy production should address the multiple-
        values of the land-base including environmental, economic, 
        social, and historical.

   Balance of stakeholder interests must be a central theme in 
        renewable energy production.

   The principles set forth for sustainability are mutually 
        reinforcing.

    The 25x'25 National Steering Committee recommends the following 
principles to 25x'25 partners and would support their adoption by 
renewable energy producers and policy makers.
Access:
    Renewable energy producers and consumers should have fair and 
equitable access to renewable energy markets, products, and 
infrastructure.
Air Quality:
    Renewable energy production should maintain or improve air quality.
Biodiversity:
    Renewable energy production should maintain or enhance landscape 
biodiversity and protect native, rare, threatened, and endangered 
species and habitat.
Community Economic Benefits:
    Renewable energy production should bolster the economic foundation 
and quality of life in communities where it occurs.
Efficiency and Conservation:
    Renewable energy production should be energy efficient, utilize 
biomass residues and waste materials when possible, and conserve 
natural resources at all stages of production, harvesting, and 
processing.
Greenhouse Gas Emissions:
    Renewable energy production should result in a net reduction of 
greenhouse gas emissions when compared to fossil fuels.
Invasive and Non-Native Species:
    Introduced or non-native species can be used for renewable energy 
production when there are appropriate safeguards against negative 
impacts on native flora and fauna, and on agricultural and forestry 
enterprises.
Market Parity:
    Renewable energy production should have parity with fossil fuels in 
access to markets and incentives.
Opportunities:
    All regions of the nation should have the opportunity to 
participate in renewable energy development and use.
Private Lands:
    Renewable energy production on private working farm, forest, and 
grasslands should improve the health and productivity of these lands 
and help protect them from being permanently converted to non-working 
uses.
Public Lands:
    Renewable energy production from appropriate public lands should be 
sustainable and contribute to the long-term health and mission of the 
land.
Soil Erosion:
    Renewable energy production should incorporate the best available 
technologies and management practices to protect soils from loss rates 
greater than can be replenished.
Soil Quality:
    Renewable energy production should maintain or enhance soil 
resources and the capacity of working lands to produce food, feed, 
fiber, and associated environmental services and benefits.
Special Areas:
    Renewable energy production should respect special areas of 
important conservation, historic, and social value.
Technology:
    New technologies, including approved biotechnology, can play a 
significant role in renewable energy production, provided they create 
land use and production efficiencies and protect food, feed, and fiber 
systems, native flora and fauna, and other environmental values.
Water Quality:
    Renewable energy production should maintain or improve water 
quality.
Water Quantity:
    Renewable energy production systems and facilities should maximize 
water conservation, avoid contributing to downstream flooding, and 
protect water resources.
Wildlife:
    Renewable energy production should maintain or enhance wildlife 
habitat health and productivity.
Reference Materials Reviewed
    25x'25 Action Plan: Charting America's Energy Future. 25x'25 
National Steering Committee. Washington, D.C. February 2007.
    Achieving Sustainable Production of Agricultural Biomass for 
Biorefinery Feedstock. Biotechnology Industry Association. Washington, 
D.C. 2006.
    Bioenergy. NCR-SARE Bioenergy Position Paper. Nov. 2007. http://
www.sare.org/ncrsare/bioenergy.htm.
    Getting Biofuels Right: Eight Steps for Reaping Real Environmental 
Benefits from Biofuels. Natural Resources Defense Council. Washington, 
D.C. May 2007.
    Ken Cairn, B. Biomass Energy--Critical Issues for Consideration in 
Developing Biomass Energy and Energy Policy in Colorado and the West. 
Community Energy Systems, LLC. Oak Creek. CO. 2007.
    Natural Resources: Woody Biomass Users' Experiences Offer Insights 
for Government Efforts Aimed at Promoting Its Use. U.S. Government 
Accountability Office. Washington, D.C. GAO-06-336. March 2006.
    Principles for Bioenergy Development. Union of Concerned 
Scientists. Cambridge, MA. April 2007.
    Roundtable on Sustainable Biofuels: Ensuring That Biofuels Deliver 
on Their Promise of Sustainability. Ecole Polytechnique Federale De 
Lausanne. July 2007.
    Sample, V. Alaric. Ensuring Forest Sustainability in the 
Development of Woody-Based Bioenergy. Pinchot Institute for 
Conservation. Washington, D.C. Vol. 12, No. 1, 2007.
    Sample, V. Alaric. Bioenergy Markets: New Capital Infusion for 
Sustainable Forest Management. Pinchot Institute for Conservation. 
Washington, D.C. Vol. 11, No. 2, 2006.
    Science, Biodiversity, and Sustainable Forestry: A Findings Report 
of the National Commission on Science for Sustainable Forestry. 
National Commission on Science for Sustainable Forestry. Washington, 
D.C. January 2005.
    Sustainability: Meeting Future Economic and Social Needs While 
Preserving Environmental Quality. National Corn Growers Association. 
Chesterfield, MO. 2007.
    The Rush to Ethanol: Not All Biofuels Are Created Equal. Food & 
Water Watch and Network for New Energy Choices. Washington, D.C, and 
New York, NY. 2007.
    The Environmental, Resource, and Trade Implications of Biofuels. 
Woods Institute for the Environment. Stanford University. Stanford, CA. 
2007. http://woods.stanford.edu/ideas/biofuels.html.
25x'25 National Steering Committee
    William Richards--Circleville, OH; (Committee Co-Chair); Corn and 
soybean producer; former Chief, U.S. Department of Agriculture Soil 
Conservation Service.
    J. Read Smith--St. John, WA; (Committee Co-Chair); Wheat, small 
grains and cattle producer; former President, National Association of 
Conservation Districts.
    Duane Acker--Atlantic, IA; Farmer; former President, Kansas State 
University; former Assistant Secretary of Agriculture for Science and 
Education, U.S. Department of Agriculture.
    R. Bruce Arnold--West Chester, PA; Consultant, woody biomass 
utilization for the pulp and paper industry; retired engineer and 
manufacturer, Scott Paper Company.
    Peggy Beltrone--Great Falls, MT; County Commissioner--Cascade 
County Montana; member, National Association of Counties' Environment, 
Energy and Land Use Steering Committee.
    John R. ``Jack'' Block--Washington, D.C.; Former Secretary of 
Agriculture, 1981-1986.
    Michael Bowman--Wray, CO; Wheat, corn and alfalfa producer; 
Steering Committee member, Colorado Renewable Energy Forum; Rural 
Chair, Colorado Ag Energy Task Force.
    Charles Bronson--Tallahassee, FL; Commissioner, Florida Department 
of Agriculture and Consumer Services; member, Florida Cabinet; member, 
Florida Governor's Council on Efficient Government; former President, 
Southern Association of State Departments of Agriculture.
    Glenn English--Arlington, VA; CEO, National Rural Electric 
Cooperative Association; former Co-Chair, U.S. Department of 
Agriculture, DOE Biomass R&D Federal Advisory Committee; former Member 
of Congress (6th OK) 1974-1994; Chairman, House Agriculture 
Subcommittee on Environment, Credit, and Rural Development.
    Tom Ewing--Pontiac, IL; Immediate past Chairman, USDA, DOE Biomass 
R&D Federal Advisory Committee; former Member of Congress (15th/IL) 
1991-2001; Chairman, House Agriculture Subcommittee on Risk Management 
and Specialty Crops.
    Barry Flinchbaugh--Manhattan, KS; Professor of Agricultural 
Economics, Kansas State University; Chairman, Commission on 21st 
Century Production Agriculture.
    Robert Foster--Middlebury, VT; Dairy farmer, composter, anaerobic 
digester; President, Vermont Natural Ag Products; Vice-President, 
Foster Brothers Farm Inc.; President, AgReFresh.
    Richard Hahn--Omaha, NE; Retired President, Farmers National 
Company.
    Harry L. Haney, Jr.--Austin, TX; Consultant, non-industrial private 
forestland management; emeritus professor, Department of Forestry, 
College of Natural Resources, Virginia Tech; past president, Forest 
Landowners Association.
    Ron Heck--Perry, IA; Soybean and corn producer; Past President, 
American Soybean Association.
    Bill Horan--Rockwell City, IA; Corn and soybean producer; former 
Board Member, National Corn Growers Association.
    A.G. Kawamura--Sacramento, CA; Orange County specialty crops, 
produce grower and shipper; Secretary, California Department of Food 
and Agriculture; Vice Chairman, Rural Development & Financial Security 
Policy Committee, National Association of State Departments of 
Agriculture; founding Partner, Orange County Produce, LLC.
    Jim Moseley--Clarks Hill, IN; Managing Partner, Infinity Pork, LLC; 
former Deputy Secretary, U.S. Department of Agriculture; former 
Director of Agricultural Services and Regulations, Purdue University's 
School of Agriculture; Assistant Secretary of Agriculture for Natural 
Resources and the Environment, U.S. Department of Agriculture.
    Allen Rider--New Holland, PA; Retired President, New Holland North 
America; former Vice President, New Holland North America Agricultural 
Business Unit.
    Nathan Rudgers--Batavia, NY; Senior Vice-President, Director, 
Business Development, Farm Credit of Western New York; former 
Commissioner, New York State Department of Agriculture and Markets; 
former President, National Association of State Departments of 
Agriculture.
    Bart Ruth--Rising City, NE; Corn and soybean producer; Past 
President, American Soybean Association; 2005 Eisenhower Fellow for 
Agriculture.
    E. Dale Threadgill--Athens, GA; Director, Faculty of Engineering, 
and Department Head, Biological & Agricultural Engineering, the 
Driftmier Engineering Center, and the Biorefinery and Carbon Cycling 
Program, University of Georgia; private forest landowner.
    Mike Toelle--Brown's Valley, MN; Chairman, CHS; past Director and 
Chairman, Country Partners Cooperative; operator, grain and hog farm, 
Browns Valley.
    Gerald Vap--McCook, NE; Chairman, Nebraska Public Service 
Commission; former Chairman, National Conservation Foundation; 
President, Vap Seed & Hardware.
    Don Villwock--Edwardsport, IN; Grain and soybean producer; 
President, Indiana Farm Bureau Federation; former Chairman, Farm 
Foundation.
    Sara Wyant--St. Charles, IL; President, Agri-Pulse Communications, 
Inc.; former Vice-President of Editorial, Farm Progress Companies.
    Ernest C. Shea--Lutherville, MD (Project Coordinator); President, 
Natural Resource Solutions, LLC; former CEO, National Association of 
Conservation.
                                 ______
                                 
  Submitted Statement by William Imbergamo, Director, Forest Policy, 
                  American Forest & Paper Association
    The American Forest & Paper Association (AF&PA) appreciates the 
opportunity to share our perspective on the Renewable Fuel Standard 
(RFS) that was enacted as part of P.L. 110-140, the Energy Security and 
Independence Act of 2007.
    AF&PA is the national trade association of the forest, pulp, paper, 
paperboard, and wood products industry. The industry accounts for 
approximately six percent of the total U.S. manufacturing output, 
employs more than a million people, and ranks among the top 10 
manufacturing employers in 42 states with an estimated payroll 
exceeding $50 billion. We support policy efforts to increase our 
nation's energy security and our member companies are leading the 
effort to achieve this objective by combining advanced technology and 
innovative manufacturing practices with responsible stewardship of our 
natural resources.
    The forest products industry is a leader in the generation and use 
of renewable energy from biomass residue in our mills. Sixty-four 
percent of the energy used at AF&PA member pulp and paper mills, and 74 
percent of the energy from our wood products facilities, is generated 
from carbon-neutral biomass. Forest product facilities account for 82 
percent of the total biomass energy generated by all industries 
collectively.
    Our renewable energy use and production is accomplished while 
adhering to disciplined market-based standards of accountability that 
ensure the wood fiber we use is grown in a sustainable manner. Since 
1995, all AF&PA members must subscribe to the principles of the 
Sustainable Forestry Initiative' (SFI'), which 
sets rigorous forest management standards that are reviewed by external 
partners from conservation groups and research organizations. With over 
226 program participants and 156 million acres of certified well 
managed forests, the SFI' program ensures that America's 
forest and paper companies are committed to sustainable management. Our 
historic commitment to renewable energy and sustainable forest 
management demonstrates that a balance between the two is both possible 
and necessary.
    AF&PA urges Congress to modify the definition of renewable biomass 
in the RFS provision of P.L. 110-140, which currently restricts 
eligibility based on forest types and successional stage and 
disqualifies most fiber from public ownerships. We also recommend 
adding criteria to the waiver provision that will help balance the 
resource needs of existing biomass users, the emerging resource needs 
of the cellulosic biofuels industry, and the health, viability, and 
productivity of our agricultural and forestlands throughout the 
country.
    The definition of renewable biomass in the RFS statute creates a 
number of implementation challenges and would meaningfully reduce 
landowner options and raise fiber costs for manufacturers of paper and 
wood products. We urge Congress to revisit this issue and replace the 
existing definition of renewable biomass with the definition contained 
in Section 102(4) from the version of H.R. 6, the Energy Security and 
Independence Act that passed the Senate on June 21, 2007.
    As written, the definitional approach in P.L. 110-140 regarding 
tree plantations established prior to enactment potentially excludes 
large swaths of timberland and provides a disincentive to prospective 
market entrants who wish to grow new forests. This language also 
excludes materials from forests in the Lake States, northern New 
England, Central Appalachians, and other regions that are managed to 
allow natural tree regrowth, with potentially negative effects on jobs 
and economic growth in these already distressed rural areas. In 
addition, the renewable biomass definition in the RFS encourages would-
be producers of renewable fuel to focus their procurement efforts on 
existing softwood plantations, which are already intensively managed 
and supply the raw material for existing wood fiber-based 
manufacturing.
    Second, the prohibition on the use of ``slash and thinnings'' from 
either old growth or forests on any list of imperiled forests is 
unworkable because of numerous technical ambiguities that make it 
difficult, if not impossible, to map and apply. We are concerned the 
prohibition in practice will either exclude large amounts of wood fiber 
out of confusion or an abundance of caution, or be enforced entirely in 
the breech because of difficulties verifying the source of the 
generally low value fiber being used to produce biofuels. In any event, 
landowner decisions regarding harvest are driven primarily by regional 
market dynamics which make harvesting old growth timber to produce low-
value biomass impractical.
    Third, the exclusion of fiber from public lands prevents the 
utilization of low value materials removed from the forest to reduce 
fire risk and improve forest health. There are over 90 million acres of 
Federal public lands that are at high risk of uncharacteristic fire, 
insect, or disease outbreaks. Eliminating the biofuels market as a tool 
to reduce hazardous fuel loads will exacerbate the decline in 
infrastructure needed to do this work, placing both forests and 
adjacent communities at increased risk.
    In addition to definitional modifications, AF&PA urges Congress to 
further amend the RFS by adding language that would clarify that a 
state's petition for a waiver from the RFS mandate should be granted if 
compliance with the mandate would severely harm the long-term 
agricultural and silvicultural capability of a region of the country. 
Clarifying that a waiver should be granted if mandated production 
levels threaten the ability of natural resources in the state or region 
to satisfy production levels, in addition to meeting demand from 
existing biomass feedstock users that rely on the same resource to 
produce food and manufacture products, would improve the standard. 
Enhancing the waiver will help maintain a working balance between the 
resource needs of existing biomass users and the emerging resource 
needs of the cellulosic biofuels industry. The modification would also 
help preserve the health, viability, and productivity of our 
agricultural and forestlands throughout the country, as well as 
economies in rural areas.
    The forest products industry is a leader in developing innovative 
energy solutions that decrease our reliance on fossil fuel and is the 
largest producer of biomass energy in the country. We urge Congress to 
assist our efforts by supporting an unbiased definition of renewable 
biomass, ensuring the long-term silvicultural and agricultural 
capability of regions, and maintaining the current biomass needs of 
existing facilities.
    We thank the Committee for creating an opportunity to comment on 
this important issue and look forward to working with you and others in 
Congress in the coming months to craft a workable and balanced 
renewable energy policy.
    For more information please contact:

Elizabeth VanDersarl,
Vice President, Government Affairs,
American Forest & Paper Association.
                                 ______
                                 
Submitted Letter and Statement of Joseph Jobe, CEO, National Biodiesel 
                                 Board
July 24, 2008

Hon. Tim Holden,
Chairman,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.;

Hon. Frank D. Lucas,
Ranking Minority Member,
Subcommittee on Conservation, Credit, Energy, and Research,
Committee on Agriculture,
Washington, D.C.

RE: Subcommittee Hearing to Review Renewable Fuel Standard 
Implementation and Agriculture Producer Eligibility.

    Dear Chairman Holden and Ranking Member Lucas:

    The National Biodiesel Board (NBB) applauds you for your continued 
leadership on renewable fuels and for holding this hearing today. The 
NBB is the trade association for the U.S. biodiesel industry and 
represents 171 biodiesel producers across the United States.
    As an industry, we wanted to make sure the Subcommittee was aware 
of an issue that is of critical importance to the ultimate success of 
the Renewable Fuel Standard (RFS) and our nation's efforts to reduce 
our dependence on foreign oil. Specifically, we are concerned that the 
Environmental Protection Agency (EPA) will not require the domestic use 
of 500 million gallons of biodiesel or biomass-based diesel as mandated 
by the Energy Independence and Security Act of 2007 (EISA) in 2009. The 
bipartisan EISA enacted in December, 2007, significantly improved the 
RFS and included a requirement to use 500 million gallons of biomass-
based diesel in the United States in 2009. This requirement gradually 
increases to 1 billion gallons by 2012. Biodiesel is one of the fuels 
available in the marketplace today that will qualify as a biomass-based 
diesel. It is imperative that the EPA require the use of 500 million 
gallons of biomass-based diesel be used domestically in 2009.
    Already, in 2008 the industry is expected to exceed the 500 million 
gallons required by the RFS in 2009 and under the existing RFS, the EPA 
has a system in place to track biodiesel in the marketplace through its 
``renewable identification numbers'' (RINs). In our view, EPA should 
use this existing system to implement the biomass-based diesel use 
requirements as mandated under current law.
    To help meet the nation's larger policy goals as it relates to 
energy security, climate change and economic development, it is vital 
that EPA move forward with creating the domestic requirement to use 500 
million gallons of biomass-based diesel in 2009, consistent with 
current law under EISA and the RFS.
    The NBB looks forward to working constructively with both Congress 
and the EPA to meet the RFS requirements established in EISA. We 
appreciate your continued leadership and support of efforts to promote 
the production and use of biodiesel.
            Sincerely,
            
            
                          Submmited Statement
    Chairman Holden, Ranking Member Lucas and Members of the 
Subcommittee, the National Biodiesel Board (NBB) applauds you for your 
continued leadership on renewable fuels and for holding this hearing 
today. We appreciate the opportunity to submit written testimony 
concerning the implementation of the updated Renewable Fuel Standard 
(RFS2) which the industry supports and has pledged to help implement.
    As an industry, we wanted to make sure the Subcommittee was aware 
of an issue that is of critical importance to the ultimate success of 
the Renewable Fuel Standard (RFS) and our nation's efforts to reduce 
our dependence on foreign oil. Specifically, we are concerned that the 
Environmental Protection Agency (EPA) will not require the domestic use 
of 500 million gallons of biodiesel or biomass-based diesel as mandated 
by the Energy Independence and Security Act of 2007 (EISA) in 2009. The 
bipartisan EISA enacted in December, 2007, significantly improved the 
RFS and included a requirement to use 500 million gallons of biomass-
based diesel in the United States in 2009. This requirement gradually 
increases to 1 billion gallons by 2012. Biodiesel is one of the fuels 
available in the marketplace today that will qualify as a biomass-based 
diesel. It is imperative that the EPA require the use of 500 million 
gallons of biomass-based diesel be used domestically in 2009.
    About NBB: The National Biodiesel Board (NBB) is the national trade 
association representing the biodiesel industry as the coordinating 
body for research and development in the United States. It was founded 
in 1992 by state soybean commodity groups who were funding biodiesel 
research and development programs. Since that time, the NBB has 
developed into a comprehensive industry association which coordinates 
and interacts with a broad range of cooperators, including industry, 
government and academia. NBB's membership is comprised of state, 
national and international feedstock and feedstock processor 
organizations, biodiesel suppliers, fuel marketers and distributors and 
technology providers.
    Background and Industry Overview: Biodiesel is a diesel fuel 
replacement that is made from agricultural oils, fats and waste greases 
that meets a specific commercial fuel definition and specification. The 
fuel is produced by reacting feedstock with an alcohol to remove the 
glycerin in order to meet specifications set forth by the American 
Society for Testing and Materials (ASTM International). Biodiesel is 
one of the best-tested alternative fuels in the country and the only 
alternative fuel to meet all of the testing requirements of the 1990 
amendments to the Clean Air Act.
    Biodiesel is primarily marketed as a blended product with 
conventional diesel fuel, typically in concentrations up to 20%. It is 
distributed utilizing the exiting fuel distribution infrastructure with 
blending most commonly occurring ``below the rack'' by fuel jobbers. 
Biodiesel is beginning to be distributed through the petroleum terminal 
system. To date, biodiesel has positions in approximately 42 terminals. 
The biodiesel industry has already committed funds to study the 
technical needs required for moving biodiesel through U.S. pipelines. 
Already, biodiesel is moved through pipelines in Europe and extending 
that capability in the U.S. would significantly increase biodiesel 
penetration in the U.S. diesel fuel market.
    The biodiesel industry has shown steady growth over the last 15 
years. In 2007, the industry produced 500 million gallons of biodiesel 
and is on pace to increase production above these levels in 2008. 
Today, there are 171 plants in operation with the capacity to produce 
more than 2.24 billion gallons of biodiesel and 60 new plants under 
construction or expansion, which will add an estimated new capacity of 
nearly 1.13 billion gallons.
    Industry Position on RFS2 Implementation: The bipartisan Energy 
Independence and Security Act of 2007 (EISA), enacted in December, 
2007, significantly improved the original RFS and included a 
requirement to use 500 million gallons of biomass-based diesel in the 
United States in 2009. This requirement gradually increases to 1 
billion gallons by 2012. Biodiesel is one of the fuels available in the 
marketplace today that will qualify as a biomass-based diesel. 
Consistent with existing statute as established in EISA, it is 
imperative that the Environmental Protection Agency (EPA) require the 
use of 500 million gallons of biomass-based diesel in 2009.
    For the NBB, the most important issue or concern relating to 
implementation of RFS2 is ensuring that the EPA complies with the 
statutory requirement to mandate the domestic use of 500 million 
gallons of biomass-based diesel in 2009. While we applaud the EPA for 
diligently moving forward on implementing the rule, the biodiesel 
industry is concerned that EPA will not be prepared to issue a final 
rule prior to January 1, 2009, which may delay implementation of the 
biomass-based diesel usage requirement.
    The U.S. biodiesel industry is fully capable of meeting the RFS 
biomass-based diesel requirements. U.S. biodiesel production in 2008 is 
expected to exceed the 500 million gallons required by the RFS in 2009.
    Under the existing RFS, the EPA tracks the amount of biodiesel used 
in the marketplace via ``renewable identification numbers'' (RINs) and 
in our view, EPA has the ability to use this existing system to 
implement the biomass-based diesel use requirements as mandated under 
current law. It is vital that EPA move forward with implementing the 
domestic requirement to use 500 million gallons of biomass-based diesel 
in 2009 to help meet the nation's larger policy goals relating to 
energy security, climate change and economic development.
    There is precedent for EPA to require the use of renewables absent 
the issuance of a final RFS rule. When the initial RFS was enacted as 
part of the Energy Policy Act of 2005, EPA required the use of a 
minimal amount of renewable fuels in the marketplace prior to 
promulgation of a final rule implementing the RFS. Specifically, it 
required the use of 4.0 billion gallons in 2006 with no rule or 
tracking system in place. Also, in 2007, 4.7 billion gallons were 
required, even though the regulatory rule did not take effect until 
September 1, 2007. Given the presence of the existing tracking system, 
the EPA has both the mechanisms and the precedent to move forward with 
requiring the use of 500 million gallons of biomass-based diesel absent 
the promulgation of a final RFS2 rule.
    Implementation of the 500 million gallon use requirement for 
biomass-based diesel in 2009 absent promulgation of a final rule 
implementing RFS2 is consistent with EISA's greenhouse gas reduction 
goals. The most recent USDA-DOE lifecycle study shows a 78% reduction 
in lifecycle CO2 emissions for biodiesel. Already, we know 
that using 500 million gallons of biodiesel in the United States will 
reduce current lifecycle greenhouse gas emissions by 8.06 billion 
pounds, the equivalent of removing 700,000 passenger vehicles from our 
highways.
    We are concerned that if EPA does not direct obligated parties to 
use biomass-based diesel, then the entire amount of renewable fuels 
required in 2009 (11.1 billion gallons) will be filled by ethanol. 
Already, the ethanol industry has more than 9.4 billion gallons of 
capacity with more than 4.2 billion gallons coming online in the next 
18 months. Today, ethanol is blended into more than 50% of the gasoline 
marketplace nationwide and new infrastructure is rapidly being 
established in the Southeast, where an estimated 2 billion new gallons 
of ethanol is already entering the marketplace. In our view, the 
overwhelming volume, the mature infrastructure, and the economics of 
today's market will lead obligated parties to choose ethanol, rather 
than any other fuel, to meet 2009 requirements under the RFS2. This is 
inconsistent with the goal of RFS2 to diversify the use of renewable 
fuels in the U.S. and for the first time implement a low-carbon 
renewable requirement for U.S. diesel fuel.
    Therefore, NBB recommends that after January 1, 2009 and until the 
final regulatory rule required by the EISA is promulgated, that the 
Administrator of the EPA include a specific actual volume for 
``biomass-based diesel'' consistent with Section 202 of EISA. 
Furthermore, we encourage the Administrator to utilize EPA's existing 
authority to implement the biomass-based diesel schedule consistent 
with RFS2.
    Biomass-Based Diesel RFS2 Requirement Has Minimal Impact of Food 
Prices: As both the U.S. Department of Agriculture (USDA) and the U.S. 
Department of Energy (DOE) have noted, biofuels-related feedstock 
demand plays only a small role in global food supply and pricing. 
Worldwide, the estimated increase in the price of soybeans and soybean 
oil would increase the global food commodity price index by 1-2 
percent. In the U.S., according to USDA and DoE, food prices have 
increased by about 4.8 percent. Of that increase, ethanol and biodiesel 
consumption accounted for only four or five percent while other factors 
accounted for 95-96 percent of the increase.
    The combination of rising energy costs, increased global commodity 
demand, and the weak dollar are the main causes of rising food prices. 
It is important to note that U.S. biodiesel production is not a 
significant factor of soybean usage either in the United States or 
worldwide. In 2007, only 12% of U.S. soybean production and 4% of 
global soybean production was used by the U.S. biodiesel industry to 
produce fuel. Furthermore, from the soybeans used to produce biodiesel, 
81% of the soybean's yield is protein that enters the market for either 
human consumption or animal feed.
    Concern has been raised regarding the impact of RFS2 on corn or 
feed prices. Again, the true causes of rising food prices are energy 
costs, global commodity demand, and the weak dollar. With that said, it 
is also important to again note that biodiesel is made from 
agricultural oils, fats and waste greases, not made from corn. Thus, 
the production of biodiesel has no direct impact on corn prices. Corn 
and soybeans compete for acreage in the United States and weather will 
play a role in production numbers for both crops; however, according to 
USDA's most recent World Agricultural Supply and Demand Estimates, 
global oilseed production is projected to increase to nearly 420 
million tons for 2008/09, an increase of 31.6 million tons from 2007/
08.
    Soybeans are currently the primary oilseed crop grown in the United 
States, and soybean oil makes up about 60 percent of the raw material 
available to make biodiesel. The other 40 percent consists of all other 
vegetable oils and animal fats. Specifically, in 2007, refined soybean 
oil, made up 62.74%; crude soybean oil, made up 16.64%; animal fats and 
oils, made up 16.05%; inedible tallow and grease, made up 4.36% and 
cottonseed oil, made up .021%.
    As this demonstrates, U.S. biodiesel is produced from a variety of 
diverse feedstocks. Looking forward, it is apparent that the feedstock 
needed to meet the biomass-based diesel requirements in RFS2 will be 
readily available and U.S. biodiesel production will continue to have 
an insignificant impact on food prices.
    Technological advances and plant science research are adding 
``virtual acres'' for greater production from existing cropland. In 
July, 2007 Monsanto announced plans to introduce new technology in 2009 
that can increase yields by as much as 9% to 11%. In September, 2007 
DuPont announced it is commercializing soybean varieties that increase 
yields by as much as 12%. If 90% of U.S. soybean acres adopted the new 
technology, more than 60 million acres could benefit from a 10% 
increase in yield. This potentially equates to more than 250 million 
additional bushels of soybeans (the equivalent of 380 million gallons 
of biodiesel).
    Other sources of biodiesel feedstock, such as restaurant grease and 
animal fats are increasingly being used in biodiesel production. In 
addition, corn oil derived from ethanol production, camelina, and algae 
are currently being developed and utilized. According to the National 
Energy Research Laboratory (NREL), in Golden Colorado (March 2006), 
current feedstocks for biodiesel total nearly 2.0 billion gallons 
(including greases, animal fats, and vegetable oils). NREL anticipates 
the natural growth and expansion of existing feedstocks (soy, canola, 
and sunflowers) will expand feedstocks supplies for an additional 1.8 
billion gallons by 2016.
    It is clear that the feedstock needed to meet the conservative 
biomass-based diesel schedule established in RFS2 will be readily 
available, and any minor increases in food prices that could result 
will be more than offset by the public policy benefits that are 
achieved by addressing the nation's energy security, climate change and 
economic development objectives.
Conclusion:
    We appreciate the opportunity to provide written comments for this 
important hearing and we look forward to working with you to improve 
our nation's energy balance, its environmental stewardship and the 
creation of new green jobs across the United States.
    If the EPA implements RFS2 as required by statute, it will provide 
the greatest opportunity for this nation to decrease its dependence on 
imported oil, increase domestic employment opportunities and decrease 
greenhouse gas emissions through transportation's fuels.
    For the NBB, the most important issue or concern relating to 
implementation of RFS2 is ensuring that the EPA complies with the 
statutory requirement to require the domestic use of 500 million 
gallons of biomass-based diesel in 2009.
    Finally, the U.S. biodiesel industry is fully capable of meeting 
the RFS biomass-based diesel requirements and in a manner that will 
have little if any impact on food prices because the industry utilizes 
an abundant, increasingly diversified pool of feedstocks to produce the 
most sustainable fuel used in transportation fuels today.
                                 ______
                                 
Submitted Statement of Hon. M. Michael Rounds, Governor, State of South 
           Dakota; Chairman, Midwestern Governors Association
    I would like to thank Chairman Holden and Ranking Member Lucas of 
the Subcommittee on Conservation, Credit, Energy, and Research of the 
House Committee on Agriculture for holding this hearing on the 
renewable fuels and eligibility, as well as affording me the ability to 
provide this statement for the record.
    As Governor of the great state of South Dakota, I provide the 
following remarks on behalf of the Midwestern Governors Association 
(MGA), of which I am Chair. The panels of witnesses assembled here 
today have helped to provide a voice in response to the negative image 
that some are attempting to place on biofuels. I hope that my 
testimony, in conjunction with the others heard here, will help dispel 
many negative stereotypes associated with ethanol.
    The MGA is a nonprofit, nonpartisan organization that brings 
together the governors of 12 states to work cooperatively on public 
policy issues of significance to the midwestern region. In addition to 
myself and the state of South Dakota, the current members of the MGA 
are Gov. Rod Blagojevich (Ill.), Gov. Mitch Daniels (Ind.), Gov. Chet 
Culver (Iowa), Gov. Kathleen Sebelius (Kansas), Gov. Jennifer Granholm 
(Mich.), Gov. Tim Pawlenty (Minn.), Gov. Matt Blunt (Mo.), Gov. Dave 
Heineman (Neb.), Gov. John Hoeven (N.D.), Gov. Ted Strickland (Ohio) 
and Gov. Jim Doyle (Wis.).
    The states have long been leaders in recognizing the benefits of 
strong renewable and domestic sources of energy. This recognition has 
turned to action in the Midwest for support of ethanol (including the 
development and deployment of cellulosic biofuels), wind, woody 
biomass, advanced coal with carbon capture and sequestration, and 
anaerobic digesters. Support for these sources of bio and renewable 
energy, as well as support for the Renewable Fuel Standard (RFS), are 
key ways to move our country to reach our goal, the goal of yielding a 
clean, sustainable, domestic source of energy.
    One of the ways the Federal Government has played a role in 
supporting the states in their actions to encourage new energy sources 
is through the enactment of the RFS. Unfortunately, the negative public 
relations campaign against renewable energy sources has caused the RFS 
to come under criticism. This critique has led many to call for the RFS 
to be repealed, waived or weakened. The benefits of the RFS need to be 
stressed to the public, who are currently being barraged by the 
campaign to halt this support of biofuels. Through the RFS, the 
increased use of renewable fuels will reduce traditional car 
pollutants, such as benzene and carbon monoxide. Additionally, the RFS 
also helps to move the ethanol industry towards the use of cellulosic 
materials and other second and third generation biofuels.
    Some criticism for the RFS, however, is warranted and has been a 
focus in today's hearing. While the field of renewable energy sources, 
options and techniques are growing, many of these new sources are not 
counted towards the RFS. We strongly feel that there are a host of 
energy options that the should be explored, implemented and utilized to 
meet the current and future energy needs of this nation and the world. 
Similarly, each region of our nation has varied resources and 
capabilities to explore these varied energy sources. The U.S. Congress 
needs to closely examine Federal regulations to ensure that they are 
not inadvertently stifling renewable energy production.
    While we do not debate that there may be a correlation between food 
prices and the use of biofuels, we do contend that it is neither the 
only nor the major factor for the increase in commodity prices. There 
is a myriad of reasons for the increase in all commodities, not just 
corn. These factors include rising transportation costs due to record 
oil prices, increased demand for grains and meat from developing 
countries, increased speculator investment and influence in all 
commodities markets, and extended global draught. Placing blame on the 
biofuel industry is misguided and needs to be corrected.
    The economic implications of bio and renewable fuels are 
significant to the Midwest. The growth of biofuels have provided an 
avenue for rural revitalization and job opportunities for local 
residents. Our region, as well as other states, have seen a significant 
growth in the quality of living for those living in rural areas. At a 
time where there is population migration away from the rural areas, 
energy industry job opportunities for rural residents will be 
instrumental in drawing people back to the less-populated areas of the 
states. This new source of vitality for historically underserved 
communities is imperative to our nation's place in a global market--as 
well as ensuring all Americans are afforded the same opportunities and 
quality of living of those living in urban and suburban areas.
    Our nation has become a global economic superpower and leader in 
the markets due in part to our entrepreneurial spirit. From the 
telegraph to Silicon Valley, the combine to the transcontinental 
railway, our country has made giant leaps from the ground to the moon 
in developing and implementing new technologies. Our entrepreneurial 
spirit is continuing on with research and expansion of the renewable 
energy and fuels markets. Advancing from first generation to second, 
and even third generation biofuels hinges on the support and 
encouragement of the industries we have in place now. Placing undue 
criticism and blame on ethanol for price increases in the food or 
energy markets will only stunt our country's ability to have a clean, 
sustainable and domestic energy future.
    This hearing you held provided excellent information for the record 
to discount many of the negative perceptions that many are beginning to 
hear about the biofuel industry. Without a response and attempt to 
answer some of the misinformation, the future development of second and 
third generation biofuels may be jeopardized.
    Thank you again for allowing me the ability to provide these 
remarks for the record. The Midwestern Governors Association and myself 
look forward to being of any assistance we can as you continue to 
discuss this important topic.
                                 ______
                                 
  Submitted Letter of Consortium of Agricultural Soils Mitigation of 
                            Greenhouse Gases
Thursday, July 31, 2008

Hon. Collin C. Peterson,
Chairman,
Committee on Agriculture,
Washington, D.C.;

Hon. Frank D. Lucas,
Ranking Minority Member,
Committee on Agriculture,
Washington, D.C.

    Dear Chairman Peterson and Ranking Member Goodlatte:

    We are writing to you to correct the record on a very important 
matter that is of relevance not only to the agricultural sector but 
also to the U.S. Congress and to our nation. The issue pertains to the 
ability of soils--our greatest and most vital natural resource--to 
absorb carbon dioxide from the atmosphere. This tendency is referred to 
as soil carbon sequestration, and is a form of biological or 
terrestrial sequestration that has been identified by many economists, 
climatologists, and soil scientists as one of, if not the primary, low-
cost, high-impact near-term technologies at our disposal to help to 
begin to reduce U.S. and global emissions of greenhouse gases as we 
attempt to combat climate change. Agricultural soil sequestration can 
provide a bridge to a lower-carbon intensive future, by providing 
valuable emissions reductions and therefore allowing time for the more 
costly infrastructure changes and capitol stock turnover to occur in 
the early years of a national policy to reduce greenhouse gas emissions 
(GHG).
    We are all members of a consortium of scientists from land-grant 
universities and national laboratories created by Congress in 2001 to 
focus on research and outreach programs related to agricultural soil 
sequestration, along with agricultural nitrous oxide and methane 
mitigation efforts in the U.S. The Consortium of Agricultural Soils 
Mitigation of Greenhouse Gases (CASMGS) has been conducting research on 
this topic since our formation in 2001, and in most cases, the 
scientists involved in the Consortium were engaged in research on this 
topic long before this, as well. The Congress reauthorized CASMGS in 
the recently enacted 2008 Farm Bill.
    At issue is a characterization by some that certain practices such 
as no-till farming do not increase or otherwise enhance soil carbon 
stocks by leading to increased soil carbon sequestration. We would like 
to correct this mischaracterization, and want to assure you that there 
is an extensive historical and contemporary body of scientific evidence 
that does in fact show that no-till and minimum-tillage practices, in 
most instances, lead to increased soil carbon sequestration.
    We have attached a brief synopsis reflecting this evidence, and 
summarizing the state of knowledge relative to no-till and minimum-
tillage practices and soil carbon sequestration.
    We hope that this information proves useful to your deliberations 
as you continue to guide and shape the role of the U.S. agricultural 
sector in the 21st Century, and we hope that you will consider us as a 
resource for your continued efforts in considering agricultural 
sustainability and the role of soil carbon sequestration in national 
climate change policy.
            Sincerely,

Susan Capalbo,
Department Head and Professor,
Department of Agricultural and Resource Economics,
Oregon State University;

Rich Conant,
Research Scientist III,
Natural Resource Ecology Laboratory,
Colorado State University;

R. Cesar Izaurralde 
Laboratory Fellow, Joint Global Change Research Institute,
Adjunct Professor, Department of Geography,
Pacific Northwest National Laboratory and University of Maryland;

Keith Paustian,
Professor, Department of Soil and Crop Sciences,
Sr. Research Scientist, Natural Resource Ecology Lab,
Colorado State University;

Chuck Rice,
Professor--Soil Microbiology,
Department of Agronomy,
Kansas State University.
                               Attachment
Tillage Effects on Soil Carbon Accumulation
July 31, 2008
Summary:
    Data from existing long-term field experiments provides the best 
source of knowledge about tillage and other production management 
effects on soil carbon content. The preponderance of this data shows 
that that adoption of no-tillage increases soil C, relative to 
conventional tillage, in most U.S. cropland soils.
Background:
    Numerous studies of replicated, long-term field experiments 
comparing conventional tillage (e.g. moldboard plow, chisel, disk) and 
no-tillage have demonstrated that most soils, following conversion to 
no-tillage, show an increase in soil carbon (C) content relative to 
tilled soils, when the measurements are integrated over the full depth 
of soil affected by tillage (typically the top 20-30 cm) (see reviews 
by Paustian et al. 1997, West and Post 2002, Ogle et al. 2005). In 
general, positive soil C responses are obtained first after several 
years of no-till management (Six et al. 2004) and after 20-30 years, 
the relative rates of C accumulation tend to decline as soil C levels 
approach a new equilibrium level under no-till conditions (West and 
Post 2002). Specific mechanisms by which the physical disturbance from 
tillage increases soil C loss (and conversely, that reduce soil C loss 
under no-till) have been proposed and supported by field and 
experimental evidence (e.g. Six et al. 2000, Denef et al. 2004). On the 
basis of this experimental evidence, sequestration factors for reduced 
and no-tillage management have been developed (Ogle et al. 2005) and 
implemented for inclusion in the Intergovernmental Panel on Climate 
Change (IPCC) guidelines for national greenhouse gas inventories (IPCC 
2006) and values for C credits due to no-till management have been 
sanctioned by the Chicago Climate Exchange (CCX).
    At the same time, it has been long recognized that not all soils 
respond positively in terms of gaining C under no-till--in particular, 
soils with an already high content of soil C and cropland soils in 
cool, moist climates often do not show increases in C content under no-
till compared to plow tillage; for example, this has been found for 
several experimental sites in eastern Canada (Anger et al. 1997). The 
reasons for this lack of response to reduced tillage intensity is not 
yet clear, although preliminary results suggest that reduced 
decomposition rates of buried residues under cool, moist climates and 
`saturation' of physically-protected soil organic C in high C soils are 
potential mechanisms (E. Gregorich, personal communication; D. Angers, 
personal communication). However, the large majority of cropland soils 
in the U.S. do not fall into this category.
    Recently, a few researchers have raised questions about whether no-
till, in general, actually leads to a relative increase in soil carbon 
when viewed at whole soil level, as illustrated in the papers by Baker 
et al.\1\ and Blanco-Canqui and Lal.\2\ The foundation of their 
arguments lay largely in the fact that most measurements of no-till 
versus tillage systems in long-term experiments have often only 
measured the top 30 cm or less of the soil profile, although several 
sites have been measured to depths of up to 100 cm. These authors argue 
that if soil carbon contents are summed to a greater depth of the soil 
profile (e.g the top 0 to 60 or 100 cm) then in most cases there is no 
statistically significant difference between different tillage systems. 
The problem with this argument is two-fold. First, it is true that the 
effects of no-till adoption are typically manifested in the top 20-30 
cm of soil, which is the zone of soil disturbance in a tilled system! 
The vast majority of tillage comparisons show no significant 
differences in soil carbon content below the tillage zone (Ogle et al. 
2005).\3\ Second, because the change in soil C due to tillage 
management (the `signal') is relatively small relative to the 
`background' soil C content (the `noise'), by adding in the additional 
C stored in lower parts of the profile (even if differences below the 
plow layer are not significant), this calculation increases the `noise' 
in the estimate such that the signal-to-noise ratio decreases and thus 
it is not surprising that comparisons of C content for the entire soil 
profile are often not significantly different. A more meaningful 
determination is to utilize, as far as possible, measurements for 
different soil depth increments to the full depth of the soil profile 
and then to evaluate whether soil C contents are different below the 
tillage zone, and if not, then the estimates should be based on the 
measurements encompassing the depth of tillage, where the main effects 
of tillage management are manifested. This is the procedure that has 
been used in developing the IPCC soil C change factors for tillage 
management (IPCC, 2006).
---------------------------------------------------------------------------
    \1\ Baker, J.M., T.E. Ochsner, R.T. Veterea and T.J. Griffis. 2007. 
Tillage and soil carbon sequestration: What do we really know? 
Agriculture, Ecosystems and Environment 118:1-5.
    \2\ Blanco-Canqui, H. and R. Lal. 2008. No-tillage and soil-profile 
carbon sequestration: An on-farm assessment. Soil Science Society of 
America Journal 72:693-701.
    \3\ Baker et al. (2007) argue that one way in which plowed soils 
could accumulate more C in deeper depths in the soil profile, compared 
to no-till, is if no-till results in a more superficial distribution of 
roots, such that comparatively more root residues are deposited in 
deeper soil zones under plow tillage. Unfortunately, there are very few 
measurements of root distributions comparing tilled and no-tilled 
systems--Baker et al. (2007) cite only one study (from Switzerland) 
showing a deeper root distribution under plow tillage. While this 
potential mechanism is worthy of further research, it does not merit 
rejecting the many long-term tillage comparisons showing no significant 
differences in soil C below the depth of tillage.
---------------------------------------------------------------------------
    Other data that has been used to question whether no-till really 
increases soil carbon are total ecosystem C flux from eddy covariance 
measurements (Baker et al. 2007). While eddy covariance (EC) techniques 
are a highly useful approach in C cycling research, there are several 
drawbacks which make them inappropriate for drawing inference about 
soil C changes. First, there are only (to our knowledge) 2-3 locations 
in the U.S. where EC is being used to estimate ecosystem C balances for 
systems under no-till (Baker et al., Verma et al. 2005), thus any 
inferences made cannot be considered general for no-till systems. 
Secondly, EC measurements have so far been for the first 2-3 years 
following conversion to no-till, in other words, during the transition 
phase between conventional and no-till when soil C increases are 
expected to be lowest. Finally, the typical rates of C accumulation 
determined from long-term plot studies (e.g. 0.1 to 0.5 tonnes C per 
ha) are likely to be within the `error' estimate for annual net C 
accumulation using EC methods, thus there is little confidence in the 
estimates obtained for annual soil C changes (furthermore, EC estimates 
to date are typically unreplicated, hence a true determination of the 
error associated with these annual C changes are not possible). Hence 
the best method for determining soil C changes due to changes in soil 
management practices (including tillage) is through careful soil 
measurements in which the accumulated change in soil C over several 
years can be accurately determined.
    An important point raised by Blanco-Canqui and Lal (2008) is that 
we currently lack good data on tillage effects under actual on-farm 
conditions. Our best information on tillage impacts are from field 
experiments administered by land grant universities and by governmental 
research agencies (e.g. ARS).\4\ However, the approach taken in the 
paper by Blanco-Canqui and Lal--i.e., paired field (`across the fence') 
comparisons of tilled and no-till practices--involved a number of 
serious shortcomings. First, paired comparisons--because they lack a 
true control--have a high degree of uncertainty. Even if similar soil 
and slope conditions are chosen it is impossible to know if soil carbon 
contents were the same before a change in tillage practices occurred. 
Second, in on-farm comparisons it is difficult to isolate the effect of 
tillage from other management variables. In most of the comparisons 
described by Blanco-Canqui and Lal (2008), crop rotations and nutrient 
management, as well as tillage, were different within the paired 
comparisons--hence apparent differences between fields cannot, in fact, 
be attributed to tillage. As the authors themselves point out, several 
of the apparent tillage differences, if real, are likely due to factors 
other than tillage, e.g., from pg. 697, ``Unlike the NT [no-till] 
field, however, the PT [plow tillage] field was under winter wheat and 
rye cover crops, which were plowed under every year. Thus we 
hypothesize that the higher SOC [soil organic carbon] with PT may have 
been due to the use of cover crops. In MLRA 124, the higher SOC with PT 
may have been due to the use of continuous corn, a high biomass-
producing crop, in contrast with the corn-soybean-alfalfa rotation in 
the NT field. Annual burying of coarse corn residues in PT soils may 
have increased SOC at lower depths compared with the relatively low-
biomass-producing rotation adopted in NT farming''.
---------------------------------------------------------------------------
    \4\ However, it should be pointed out that the vast majority of 
agricultural field research being used for management and policy 
decisions in other areas (e.g. on genetics, yield, nutrient management, 
etc.) is also derived from controlled field research settings, and not 
from on-farm studies.
---------------------------------------------------------------------------
    Instead of using unreliable paired comparisons, new measurements of 
soil C change under actual on-farm conditions should be based on a 
resampling over time of on-farm benchmark sites, as part of a 
nationwide soil C monitoring network. Such a network is currently under 
development as part of the National Resources Inventory (NRI) 
administered by USDA-NRCS (J. Goebel, personal communication). 
Resources to establish and build out this network should be a high 
priority. In the meantime, our data from existing long-term field 
experiments provides the best source of knowledge about tillage (and 
other management) effects on soil C--here, the preponderance of 
evidence supports the conclusion that adoption of no-tillage increases 
soil C, relative to conventional tillage, in most U.S. cropland soils.
References
    Angers, D.A., M.A. Bolinder, M.R. Carter, E.G. Gregorich, C.F. 
Drury, B.C. Liang, R.P. Voroney, R.R. Simard, R.G. Donald, R.P. Beyaert 
and J. Martel. 1997. Impact of tillage practices on organic carbon and 
nitrogen storage in cool, humid soils of eastern Canada. Soil Tillage 
Res. 41:191-201.
    Baker, J.M., T.E. Ochsner, R.T. Veterea and T.J. Griffis. 2007. 
Tillage and soil carbon sequestration. What do we really know? 
Agriculture, Ecosystems and Environment 118:1-5.
    Blanco-Canqui, H. and R. Lal. 2008. No-tillage and soil-profile 
carbon sequestration: An on-farm assessment. Soil Science Society of 
America Journal 72:693-701.
    Denef, K., J. Six, R. Merckx, and K. Paustian. 2004. Carbon 
sequestration in microaggregates of no-tillage soils with different 
clay mineralogy. Soil Science Society of America Journal 68:1935-1944.
    IPCC (Intergovernmental Panel on Climate Change). 2006. 2006 IPCC 
Guidelines for National Greenhouse Gas Inventories, Prepared by the 
National Greenhouse Gas Inventories Programme, Eggleston H.S., Buendia 
L., Miwa K., Ngara T. and Tanabe K. (eds). Published: IGES, Japan.
    Ogle, S.M., F.J. Breidt and K. Paustian. 2005. Agricultural 
management impacts on soil organic carbon storage under moist and dry 
climatic conditions of temperate and tropical regions. Biogeochemistry 
72:87-121.
    Paustian, K., O. Andren, H. Janzen, R. Lal, P. Smith, G. Tian, H. 
Tiessen, M. van Noordwijk and P. Woomer. 1997. Agricultural soil as a C 
sink to offset CO2 emissions. Soil Use and Management 
13:230-244.
    Six, J., Elliott, E.T. and Paustian, 2000. K. Soil macroaggregate 
turnover and microaggregate formation: A mechanism for C sequestration 
under no-tillage agriculture. Soil Biology & Biochemistry 32:2099-2103.
    Six, J., S.M. Ogle, F.J. Breidt, R.T. Conant, A.R. Mosier and K. 
Paustian. 2004. The potential to mitigate global warming with no-
tillage management is only realized when practiced in the long term. 
Global Change Biology 10:155-160.
    Verma, S.B., A. Dobermann, K.G. Cassman, D.T. Walters, J.M. Knops, 
T.J. Arkebauer, A.E. Suyker, G.G. Barba, B. Amos, H. Yang, D. Ginting, 
K.G. Hubbard, A.A. Gitelson and E. A Walter-Shea. 2005. Annual carbon 
dioxide exchange in irrigated and rainfed maize-based agroecosystems. 
Agri. Forest. Meteror. 131:77-96.


    Question 1. Do you think that creating a market for low value woody 
waste material from Federal forests in the RFS would create a financial 
incentive to expand forest management practices or other forest 
stewardship activities?
    Answer. The short answer to this question is yes, because the RFS 
requires blenders and distributors to sell specific quantities of 
biofuels produced from specific sources and feedstocks. Including 
biomass produced as a result of public land management among those 
sources will establish a guaranteed market for these materials and 
direct capital towards an expansion of these management practices. On 
the other hand, excluding biomass from public land management will 
ensure that fuel producers and blenders actively avoid these materials 
in favor of feedstocks that are eligible, such as agricultural 
commodities, energy crops, and farm residues.
    To explore this question more thoroughly, it is important that we 
define what is meant by ``expand forest management''. There are several 
perspectives on what an expansion of Federal forest management could 
entail and whether or not that would be a positive thing. In the view 
of many organizations, including EESI, there are many acres of Federal 
forestland that could benefit from silvicultural activities intended to 
restore past ecological conditions, maintain ecosystem functions, or 
improve the value of forest stands from an economic or ecological 
perspective. As I outlined in my testimony, harvesting biomass can be 
an effective tool in many forests for creating habitat, promoting 
biodiversity, improving timber stocks, slowing or preventing pest 
infestations, reducing fire risk, and achieving a number of other 
objectives. These activities are referred to by a number of different 
names, including ecosystem restoration, timber stand improvement, and 
forest stewardship, but they all have in common the fact that they 
provide social, economic, and ecological benefits above and beyond the 
value of the wood products that are produced. These activities are not 
appropriate in all forests, but they can be valuable silvicultural 
tools where they are appropriate.
    Unfortunately, in today's market most stand improvement activities 
are either only marginally profitable or, more usually, a net 
expenditure (these activities are commonly known as `pre-commercial 
thinnings'). Although some industrial forest owners may have the 
capital to treat these activities as long-term investments, most non-
industrial private forest (NIPF) owners, as well as the Federal 
Government, cannot afford to invest in these treatments on any 
meaningful scale. Because of this, the U.S. Forest Service has included 
developing new and expanded markets for bioenergy and bio-based 
products as an important goal of its woody biomass utilization 
strategy.\1\ The exclusion of this material from the RFS will make it 
more difficult to develop markets for low-quality wood, small diameter 
trees, brush, and other low value forest products. Eliminating this 
exclusion is a necessary first step to developing these markets and 
providing the capital that is necessary to achieve national stewardship 
and forest restoration objectives.
---------------------------------------------------------------------------
    \1\ Patton-Mallory, Marcia, ed. 2008. Forest Service, U.S. 
Department of Agriculture woody biomass utilization strategy. 
Washington, D.C.: U.S. Department of Agriculture, Forest Service. 17 p.
---------------------------------------------------------------------------
    In contrast to the preceding perspective, a number of groups and 
individuals see expanded forest management in Federal forests as 
essentially a dangerous precedent to set. A minority of these groups 
ascribe to a philosophy that sees all intensive human activities as 
inappropriate in public forests. The majority of these groups, however, 
are more concerned with specific environmental impacts they believe 
would result from an expansion of existing management. This viewpoint 
tends to downplay the value of stewardship activities and focus on the 
negative consequences for forest ecosystems, wildlife, soils, and water 
resources that could result from increased management activities. In 
addition, people with this perspective frequently do not trust Federal 
land managers to manage public resources responsibly and for the 
greater good of the public. There is validity to many of these 
concerns. Sloppy or inappropriate management practices can undoubtedly 
have unintended environmental consequences.\2\ In some cases, the 
impacts of these practices on specific processes and components of 
forest ecosystems are not yet even fully understood.\3\ History and 
experience also provide reasons to warrant concern; past (and existing) 
markets for biomass products, such as charcoal and woodchips, have 
often led to clear cutting and other destructive management 
practices.\4\-\6\
---------------------------------------------------------------------------
    \2\ R.A. Young and R.L. Giese (Ed.). Introduction to Forest 
Science. 2nd Ed. John Wiley & Sons, Inc., 1990. 586 p.
    \3\ Hacker, J.J. 2005. Effects of Logging Residue Removal on Forest 
Sites: A Literature Review. West Central Wisconsin Regional Planning 
Commission. 29 p.
    \4\ Kambewa, P., B. Mataya, K. Sichinga, and T. Johnson. 2007. 
``Charcoal: The Reality, A Study of Charcoal Consumption, Trade, and 
Production, in Malawi.'' International Institute for Environment and 
Development. 58 p.
    \5\ The Southern Center for Sustainable Forests (Duke). 2000. 
``Economic and Ecological Impacts Associated With Wood Chip Production 
in North Carolina, Integrated Research Project Summary.'' Prepared for 
the North Carolina Department of Environment and Natural Resources. 82 
p.
    \6\ Governor's Advisory Committee on Chip Mills. ``Chip Mill 
Experiences in Other States.'' Missouri Department of Natural 
Resources. http://www.dnr.mo.gov/chipmills/fr_sectionh.htm (accessed 
August 8, 2008).
---------------------------------------------------------------------------
    For the reasons mentioned above, some people feel that incentives 
such as the RFS could promote widespread and destructive practices 
across many of the country's national forests and other public lands. 
Implicit in this thinking, however, is the assumption that Federal land 
management is primarily driven by the marketplace. This is far from 
true. The marketplace is certainly important in determining what 
projects are feasible or preferable at a given time, but the broad 
national objectives behind Federal land management, such as 
biodiversity, wildlife habitat, watershed protection, and resource 
production, are established by law. Several land management acts, 
including those for the national forests (16 U.S.C. 1604), BLM public 
lands (43 U.S.C. 1712), and the National Wildlife Refuge System (16 
U.S.C. 668dd), collectively identify these broad objectives and require 
individual management units to prepare comprehensive management plans 
illustrating how the broad objectives translate into local, on-the-
ground management prescriptions. These management plans are open to 
public comment and judicial review. Additional environmental laws, 
notably the Endangered Species Act and national Environmental 
Protection Act (NEPA), help to further ensure that public land 
management activities are driven by principles of good stewardship and 
not merely by the demands of the marketplace.
    Another error exists in some groups thinking that all public lands 
would be open to biomass harvesting. This a misplaced fear. Out of the 
nearly 672 million acres of public land, more than 105 million acres 
(815.7 percent) are currently classified as wilderness \7\ and are 
therefore off-limits to any commercial activities (16 U.S.C. 1133). 
Many more acres are inaccessible due to topography, infrastructure, or 
remoteness.\8\
---------------------------------------------------------------------------
    \7\ U.S. Congressional Research Service. Federal Land Management 
Agencies: Background on Land and Resources Management. RL32293. 75 p.
    \8\ Oak Ridge National Laboratory (DOE) and USDA. DOE GO-102995-
2135, Biomass as Feedstock for a Bioenergy and Bioproducts Industry: 
Feasibility of a Billion-Ton Annual Supply. April 2005.
---------------------------------------------------------------------------
    To summarize my answer, I do believe that including public lands in 
future versions of the RFS will aid considerably in providing needed 
financial incentives to expand forest management where that management 
is in line with national management directives, mandatory site-specific 
management plans, and public law. Existing restrictions will largely or 
entirely prevent the expansion of management activities that fly in the 
face of statutory stewardship objectives and environmental review. 
Furthermore, this financial incentive will not expand management in the 
millions of acres that are classified as Wilderness or are otherwise 
inaccessible.

    Question 2 Your testimony discussed the effect of forest thinning 
and silvicultural activities on the ability of a watershed to function 
properly and increase water yield. Can you explain how thinning a 
forest can be part of a stewardship plan to improve water quality and 
forest health?
    Answer. Water is one of the most valuable of the many goods and 
services produced in forests. Approximately \2/3\ of drinking water in 
the United States is generated from forested landscapes.\9\ The 
Congress recognized this important fact in the Organic Act of 1897, 
establishing that one of the primary purposes of the national forest 
system would be ``to secure favorable conditions of water flows'' (16 
U.S.C. 471).
---------------------------------------------------------------------------
    \9\ The National Academy of Sciences. July 2008. Report in Brief: 
Hydrologic Effects of a Changing Forest Landscape. 4 p.
---------------------------------------------------------------------------
    As water moves through a forested watershed, it is in a state of 
constant interaction with soils, trees, and other forest vegetation. 
Evaporation, transpiration, infiltration, surface flow, and other 
measures of hydrological function are all directly and indirectly 
influenced by:

    (1) stand-level characteristics, such as canopy cover and tree 
        density, and

    (2) landscape-level characteristics, such as stand heterogeneity 
        and species diversity.

    For this reason, any activity that modifies vegetation, including 
thinning, has the potential to alter the flow, storage, and chemical 
properties of water in the watershed. These interactions are complex, 
however, and vary widely from forest to forest. Like all aspects of 
forest management, determination of appropriate management activities 
must be made on a stand-by-stand basis, using site-specific conditions 
and management objectives as a guide.
    The relationship between water quantity and forest coverage is 
especially complex. Broadly speaking, harvesting activities can be used 
to temporarily increase streamflow after storm events 
\10\-\13\ but the effect is generally short-lived and 
dependent on repeated treatments.\14\ Harvests and thinning activities 
can also be effective at increasing accumulation of snow under the 
forest canopy.\15\ Snowpacks are an important source of water across 
much of the United States and a deeper snowpack translates into greater 
total storage of water. On some forests, however, thinning can also 
result in accelerated loss of the snowpack and higher peak flows,\16\ 
increasing the chances of flooding. Early snowpack melting is highly 
correlated with an increase in wildfires.\17\ As climate change 
exacerbates this effect, we will want to be even more careful that 
forest management activities do not have unintended consequences. Local 
conditions, including flood risk and wildfire conditions, must always 
be carefully scrutinized to ensure that harvesting activities will help 
achieve water quantity objectives.
---------------------------------------------------------------------------
    \10\ Troendle, C.A. 1983. The potential for water yield 
augmentation from forest management in the Rocky Mountain region. 
Journal of the American Water Resources Association 19(3): 359-373.
    \11\ Stednick, J.D. 1996. Monitoring the effects of timber harvest 
on annual water yield. Journal of Hydrology 176: 79-95.
    \12\ R.A. Young and R.L. Giese (Ed.). Introduction to Forest 
Science. 2nd Ed. John Wiley & Sons, Inc., 1990. 586 p.
    \13\ Brooks, K.N., P.F. Ffolliot, H.M. Gregersen, and L.F. DeBano. 
Hydrology and the management of watersheds. 3rd Ed. Blackwell 
Publishing, 2003. 547 p.
    \14\ The National Academy of Sciences. July 2008. Report in Brief: 
Hydrologic Effects of a Changing Forest Landscape. 4 p.
    \15\ Brooks, K.N., P.F. Ffolliot, H.M. Gregersen, and L.F. DeBano. 
Hydrology and the management of watersheds. 3rd Ed. Blackwell 
Publishing, 2003. 547 p.
    \16\ Brooks, K.N., P.F. Ffolliot, H.M. Gregersen, and L.F. DeBano. 
Hydrology and the management of watersheds. 3rd Ed. Blackwell 
Publishing, 2003. 547 p.
    \17\ Westerling, A.L., H.G. Hidalgo, D.R. Cayan, T.W. Swetnam. 
2006. Warming and earlier spring increase Western U.S. forest wildlife 
activity. Science 313: 940-943.
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    Thinning and harvesting activities can also be used to achieve 
water quality objectives, especially in the context of fire management. 
High-severity wildfires can increase erosion, and, ultimately, sediment 
flow to water bodies.\18\ Through a judicious thinning of understory 
vegetation and overly dense stands, often called hazardous fuel 
reduction, the frequency and severity of wildfires can be effectively 
reduced in some forests.\19\-\23\ However, hazardous fuel 
reduction is not appropriate for all forest types.\24\ Where this 
practice is appropriate, consideration must be given to possible trade-
offs between water quality benefits and potential negative impacts, 
such as soil compaction and erosion from the use of heavy 
machinery.\25\
---------------------------------------------------------------------------
    \18\ Brooks, K.N., P.F. Ffolliot, H.M. Gregersen, and L.F. DeBano. 
Hydrology and the management of watersheds. 3rd Ed. Blackwell 
Publishing, 2003. 547 p.
    \19\ Agee, J.K. and C.N. Skinner. 2005. Basic principles of forest 
fuel reduction treatments. Forest Ecology and Management 211:83-96.
    \20\ Brose, P. and D. Wade. 2002. Potential fire behavior in pine 
flatwood forests following three different fuel reduction techniques. 
Forest Ecology and Management 163: 71-84.
    \21\ Pollet, J. and P.N. Omi. 2002. Effect of thinning and 
prescribed burning on crown fire severity in ponderosa pine forests. 
International Journal of Wildland Fire 11(1)1-10.
    \22\ Stephens, S. L. 1998. Evaluation of the effects of 
silvicultural and fuels treatment on potential fire behavior in Sierra 
Nevada mixed-conifer forests. Forest Ecology and Management. 105:21-35.
    \23\ Graham, R. T., S. McCaffrey, and T.B. Jain (tech. eds.) 2004. 
Science basis for changing forest structure to modify wildfire behavior 
and severity. Gen. Tech. Rep. RMRS-GTR-120. Fort Collins, CO: U.S. 
Department of Agriculture, Forest Service, Rocky Mountain Research 
Station. 43 p.
    \24\ Odion, D.C., E.J. Frost, J.R. Strittholt, H. Jiang, D.A. 
Dellasala, and Max. A. Moritz. 2004. Patterns of Fire Severity and 
Forest Conditions in the Western Klamath Mountains, California. 
Conservation Biology 18:4 927-936.
    \25\ J.J. Rhodes, W. L. Baker. 2008. Fire probability, fuel 
treatment effectiveness, and ecological tradeoffs in Western U.S. 
Public Forests. The Open Forest Science Journal 1:1-7.
---------------------------------------------------------------------------
    The hydrological consequences of thinning or any other form of 
forest management should never be considered in isolation, but as part 
of an overall management strategy to achieve multiple stewardship 
objectives, including habitat management, timber production, ecological 
restoration, recreation, and aesthetics. To this end, a management plan 
is an essential tool on both private and public lands, the latter of 
which already require exhaustive plans (see Question 1). A management 
plan is a comprehensive document that identifies objectives and 
prescribes a series of management activities that will achieve those 
objectives in a complementary fashion. In some forests, objectives will 
be best achieved by allowing stands to develop on their own, but in 
many forests some mixture of harvests, thinning, and other 
silvicultural activities will be valuable tools, especially where 
ecosystem processes, stand structure, and habitat have been adversely 
impacted by past management activities. In these forests, restoration 
activities will generate woody biomass in the form of logging slash, 
brush, and low-quality trees that often can be available for use in the 
production of renewable fuels.
    The most important thing that must be done to preserve and maintain 
both water quantity and water quality is to ensure that forested 
watersheds remain forested. When forests are replaced by urban sprawl, 
suburban development, or other non-forest uses, watershed functioning 
can change drastically and often for the worse.\26\ Given increasing 
financial pressures to sell or develop forestlands across the country, 
providing financial incentives for landowners to keep and maintain 
forests should be a crucial component of any policy or strategy that 
seeks to protect water supplies. Unfortunately, entire watersheds 
composed primarily of private forestland are effectively excluded from 
the Renewable Fuel Standard due to the narrow definition of renewable 
biomass included in the law, specifically section 42 U.S.C. 
7545(o)(1)(I)(iv).
---------------------------------------------------------------------------
    \26\ Brooks, K.N., P.F. Ffolliot, H.M. Gregersen, and L.F. DeBano. 
Hydrology and the management of watersheds. 3rd Ed. Blackwell 
Publishing, 2003. 547 p.
---------------------------------------------------------------------------
    In New York State, the Watershed Forestry Program (WFP) \27\ \28\ 
is an excellent example of a program promoting private forest 
stewardship as a means of achieving broad watershed objectives. This 
program was established in the 1990s, when the declining quality of 
drinking water in New York City forced decision makers to choose 
between installing an expensive filtration system or to find a way to 
protect and preserve the upstream watershed. Unlike municipal 
watersheds dominated by public or state land, 90 percent of upstate New 
York is privately-owned by a large number of farmers and non-industrial 
forest owners; 75 percent of this watershed is forested. Although at 
the time filtration was the standard approach, far-sighted officials 
decided to work with upstate landowners to prevent urban development 
and promote best management practices on farms and forests. To 
accomplish this, the Watershed Agricultural Council (WAC) was 
established as a liaison between the city and rural landowners. The WFP 
was created within WAC to focus on stewardship of forested landscapes. 
The program consists of cost-share programs, technical assistance, 
education/outreach and other incentives to help landowners develop 
management plans, implement best management practices, and improve the 
economic viability of working forests. The success of this program is 
dependent on this economic viability to preserve the diverse, forested 
landscape that provides clean, reliable water supplies downstream. By 
excluding these lands from the RFS and removing an important incentive 
for a valuable product (renewable fuels), the current biomass 
definition will have an effect directly opposed to the goals of this 
program.
---------------------------------------------------------------------------
    \27\ V. Brunette and R.H. Germain.2003. Forest Management in the 
New York City Watershed. 0649-B3. Submitted to the XII World Forestry 
Congress.
    \28\ Watershed Agricultural Council. Watershed Agricultural 
Council's Forestry Program: 10-Year Anniversary: 1997-2007. 40 p.
---------------------------------------------------------------------------
    To summarize, there are a number of circumstances in which forest 
management activities such as thinning can be used to help achieve 
objectives for both water quantity and quality. There are also a number 
of circumstances in which thinning can have negative impacts. Forest 
management activities must always be tailored to the specific 
ecological characteristics and objectives of the forest under 
consideration. Thinning can be a valuable tool in managing forests for 
a multitude of values and objectives, including ecosystem restoration, 
habitat management, watershed maintenance, and other forest health 
objectives. Engaging landowners in multiple-value forest stewardship 
can be effective in preserving a forested landscape against development 
and urban encroachment. This is the single most important thing that 
can be done to ensure healthy watersheds and clean, plentiful water for 
generations to come.

    Question 3. If woody biomass cannot count against the RFS, what 
else could it be used for?
    Answer. There is a wide selection of products that can be made from 
woody biomass in addition to renewable fuels. It is preferable, 
however, that we retain the fullest possible range of options for 
utilization of this renewable resource, so that communities wishing to 
utilize woody biomass can take full advantage of the regional 
variations in market demand, business opportunities, and economic 
constraints. Biomass in all its forms will need to be an important 
component of any strategy to address global climate change, one of the 
biggest environmental and social hazards facing the planet today. The 
most important component in such a strategy must be the substitution of 
renewable alternatives for fossil fuels wherever they are being used--
in the production of electricity, heat, liquid fuels, and other 
chemicals and products. There are, however, a number of renewable 
technologies that can be used in the production of electricity and 
heat, including wind, solar, hydrokinetic, tidal, and geothermal 
technologies. On the other hand, biomass is the only viable, short-term 
alternative to petroleum-based transportation fuels. Until we have the 
capacity to power a substantial number of vehicles with renewable 
electricity or other renewable technologies, renewable fuels will 
remain an essential tool in the effort to reduce oil consumption and 
stall the acceleration of climate change.
    In the absence of appropriate incentives for renewable fuels, there 
are a number of products that can be made from woody biomass. Pulp and 
paper mills are the traditional end users of small trees, low-quality 
wood, and other sources of biomass unusable for sawn wood products. An 
increasing number of lumber mills are also able to produce boards, 
poles, fence posts, and other solid wood products from small-diameter 
and low-quality biomass. Engineered wood products, such as chip board 
and oriented strand board (OSB), are another possible outlet for this 
material. There are also a number of other energy products (in addition 
to renewable fuels) that can be produced from biomass. Woodchips, 
sawdust, and hog fuel can be used to produce electricity in clean, low-
carbon biopower plants. Wood pellets, firewood, and wood chips can 
provide space and process heating. Woody biomass can also be combusted 
at high-efficiency in combined-heat-and-power (CHP) operations. 
Additionally, a wide variety of chemicals, plastics, foams, and other 
bio-based products can be produced from wood and cellulosic materials.
    In the face of such an impressive menu of options, it is tempting 
to draw the conclusion that the exclusion of woody feedstocks from the 
RFS is of no consequence--that there are plenty of other uses and 
plenty of other market opportunities for this renewable resource. This 
would be a mistaken conclusion for a number of reasons. It is 
preferable that markets for biomass be as diverse and inclusive as 
possible. Competition for woody biomass among a larger number of end 
users will help ensure landowners the best price for their biomass and 
encourage them to invest in better management practices. Lack of 
competitive markets for biomass over the years has been one of the 
factors leading to limited use of stand improvement thinning and other 
long-term forest investments. This has also led to an increased 
pressure to sell land to developers.
    These products can all be produced singly, but greater efficiencies 
are often achieved through producing two or more products in an 
integrated biorefinery. By producing a mixture of products 
simultaneously, an integrated biorefinery can utilize a greater 
proportion of the chemical constituents found in biomass feedstocks, 
adding value to the production chain and reducing waste. Many 
integrated biorefineries will likely produce renewable fuels as one of 
the higher value products. If many woody feedstocks are excluded from 
the RFS, the entire suite of products being produced will be rendered 
less competitive and perhaps non-competitive.
    Whether one or multiple products are produced, there is 
considerable regional variability in market demand, economic 
conditions, production costs, infrastructure, natural resources, and 
local laws. Local market opportunities (and constraints) will dictate 
what products are most economically feasible in a given state or 
region. If the demand for transportation fuels in a region is the 
strongest, then renewable fuel producers may be able to offer the best 
price for material in comparison to other buyers. By removing biofuel 
production from the equation, a complete market does not exist and the 
true value of the material may never be realized. Ultimately, it should 
be up to the community to decide the best use of its forest resources.
    For example, of the 7.7 million households in the United States 
that use heating oil for space heating, 5.3 million (69 percent) of 
these households are located in the Northeast states.\29\ Within these 
states,\30\ 52 percent of all home heating utilizes heating oil. 
Unfortunately, the price of this essential commodity is escalating 
rapidly. As of August 5, 2008, the NYMEX Futures Price for heating oil 
was $3.28/gal, up from $1.94/gal a year ago.\31\ As these prices 
continue to rise, the generation of thermal energy will become an 
increasingly attractive use for local biomass resources, including wood 
chips, cord wood, wood pellets, or biomass-based heating fuel). In 
contrast to the Northeast, states in the West \32\ use very little 
heating oil. Only Idaho, Montana, Nevada, Oregon, South Dakota, Utah, 
and Washington use heating oil at all, and in no more than seven 
percent of homes. While this region may not have the demand for heating 
oil substitutes, there is a significant demand for transportation 
fuels. In 2006 the western United States used approximately 1,167 
million barrels of oil for transportation purposes, approximately 23 
percent of the national total.\33\ Renewable fuels may very well be the 
most economically feasible use of woody biomass throughout the west. 
And indeed the West has ample stocks of biomass in its forests, many of 
which are on public lands and could benefit from thinning activities, 
but these are excluded from the RFS.
---------------------------------------------------------------------------
    \29\ United States Department of Energy. ``Northeast Home Heating 
Oil Reserve.'' United States Department of Energy. http://
www.fossil.energy.gov/programs/reserves/heatingoil/ (accessed August 
11, 2008).
    \30\ Northeast states include CT, MA, ME, NH, NY, RI, and VT.
    \31\ Energy Information Administration. ``New York Harbor No. 2 
Heating Oil Future Contract 1.'' Energy Information Administration. 
http://tonto.eia.doe.gov/dnav/pet/hist/rhoc1d.htm (accessed August 11, 
2008).
    \32\ Western states include AZ, CA, CO, ID, MT, NV, NM, OR, SD, UT, 
WA, and WY.
    \33\ Energy Information Administration. ``Table F9a: Total 
Petroleum Consumption Estimates by Sector, 2006.'' Energy Information 
Administration. http://www.eia.doe.gov/emeu/states/sep_fuel/html/
fuel_use_pa.html (accessed August 11, 2008).
---------------------------------------------------------------------------
    The argument has been made that renewable fuels are a less 
sustainable use for forest biomass than heat or electricity. This is a 
somewhat misleading argument. It is true that there is a finite supply 
of biomass that can be sustainably removed from a forest at any given 
point in time. It is also true that sustainability should be at the 
core of all forest management decisions. The end use of the materials 
being removed, however, does not affect conditions in the woods. What 
matters is not what product is being produced, but how the harvest will 
improve or degrade the forest ecosystem. The impact of a given harvest 
on habitat, biodiversity, and water quality will be the same, 
regardless of whether the wood is shipped to a CHP plant, a renewable 
fuels producer, or a lumber mill.
    In regions with limited demand for heat and power, a new market for 
renewable fuels could provide financial incentives to engage in 
restoration forestry, habitat management, stand improvement thinning 
and other proactive stewardship activities. Incentives which add value 
to currently undervalued material could help defray some of the cost of 
improving forest resources or restoring desired ecosystem conditions. 
By getting the most value for harvested woody biomass, the limited 
budgets that are available for these activities can be stretched to 
achieve more. On public lands, especially, funding for stand 
improvement and restoration activities is decreasing due to budget cuts 
and the escalating costs of fire fighting.\34\ Improving the cost-
competitiveness of woody biomass (with incentives such as the RFS) will 
open up private sector capital that can be leveraged to achieve these 
and other important stewardship objectives.
---------------------------------------------------------------------------
    \34\ USDA Forest Service. February 2008. Fiscal Year 2009, 
President's Budget, Budget Justification. 426 p.
---------------------------------------------------------------------------
    When discussing alternative uses for biomass, it is important to 
acknowledge that the RFS language has set a precedent regarding the 
definition of renewable biomass. Future Federal and state laws, such as 
a Renewable Portfolio Standard or renewable tax credits, could adopt 
this definition, erecting a barrier for the use of biomass for many 
other purposes. For these reasons, it is important that we have a 
solid, agreed-upon definition of renewable biomass that promotes 
sustainability, innovation and appropriate technologies at the 
appropriate scale. A suite of incentives that builds off of the same 
definition will provide a level playing field among the different 
possible uses for wood.

    Question 4. Do you think EPA will be able to track if wood procured 
from a tree plantation versus a naturally regenerated forest was used 
to count against the RFS? How do you think this tracking and process 
will work?
    Answer. Tracking forest products from woods to consumer is 
notoriously difficult, but it is increasingly gaining popularity among 
conservationists, sustainability experts, and the forest products 
industry as a solution to the unsustainable (and often illegal) 
exploitation of global forest resources.\35\ Even though there are 
numerous problems and difficulties with certification systems, many 
companies involved in both the forest products and the retail industry 
are moving in this direction. Companies such as Lowe's are currently 
purchasing and marketing wood products by the Forest Stewardship 
Council as a means to avoid products from endangered forests as well as 
give customers the ability to make an informed purchase.\36\ As the 
public becomes more engaged and informed about sustainability issues, 
they will increasingly look to make sure that products sold in the 
United States are produced in a responsible manner. A number of 
provisions in the Renewable Fuel Standard (RFS), including the 
greenhouse gas screens, essentially require the EPA to implement some 
type of tracking system to ensure that production of feedstocks, 
including woody biomass, meet emissions screens and other requirements. 
Although this process will not be easy, it is not an impossible task. 
The development of an effective tracking system could be an 
opportunity, not only to ensure that greenhouse gas screens are met, 
but also to verify that feedstocks are produced using sustainable 
management practices.
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    \35\ Kemper, S. Spring 2008. ``Forest Destruction's Prime 
Suspect''. Environment Yale 7(1):4-31.
    \36\ Lowe's. ``Lowe's Wood Policy.'' Lowe's. http://www.lowes.com/
lowes/lkn?action=pg&p=PressReleases/wood_policy.html (accessed August 
12, 2008).
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    Implementing a feedstock tracking system will require some hard 
work and creativity on the part of EPA, but the task is unnecessarily 
complicated by the narrow and exclusionary nature of the definition of 
renewable biomass included in the RFS. This definition will not only 
make tracking more difficult (and consequently more expensive), but it 
will also serve to focus the EPA's tracking efforts on details that are 
entirely irrelevant to forest sustainability. The definition draws 
distinctions between sources of woody biomass based primarily on two 
criteria:

    (1) whether the material came from public or private forests and

    (2) whether the trees being cut come from plantations or naturally-
        regenerated stands.

    Unfortunately, neither of these criteria are true sustainability 
criteria. The first only tells you who owns the forest and the second 
is only one single silvicultural detail arbitrarily selected out of the 
many such details that could describe how a forest is being managed. By 
themselves, neither ownership nor regeneration system will give you any 
information at all about whether or not a forest is being managed 
sustainably. The sustainability of a managed forest can only be 
assessed by looking at the whole suite of management practices, 
management objectives, and ecological conditions found in the forest at 
hand.
    Not only are these criteria uninformative to the sustainability 
question, but they will add a variety of logistical complexities to the 
tracking process, especially the distinction between planted and 
naturally-regenerated stands. Many forests are composed of a mixture of 
stands relying on both artificial (planted) and natural regeneration. 
Often, there is a mixture of planted trees and trees that grew from a 
seed or a sprout (natural regeneration) within the same stand. Under 
these circumstances, it is unlikely that loggers will be able to 
separate each stem, branch, and chunk of biomass in the woods by 
whether or not it came from a planted tree. In many cases, it is not 
even possible to determine by looking at a mature tree whether it was 
planted or seeded naturally many decades before.
    Similar problems will arise with any biomass feedstocks that do not 
originate exclusively from a single forest, such as woody residues from 
sawmills, furniture mills, and pulp mills. These residues are an 
attractive feedstock because they are concentrated at the mill and may 
require less transportation and processing. The production of renewable 
fuels from these residues can provide an additional revenue stream for 
mills, whether those residues are sold, or better yet, utilized on 
location as an integrated biorefinery. Additionally, mill residues are 
an attractive feedstock from an environmental perspective, as they are 
byproducts of existing industries and do not require any direct 
increase in the number of trees being harvested. Unfortunately, 
industrial residues are not explicitly included in the current 
definition as a separate allowable category, and EPA will, therefore, 
have to track these residues to the ultimate source. This is not an 
easy task, however. Many mills source materials from a mixture of 
Federal lands, plantations, naturally-regenerated forests, and foreign 
imports. Unless residues were to be segregated by their exact source, 
it would be extremely difficult to determine the exact source of the 
residue and, therefore, the portion of available mill residue that 
would be eligible under the current rules of the Renewable Fuel 
Standard would be unclear. To require mills to segregate residues based 
on source could also increase operational costs of a biorefinery and 
act as a disincentive. Currently there are two Department of Energy-
funded biorefinery projects in Maine \37\ and Wisconsin \38\ co-located 
with pulp mills to produce biofuels. If we are going to invest public 
money in these important technologies, we should be careful to ensure 
that government incentives and programs work in a complementary fashion 
and are not at cross-purposes with each other.
---------------------------------------------------------------------------
    \37\ ``RSE Pulp & Chemical, LLC.'' Department of Energy. 2008.
    \38\ ``Flambeau River Biofuels LLC.'' Department of Energy, 2008.
---------------------------------------------------------------------------
    Non-domestic sources of biomass will likely be even more difficult 
to track, as an enormous quantity of imported wood and wood products is 
of unknown origin.\39\ The illegal trafficking of globally harvested 
and smuggled timber compounds this problem. The Food, Conservation, and 
Energy Act of 2008 (the farm bill) included amendments to the Lacey Act 
intended to reduce traffic in illegal timber. The Lacey Act was 
originally enacted to control the illegal trafficking of wildlife 
across state lines.\40\ The farm bill amended the act to prohibit the 
transfer of all illegally harvested wood and wood products into the 
United States. If implemented properly, the Lacey Act amendment 
provides a means to ensure that wood sourced for products as well as 
biofuels production has been harvested legally according to domestic 
and international laws. This is an important piece of legislation, but 
it only protects against the importation of illegal wood products, not 
legal products produced unsustainably. The two often go together, but 
not always. EPA will need to determine how best to label legally-
imported biomass and count it towards the RFS.
---------------------------------------------------------------------------
    \39\ Kemper, S. Spring 2008. ``Forest Destruction's Prime 
Suspect''. Environment Yale 7(1):4-31.
    \40\ Office of Law Enforcement. ``Pacific Region Law Enforcement 
History.'' United States Fish and Wildlife Service. http://www.fws.gov/
pacific/lawenforcement/law6.html (accessed August 12, 2008).
---------------------------------------------------------------------------
    Despite the difficulties in tracking wood products, there are a 
number of examples of tracking systems currently in place. The Forest 
Stewardship Council's (FSC) forest certification system is one example 
of such a tracking system. Under FSC, third-party auditors certify 
forests that are managed in accordance with a specific set of 
sustainability criteria. All wood products, including furniture, 
timber, pulp, and paper that originate from a certified forest can be 
sold with the FSC label. This demonstrates to consumers that 
responsible forestry activities have taken place throughout all steps 
of production for a wood product. An important component of this system 
is chain-of-custody certification, in which all companies involved in 
the production or transfer of certified wood products must be certified 
by the FSC and documentation must be kept by each company detailing the 
sale or transfer of any products. This establishes a paper trail and 
allows one to trace any wood product marked with the FSC label back to 
an FSC certified forest. Under FSC chain of custody rules, producers of 
wood products containing a mixture of certified and uncertified wood 
have the option of labeling their products with the FSC Mixed Sources 
label, assuming that uncertified wood meets certain basic standards of 
legality, sustainability and social justice.\41\
---------------------------------------------------------------------------
    \41\ ``FSC Standard for Chain of Custody Certification.'' Forest 
Stewardship Council, 2004.
---------------------------------------------------------------------------
    It remains to be seen exactly how EPA will propose to track and 
label biomass feedstocks for the RFS or how they will handle blended 
feedstocks or feedstocks from multiple sources. They may use a manifest 
chain-of-custody system, like FSC, or they might develop a new 
approach. Whatever they decide, it is almost certain that the 
exclusionary nature of the renewable biomass definition will inject 
difficulties into the process and direct EPA's efforts away from 
tracking the overall sustainability of biofuel feedstocks. There are 
two solutions that can simultaneously make tracking biomass easier and 
more effective:

    (1) Rewrite the definition of renewable biomass to include genuine 
        measures of sustainability instead of exclusions. Woody biomass 
        should be eligible from any forest, public or private, 
        plantations or natural forests, as long as harvesting is done 
        in accordance with best management practices, improves and 
        maintains ecosystem services, and promotes other management 
        objectives.

    (2) Require management plans for all forests participating in the 
        RFS, public and private. As a comprehensive record of forest 
        resources and silvicultural actions, management plans could 
        help simplify tracking how biomass is produced. Without a 
        management plan in place, it can be incredibly difficult, if 
        not impossible, to determine the source of biomass coming from 
        a particular ownership, especially whether it was grown using 
        natural or `planted' regeneration. Management plans are a key 
        component of FSC certification and other existing forest 
        certification systems.

    These two changes would go a long toward simplifying the tracking 
process and ensuring that the data being tracked are relevant to the 
sustainability of the management practices being used, instead of just 
ownership and sourcing.

    Question 5. Are you concerned about potential biofuel plants 
bypassing the United States and ending up building in Canada or 
elsewhere, especially those wanting to use woody biomass, because of 
the limitations of the RFS' renewable biomass definition?
    Answer. Yes, I am very worried about renewable fuel companies 
deciding to research, develop and commercialize conversion technologies 
for wood outside of the United States. The RFS language rules out a 
number of feedstocks, including substantial quantities of woody biomass 
from both public and private lands. The exclusionary nature of this 
definition cannot be anything but a disincentive to companies looking 
to produce wood-based renewable fuels in the United States. It is very 
probable that we will see a migration of capital, technology, and 
talent to countries that have policies in place to encourage and 
incentivize this technology. With this loss, we will also lose a great 
opportunity to develop the declining forest products industry into a 
robust and competitive industry producing a variety of products, 
including renewable fuels, from woody biomass. Without such a major 
turnaround, the production of pulp and timber will likely continue to 
move offshore.
    Canada is one likely destination for biofuels companies wishing to 
relocate. In December 2006, Rona Ambrose, Canadian Minister of the 
Environment, announced that the government would regulate the average 
renewable content of gasoline requiring fuels to contain five percent 
renewable content by 2010 (essentially a Renewable Fuel Standard).\42\ 
On June 26, 2008, the Canadian Environmental Protection Act was amended 
to give the government the authority to enact these regulations.\43\ 
Eligible feedstocks were not explicitly defined in the law; however, 
the legislative summary of the bill authorizing this standard refers 
explicitly to forest biomass when describing next-generation renewable 
fuels.\44\ If the final Canadian regulation broadly includes woody 
biomass, as it appears it will, this mandate (along with the enormous 
forest resource in Canada) will be a huge incentive for companies 
wishing to produce wood-based renewable fuels.
---------------------------------------------------------------------------
    \42\ ecoACTION. ``Canada's New Government takes new step to protect 
the environment with Biofuels.'' Government of Canada. http://
www.ecoaction.gc.ca/news-nouvelles/20061220-eng.cfm (accessed August 
14, 2008).
    \43\ ecoACTION. ``The Government of Canada Biofuels Bill Receives 
Royal Assent.'' Government of Canada. http://news.gc.ca/web/view/en/
index.jsp?articleid=407879 (accessed August 14, 2008).
    \44\ Parliamentary Information and Research Service. ``Bill C-33: 
An Act to Amend the Canadian Environmental Protection Act, 1999.'' 
Parliamentary Information and Research Service. 2007.
---------------------------------------------------------------------------
    On top of this, Canada also has a number of funding programs in 
place to encourage the production of renewable fuels, including 
Sustainable Development Canada. This program provides funding for a 
number of renewable energy companies, including Woodland Biofuels, Inc, 
based out of Ontario. Woodland Biofuels is currently planning to 
construct a 20 million gallon per year cellulosic biofuel facility 
utilizing woody biomass. The facility will be partially funded by $9.8 
million in assistance from Sustainable Development Technology 
Canada.\45\ Iogen Corporation is another Canadian biofuels company 
receiving funding under this program. In 2007, Iogen received an $80 
million grant from the U.S. Department of Energy to construct a 
commercial-scale cellulosic biorefinery in Shelley, ID using wheat 
straw as the primary feedstock. However, in June of 2008 Iogen 
suspended its operations in Idaho in favor of constructing a facility 
in Canada. Iogen's reasoning for the move was that DOE failed to 
convince investors that $250 million in loan guarantees would be 
appropriated.\46\-\48\ According to Iogen, the NextGen 
Biofuels Fund, established by Sustainable Development Technology Canada 
in coordination with the Canadian government, will support up to 40 
percent of eligible project costs.\49\ This is one specific example of 
a facility moving to Canada because of the greater value and 
reliability of the overall incentive package offered there.
---------------------------------------------------------------------------
    \45\ Woodland Biofuels, Inc. ``Woodland Biofuels--Engineering 
Almost Complete.'' http://www.woodlandbiofuels.com/d-4-ournews.htm 
(accessed August 11, 2008).
    \46\ Ellis, Sean. ``Iogen Suspends Operations in Idaho.'' Idaho 
Farm Bureau Federation.
http://www.idahofb.org/news/news.aspx?n=n&id=15507 (accessed August 11, 
2008).
    \47\ Fehrenbacher, Katie. ``Iogen Suspends U.S. Cellulosic Ethanol 
Plant Plans.'' Earth2Tech. http://earth2tech.com/2008/06/04/iogen-
suspends-us-cellulosic-ethanol-plant-plans/ (accessed August 14, 2008).
    \48\ ``Iogen Nixes Idaho for Ethanol Plant, Picks Saskatchewan.'' 
Soyatech. http://www.soyatech.com/news_story.php?id=8326 (accessed 
August 14, 2008).
    \49\ ``Major Step Forward for Proposed World Leading Ethanol 
Biorefinery in Canada.'' Iogen Corporation. 2008.
---------------------------------------------------------------------------
    Outside of Canada, there are a number of examples of renewable 
energy corporations moving operations or shifting exports from one 
country to another one offering better incentives. In 2006, Abengoa 
Bioenergy, Inc. opened a pilot cellulosic biorefinery in Salamanca, 
Spain, co-located with an existing starch-based ethanol facility.\50\ 
Production at this facility was halted in September of 2007 due to the 
lack of a biofuels mandate or sufficient incentives in Spain. Abengoa 
was forced to export its product to other countries in Europe at 
increased costs. However, with a law going into effect in 2009 
obligating the use of biofuels, production was able to resume in July 
of 2008. According to Abengoa, measures such as this resulting in a 
stable market are necessary to provide the financial resources to 
develop advanced renewable fuels.\51\ Abengoa also operates a number of 
biorefineries in the United States, including several pioneering the 
use of cellulosic feedstocks. Since the RFS excludes most woody biomass 
from the RFS, however, Abengoa may find itself in a similar situation 
to the one they faced in Salamanca and may decide to leave the country 
or export the fuel overseas. This export of fuels and products overseas 
should be seen as wasted opportunities. The value of these products 
would otherwise re-circulate within the domestic economy, providing 
local jobs and adding value to other local industries.
---------------------------------------------------------------------------
    \50\ Abengoa Bioenergy. ``Biocarburantes de Castilla y Leon 
Commences Production with Home Produced Raw Material.'' Abengoa 
Bioenergy. http://www.abengoabioenergy.com/sites/bioenergy/en/
acerca_de/sala_de_prensa/historico/2006/20060707_noticias.html 
(accessed August 14, 2008).
    \51\ Abengoa Bioenergy. ``Biocarburantes de Castilla y Leon 
informs.'' Abengoa Bioenergy.
http://www.abengoabioenergy.com/sites/bioenergy/en/acerca--de/
sala_de_prensa/historico/2008/20080716_noticias.html (accessed August 
14, 2008).
---------------------------------------------------------------------------
    Abengoa is also involved in a number of solar energy projects. 
Abengoa Solar Inc. currently has a proposal to build a 280 MW solar 
power plant in Arizona. However, with renewable energy tax credits set 
to expire at the end of this year, according to Abengoa, this facility 
will not be built in Arizona or anywhere in the United States. Kate 
Maracas, vice president of Abengoa's Arizona operations, has stated 
``Without the 30 percent investment tax credit, the numbers simply 
don't work. So we can't get project financing.'' \52\ On the same day 
this story was published, Abengoa announced that it had completed 
financing worth =280 million for the construction of four solar 
projects in Spain.\53\ Abengoa is looking to develop solar projects in 
other locations, including Algeria and Morocco.\54\ This is a different 
technology and a different incentive, but the principle is the same. If 
we are not willing or able to offer reliable, effective incentives for 
renewables, we will lose the technology, capital, and talent to those 
countries that do.
---------------------------------------------------------------------------
    \52\ Fischer, Howard. ``Solar-Power Plant Hinges on Congress.'' 
Arizona Business Gazette. http://www.azcentral.com/business/abg/
articles/2008/08/07/20080807abg-solar0807.html (accessed August 14, 
2008).
    \53\ Abengoa Solar, Inc. ``Abengoa Solar Completes Financing for 
New Solar Projects Worth More Than ?280 million.'' Abengoa Solar, Inc. 
http://www.abengoa.es/sites/abengoa/en/noticias_y_publicaciones/
noticias/historico/noticias/2008/08_agosto/20080807_noticias.html 
(accessed August 14, 2008).
    \54\ Grimm, Ryan. ``McCain Absence Could End Arizona Project.'' 
Politico. http://www.politico.com/news/stories/0708/12159.html 
(accessed August 14, 2008).
---------------------------------------------------------------------------
    In another example, SunPower Corporation, a U.S. supplier of solar 
cells and panels, has stated that they may have to move some business 
overseas if renewable energy tax credits are not extended. SunPower 
Chief Executive Officer Tom Werner in an interview stated, ``We control 
our own destiny, (and) we'll be able to enter other new markets 
rapidly, and we believe we can hold our guidance for 2008 and 2009, 
even if the ITC doesn't pass, by moving business elsewhere.'' SunPower 
expects to have its sales to the business market affected the most; 
however, there are plans to expand business overseas in countries like 
Italy, Greece, France, and Australia.\55\ On August 14, 2008, Pacific 
Gas & Electric signed an agreement with SunPower and Topaz Solar Farms 
LLC to supply a combined 800 MW of renewable energy. According to the 
press release, both projects are contingent on the renewal of the 
Federal energy tax credit.\56\
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    \55\ Daily, Matt. ``SunPower View Solid Despite Tax Credit.'' 
Reuters UK. http://uk.reuters.com/article/oilRpt/
idUKN0337143820080603?sp=true (accessed August 14, 2008).
    \56\ SunPower Corp. ``PG&E Signs Historic 800 NW Photovoltaic Solar 
Agreements with OptiSolar and SunPower.'' SunPower Corp. http://
investors.sunpowercorp.com/releasedetail.cfm?ReleaseID=328221 (accessed 
August 14, 2008).
---------------------------------------------------------------------------
    The global trade in wood pellets is another example of resources 
relocating to follow a needed incentive--this time the package of 
climate change laws and incentives in the E.U. According to a study 
published in the Forest Products Journal,\57\ the bulk of wood pellets 
produced in North America in 1997 were sold on the domestic market. In 
the decade since that study was published, the market situation has 
changed. While there is still local demand for wood pellets, there is a 
larger market evolving in Europe where climate change legislation has 
created incentives for power companies to boost their use of renewable 
resources. Europe already consumes nearly 8 million tons of wood 
pellets a year to run factories and power plants and heat entire 
neighborhoods, and that amount is still increasing. In response to this 
rising demand, a number of American and Canadian pellet producers have 
begun shifting their focus to export sales on the European markets. 
Corinth Wood Pellets LLC in Corinth, Maine recently began operation in 
central Maine. Another Maine company, Maine Wood Pellets Company, hopes 
to begin operating soon. Together, the two will be able to produce over 
1 million tons of wood pellets a year, a substantial portion of which 
are destined for the European market. Energex Pellet Fuel, Inc., 
another company focusing on export, currently bills itself as North 
America's largest pellet fuel maker, producing 200,000 tons a year from 
plants in Quebec and Pennsylvania. In the southern part of the country, 
both Dixie Pellets, LLC, located near Selma, Alabama and Appling County 
Pellets, LLC in Baxley, Georgia plan to begin exporting pellets to meet 
European demand. Green Circle Bio Energy in Jackson County, Florida, 
owned by a Swedish company, is building a plant with the capability of 
producing 560,000 tons a year, primarily for the European market. Green 
Circle Bio Energy calls it the largest wood pellet plant in the world. 
Our inexpensive wood resources are attractive to other nations beyond 
Europe, as well. In the past year, Green Energy Resources, Inc. 
announced a 5 yr., $144 million dollar contract to export rough wood 
chips to China for use in power production.
---------------------------------------------------------------------------
    \57\ Aruna, P.B., Larman, J.G., Araman, P., and F.W. Cubbage. 1997. 
An analysis of wood pellets for export: a case study of Sweden as an 
importer. Forest Products Journal 47(6): 49-52.
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    These are just a few examples--many more could be found within the 
renewable energy industry and other industries as well. There will 
always be a strong economic push for any company to locate where they 
have access to adequate and reliable incentives, encouraging policies, 
and minimal barriers to the production of particular products or the 
use of particular resources. From an economic competitiveness and a 
natural security perspective, it should be a national imperative to 
encourage the development of renewable technologies and implementation 
of renewable energy, including wood-based biofuels, right here on our 
own shores. If we miss out on these opportunities, future generations 
of Americans will be saddled with the choice between importing foreign 
fuels and licensing foreign technology. Either way, the United States 
risks becoming even more dependent on other countries for our most 
basic (and strategic) needs.
    From an environmental perspective, as well, we should strive to 
have our biofuel feedstocks produced on American soil, where we can 
regulate and oversee the production. We have in this country a wide 
variety of laws and regulations at the Federal, state, and local levels 
protecting against a great number of unsustainable practices and 
environmentally-damaging activities. Furthermore, we are blessed with a 
judicial system that is able and willing to enforce these laws. 
Comparatively, many countries have lower or non-existent environmental 
standards, and where these standards do exist, they are often ignored 
by the courts. Corrupt officials, insufficient resources, and 
recalcitrant cultures often render environmental regulations entirely 
ineffective.
    In a world of finite and dwindling fossil fuels, increasing global 
conflict over energy, and greater and greater concern over the dangers 
of global climate change, renewable energy is the future. For reasons 
of national security, economic competitiveness, and environmental 
sustainability, it is essential that we commit ourselves to developing 
renewable technologies here in America and providing the adequate and 
reliable incentives needed to make that happen. For that reason, the 
Congress should amend the renewable biomass definition to include the 
full range of renewable biomass resources that we have at our disposal.
                                 ______
                                 
 Response to Questions Submitted to Arthur ``Butch'' Blazer, Forester, 
    State of New Mexico; Executive Member, Council of Western State 
  Foresters; Executive Member, National Association of State Foresters
    Question 1. In recent years there has been an increase in the 
quantity, intensity and overall scope of forest fires, particularly in 
the western United States. What is the Forest Service doing now to 
remove excess fuels from public forests, and how could the Renewable 
Fuel Standard (RFS) facilitate this practice?
    Answer. We will start by discussing a significant hurdle before the 
agency which must be fixed. The Forest Service's ability to respond to 
the increasing number and intensity of large, catastrophic wildfires by 
removing excess fuels has been severely hampered by increasing fire 
suppression costs. The agency's first priority is to protect human life 
and property which often means fighting fires in the Wildland-Urban 
Interface. Fighting fires near homes and communities is expensive and 
is one of the lead contributing factors to the agency's escalating 
annual fire suppression costs. The Forest Service now spends over half 
its budget on fire suppression and is repeatedly forced to borrow from 
other internal accounts (e.g., S&PF) including those designed to 
proactively remove hazardous fuels from NFS and other public and 
private forestlands. Help is needed from Congress to fix this fire 
``borrowing'' situation, not only to repay borrowed funds but to secure 
a long term fix by passing the House Natural Resources Committee markup 
version of the FLAME Act (H.R. 5541).
    It is important to mention the need to address all at-risk lands in 
the discussion of excess fuels and forest health. The USFS and State 
Foresters have partnered on a competitive funding process for State & 
Private Forestry funds to ensure that the most at-risk areas or 
projects that will have the greatest impact will be funded. This is a 
key step in the right direction as many of the State & Private Forestry 
programs, such as State Fire Assistance, can reduce the costs of 
wildland fire suppression activities in the long run.
    Now let us turn our attention to activities of the USFS specific to 
public lands. The Forest Service has entered into various public-
private partnerships and utilized nontraditional contracting 
authorities (i.e., stewardship contracts) aimed at promoting landscape-
scale fuels reduction and forest health projects. In 2003, Congress 
granted the Forest Service (and BLM) full authority to enter into 
multiyear stewardship contracts on a ``best-value'' basis and allowed 
the agency to exchange ``goods'' for ``services'' (among other 
authorities).
    Success stories have emerged on the Lakeview Federal Stewardship 
Unit (i.e. Bull Stewardship Contract) and the Apache-Sitgreaves 
National Forest (i.e., White Mountain Stewardship Contract), yet few 
stewardship contracts have provided the long term wood supply needed to 
attract significant attention of investors interested in funding new 
wood-bioenergy or cellulosic ethanol facilities. Investors are most 
interested in multi-year (i.e., 10 or more years), landscape level 
stewardship contracts, but a number of obstacles (e.g., cancellation 
ceilings, threat of litigation, diverted fire suppression funds) remain 
which prevent wide-spread use of stewardship contracts--and other cross 
boundary authorities--on NFS lands and leave a significant number of 
acres threatened by devastating wildfire.
    The RFS in the Energy Independence and Security Act (EISA) 
established a national goal to reach 36 billion gallons of renewable 
fuels by 2022. To help meet this target, Congress has followed by 
providing policy incentives--such as the 2008 Farm Bill's $1.01/gallon 
credit towards the production of cellulosic ethanol--designed to help 
launch new markets for woody biomass which also hold enormous potential 
for driving down the cost of fuel reduction treatments on both public 
and private forestlands. Unfortunately, the current definition of 
renewable biomass in the RFS section of the EISA excludes fiber from 
Federal (and significant private) forestland and thwarts future 
investment in conversion technologies which currently are at (or near) 
operational or economical production.
    Changing the renewable biomass definition could dramatically 
increase market development particularly in western states where over 
40 percent of land is federally held and forest health and fuel 
reduction treatments are completed at a net cost to the Forest Service. 
As an example, after 3 years of gathering data on the White Mountain 
stewardship contract in Arizona, the results reveal that over 33% of 
the material harvested remain in the forest and requires the Forest 
Service to pile and burn. Regarded as forest residual, there is no 
current market for this material, which some estimates believe could 
account for as much as 45% of a landscape scale forest restoration or 
fuel reduction project. To reach our forest health and wildfire 
management goals, there must be a market for this wood.
    The exclusion is overly restrictive--particularly in light of the 
extensive network of Federal environmental laws (e.g., NEPA, NFMA) 
which prevent the conversion of native forests to dedicated woody 
biomass feedstocks--and provides little relief to cover the rising 
costs of forest health and fuel reduction treatments at a time when 
warming climates and limited budgets suggest it is needed most.

    Question 2. Do you think it is possible to achieve fire management 
objectives without removing biomass from Federal lands?
    Answer. No, in order for management objectives to be effective, 
activities must happen across the landscape, including Federal, state, 
private and tribal lands. Federal lands in particular are overly dense. 
Despite good intentions, for nearly a century Federal land managers 
held the philosophy of suppressing all wildfires. This has contributed 
to widespread conditions of unhealthy, overly-dense forests now at risk 
of high-severity, stand-replacing wildfires. Estimates suggest there 
are 90 million acres at risk of high-severity fire and devastating 
insect and disease outbreaks. The backlog of badly needed treatments 
has exposed over 50,000 communities to risks of losing life and 
property.\1\ One of the contributing factors to the increase in 
unhealthy forests is the changing climate. This trend is not expected 
to reverse and will continue to impact the ability for fire management 
objectives on the landscape.
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    \1\ National Association of State Foresters. 2007. Communities at 
Risk Report FY 2007. Last Accessed online at: http://
www.stateforesters.org/files/NASF-finalCAR-report-FY07.pdf. 
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    To determine whether it is possible to achieve fire management 
objectives without removing woody-biomass, The Council of Western State 
Foresters request you consider the following options:

   Do nothing approach. Some argue that allowing nature to 
        ``run its course'' might be the least costly alternative, while 
        others suggest hidden costs are buried in the price of fighting 
        fires and the loss of ecosystem services. Consider, for 
        instance, the $238 million price tag tied to the 138,000 acre 
        Hayman Fire which occurred in 2002 and consumed 144 homes and 
        466 outbuildings. These costs do not include the subsequent $8 
        million needed to remove fire-related debris from critical 
        reservoirs which supply Denver residents with clean drinking 
        water.\2\ If left to chance, forests will eventually burn--in 
        some cases--with devastating impacts on their ability to 
        provide for a number of important public values.
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    \2\ LeMaster, D.C. et al. 2007. Protecting Front Range Watersheds 
from High-Severity Wildfires. Last accessed on August 19, 2008 at: 
http://www.pinchot.org/current_projects/sustainable/watersheds.

   Prescribed Burn. Reducing hazardous fuels using prescribed 
        burns may work in certain situations, but high fuel loads, air 
        quality restrictions, short windows of appropriate weather and 
        risk of escape into the Wildland-Urban Interface often 
        constrain managers' ability to effectively utilize this option 
        across the landscape.\3\ It has its' place, but it is not a 
        panacea alone. Costs tied to prescribed burning can quickly 
        escalate particularly in the West where fire-line construction 
        in mountainous terrain is expensive. Other costs include mop up 
        requirements, potential damage from escape, smoke management, 
        and safety.\4\
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    \3\ Barrett, T.M., Jones, J.G., and Wakimoto, R.H. 2000. USDA 
Forest Service use of spatial information in planning prescribed fires. 
Western Journal of Applied Forestry. 15: 200-207.
    \4\ Cleaves & Brodie. 1990. Economic Analysis of prescribed 
burning, In Natural & Prescribed Fire in Pacific Northwest Forest, J.D. 
Walstad, et al (eds.) Oregon State University Press, Corvallis.

   Mechanical Treatments. Mechanical treatments designed to 
        remove residues or small diameter trees are often completed at 
        a net-cost to the Forest Service, yet are a small price to pay 
        when compared to fighting uncontrolled wildfire. These costs 
        vary widely and are affected by numerous factors including site 
        conditions, treatment requirements, labor rates, machines 
        costs, fuel costs and other considerations.\5\ Where markets 
        exist for previously unmerchantable, small-diameter material, 
        mechanical treatments have the potential to reduce or possibly 
        eliminate treatment costs. Therefore, it is extremely important 
        that we consider appropriately scaled expansion wood-based 
        markets.
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    \5\ Rummer, B. 2008. Assessing the cost of fuel reduction 
treatments: A critical review. Last accessed on August 19, 2008 at 
http://www.srs.fs.usda.gov/pubs/ja/ja_rummer017.pdf.

    Litigation (or the threat thereof) of mechanical treatments, lack 
of industry capable of utilizing woody-biomass, dwindling budgets being 
diverted to fire suppression, and numerous other factors prevent 
Federal land managers from actively achieving fire and forest 
management objectives that will reduce risks to communities. 
Recognizing biomass from Federal lands in any RFS is a significant 
first step in creating the markets needed to drive down treatment costs 
and help the Forest Service and other Federal and state land management 
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agencies address the significant backlog in fuels reduction activities.

    Question 3. What are the current barriers to achieving your 
management goals in your state? How important is a market, such as the 
one that could be created by the RFS, in achieving these goals?
    Answer. The states manage their forests within a network of various 
other public and private forests. Each type of ownership is confronted 
with its own specific management challenges, but collectively they are 
tasked with providing a number of essential public services including 
carbon sequestration, renewable energy, timber, clean air and abundant 
water, and wildlife habitat amongst others. The states face very 
similar issues as their Federal agency counterparts including limited 
available budgets to address forest health threats such as 
uncharacteristically large wildfires and insect and disease outbreaks. 
In addition, states are charged with helping their neighboring private 
forest landowners who face on-going pressures to convert their land to 
non-forest uses.
    The RFS can help address many of the barriers which stand in the 
way of states' ability to meet their forest management objectives. 
First, it can help generate critical markets for woody biomass and 
provide new income sources for families and individuals helping them 
cover their costs in owning, maintaining and protecting their forest 
from wildfire. Keeping forestlands forested is a primary driver for our 
policy positions. Second, new markets are accompanied by new industry 
and an opportunity for communities to provide family-wage jobs and 
diversify their economies. Third, it provides new opportunities for 
land managers to treat more ``at-risk'' acres at a time when limited 
budgets restrict their ability to proactively address forest health 
concerns.
    New opportunities for both public and private forestlands are 
emerging through the use of wood-bioenergy or cellulosic ethanol, but a 
number of barriers need to be addressed before they are fully realized 
including:

   Limited Markets. In the West, markets have been slow to 
        develop as supply from Federal lands has been limited. Demand 
        has been curtailed as renewable energy investors and lenders 
        hesitate to put forward the significant capital required for a 
        new wood-bioenergy or cellulosic ethanol facility without some 
        assurance of a stable, multi-year supply. Further, high 
        transportation costs limit the economic feasibility of any new 
        investments in woody-biomass facilities. Without these markets 
        and related infrastructure, states are forced to cover the full 
        cost of removing small-diameter materials which threaten 
        forests and surrounding communities.

   Limited technical and financial assistance. Rural 
        communities are in need of programs which can help overcome a 
        lack of resources needed to attract new forest-based businesses 
        and diversify their local economies. In particular, technical 
        and financial assistance programs that are tailored to woody-
        biomass utilization would be helpful.

   Cheaper energy alternatives. Competing renewable and non-
        renewable energy sources are oftentimes less expensive and can 
        hold a competitive advantage over woody-biomass utilization. 
        But woody biomass should not be written off. Rather, attention 
        should be placed on the thermal advantages of woody bioenergy 
        options and the baseload advantages and dispersed nature of the 
        energy source to help ensure a stable, consistent and widely 
        applied renewable energy. To this end, we strongly encourage 
        the Committee to look at renewing and extending the Production 
        Tax Credit (PTC) for biomass energy sources for as long as 
        possible. We also encourage the PTC being adjusted so all the 
        renewable energy sources are treated equitably under the PTC. 
        As it currently stands, each renewable garners different 
        credits. Consistency in this policy will foster private sector 
        investment.

    In sum, an RFS is extremely important in helping states (and other 
landowners) in achieving their forest management objectives. These 
opportunities will not be fully realized across all the nation's 
forests--but particularly in the West--until the woody-biomass 
definition in the RFS is changed to recognize woody biomass from 
Federal sources.
                                 ______
                                 
Response to Questions Submitted to Kenneth G. Cassman, Ph.D., Director, 
Nebraska Center for Energy Sciences Research; Professor, Department of 
       Agronomy and Horticulture, University of Nebraska-Lincoln
Questions from Hon. Stephanie Herseth Sandlin, a Representative in 
        Congress From South Dakota
    Question 1. What is your opinion of the general concept of indirect 
land use change and how would you characterize the current level of 
scientific understanding of this issue?
    Answer. The current level of scientific understanding of indirect 
land use change (ILUC) caused by expansion of biofuel production 
capacity is very poor (more detail provided in the answer to Question 3 
below).
    The general principle behind the concept of ILUC is that anything 
which results in higher prices for major staple food crops encourages 
farmers worldwide to expand production of those crops so they can 
profit from the high prices. Expansion of production capacity can occur 
in two ways--either by increasing yields on existing farm land, or by 
increasing the amount of land in production. When new land is cleared 
for crop production, there is a release of substantial amounts of 
greenhouse gases to the atmosphere because natural ecosystems such as 
forests, wetlands, and grasslands contain large amounts of stored 
carbon in their biomass and soil.
     The ILUC concept runs into serious problems when extended 
consistently to other issues. This is because anything that reduces the 
yield or total output of food crops on existing farm land would incur a 
GHG emissions ``debt'' due to ILUC. For example, organic grain 
producers would have an ILUC ``debt'' if they used crop rotations with 
forage legumes and cover crops to maintain soil fertility without 
commercial fertilizers because food output would be less than from 
conventional cropping systems that produce grain crops every year. 
Likewise, a corn-soybean rotation may incur an ILUC debt compared to 
continuous corn if the total amount of food, feed, and biofuel 
feedstock is greater in continuous corn and contributes to lower 
commodity prices. Conversely, anything that increases crop yields on 
existing farm land would be eligible for a GHG offset because it helps 
avoid ILUC. The bottom line is that the concept of indirect land use 
change is not useful for application to production agriculture when 
applied broadly to a wide range of farming systems because it would 
have negative effects on diversity, stability, environmental quality, 
and profitability of U.S. agriculture.

    Question 2. How much confidence do you have in our current 
abilities to accurately estimate the greenhouse gas impacts of indirect 
land use change?
    Answer. Numerous research papers have been published on the factors 
that influence land use change (LUC). Consistently these papers 
identify a large number of factors that affect it, and they note these 
factors interact in complex ways. Use of a model that only evaluates 
the impact of increased biofuel production capacity avoids the need to 
deal with this complexity, and predictions from such a model are not 
realistic. It is worthwhile to note that the Roundtable on Sustainable 
Biofuels (http://cgse.epfl.ch/page65660.html), which represents a wide 
range of international researchers, government officials, industry, and 
environmental advocacy organizations, has concluded there are no 
broadly accepted methods for estimating ILUC.

    Question 3. Can you elaborate on the difficulties of accurately 
quantifying indirect land use change and assigning the greenhouse gas 
emissions that result from these changes?
    Answer. There are many factors, in addition to biofuels, that 
influence land use change (LUC). These include currency exchange rates, 
land use policies in major crop producing countries worldwide, economic 
growth rates in developing countries and the impact on human diets, the 
rate of growth in crop yields on existing farm land, and so forth. It 
is very difficult to predict each of these factors and their 
interactions with current knowledge and models. Therefore, any model 
estimate of future ILUC due solely to biofuels is confounded by the 
underpinning assumptions about the other factors listed above as 
simulated in the model, regardless of whether these assumptions are 
explicit or implicit. The bottom line is that any estimates of ILUC are 
highly uncertain and therefore do not provide a reasonable foundation 
for policy development.

    Question 4. Is there any empirical proof to date that biofuel 
expansion has caused significant land use change? Aren't farmers 
cultivating considerably fewer acres today than they did 20-30 years 
ago?
    Answer. There is no empirical evidence that, to date, the expansion 
of biofuel production has caused land use change. However, this 
statement is backward looking in that it is based on the recent past 
and current situation. The key issue going forward is whether there 
will be significant direct and indirect LUC due to continued expansion 
of biofuel production capacity in the U.S. and other countries. The 
answer to this question depends on how much biofuel production capacity 
is established. For example, if corn ethanol production rises to 15 
billion gallons per year, it will be difficult to meet demand for 
producing this biofuel as well as for livestock feed, sweeteners, and 
bio-based industrial products without a large expansion of crop area, 
both here in the U.S. and elsewhere, unless there is an acceleration in 
the rate of yield increase on existing farm land (see answer to 
Question 6 below).

    Question 5. According to your modeling efforts at the University of 
Nebraska, corn ethanol can reduce greenhouse gas emissions by 50% or 
more compared to gasoline. How and why are your results different than 
those from scientists that suggest corn ethanol does not reduce 
greenhouse gas emissions?
    Answer. The most widely used models for estimating the lifecycle 
greenhouse gas (GHG) emissions from corn grain ethanol (hereafter 
called corn ethanol) are the GREET (http://www.eurekalert.org/
pub_releases/2008-05/dnl-ngm050808.php), EBAMM (Science 2006, Vol. 
311:506-508), and BESS models (www.bess.unl.edu). Of these, GREET and 
EBAMM use older data for corn yields and input levels, energy 
requirements of the ethanol plant, and the way in which co-products are 
used and credited. In contrast, the BESS model uses the most currently 
available data for these lifecycle components, which better reflects 
the actual performance of the ethanol industry today.
    I therefore believe the BESS model provides the most accurate 
representation of the corn ethanol industry as it currently functions 
with regard to land requirements and GHG emissions. As such, I would 
also argue that this more up-to-date GHG performance should be used by 
EPA in developing its GHG emissions thresholds for corn ethanol, and 
also by states that are implementing low carbon fuel standards.
Question from Hon. Tim Holden, a Representative in Congress From 
        Pennsylvania
    Question. You mention more work needs to be done on production 
scale in order to get the best science on feedstocks, but that would be 
quite a financial undertaking. Is industry poised to contribute and 
help finance research facilities?
    Answer. There are two key issues that must be addressed to provide 
unequivocal scientific evidence that existing corn-ethanol and second 
generation cellulosic biofuels are environmentally sustainable and 
contribute to a reduction in GHG emissions compared to gasoline, the 
latter now mandated in the 2007 EISA.
    The first issue concerns the food versus fuel competition, and the 
need to avoid a substantial increase in food costs due to use of corn 
or dedicated non-food cellulosic crops for biofuel production. In the 
case of corn, current yields and rates of yield increase in are not 
sufficient to meet expected demand for food, feed, and biofuels if 
annual U.S. corn ethanol production reaches 15 billion gallons by 2015. 
Without a substantial acceleration in corn yields on existing land, 
corn prices will rise to levels that threaten the economic viability of 
both the corn ethanol and livestock industries.
    But it is not just a matter of more rapidly increasing yields 
because we must achieve such acceleration while also protecting water 
and soil quality and while reducing GHG emissions from corn production. 
Thus, the second issue is how to achieve this ``ecological 
intensification'' process. In fact, we have never been successful at 
both raising yields quickly and reducing the environmental impact of 
agriculture, and it is a major scientific challenge for which there are 
no silver bullets. Instead, as our work in Nebraska has shown, it can 
be done through an integrated, interdisciplinary research effort that 
has an explicit focus on both accelerating yield gains and improving 
the environmental performance of corn production systems. Note also 
that accelerating yield gains on existing farm land will also reduce, 
and even eliminate concerns about ILUC.
    In the case of dedicated cellulosic biofuel crops like switchgrass, 
there is a critical need to conduct similar research to identify how to 
maximize yields on marginal land so as to avoid use of land that can 
produce food crops while also protecting soil and water quality. 
Although there has been some promising research at a relatively small 
scale that suggests it is possible to achieve both goals, it is not 
possible to scale up to a commercially viable system. And this scaling 
constraint is also true for similar research on corn ethanol.
    Therefore, for corn ethanol, switchgrass, or any other promising 
biofuel system it is critical to conduct research in production-scale 
fields to determine if it is possible to produce adequate amounts of 
these feedstock crops while also protecting the environment, and 
reducing GHG emissions relative to gasoline based on lifecycle 
analysis. Monitoring changes in soil carbon sequestration is a critical 
component of this work, as is model development to extend and 
extrapolate the results to all environments in which the biofuel crop 
may be grown.
    I have described the type of research that is needed in my original 
written testimony. Unfortunately, such research is not low cost because 
it requires sophisticated instrumentation and scientists from a wide 
range of plant, soil, and environmental sciences. I estimate it would 
require a concerted effort for the next 5-10 years involving about $150 
million per year. While this is clearly a lot of money, it represents 
only a small fraction of the total amount of Federal funding allocated 
to research and development of second generation biofuels. It is 
``public goods'' research in the sense that its primary goal is to 
ensure the long-term environmental and economic sustainability of the 
emerging biofuel industry rather than to develop intellectual property 
or products for short term profit in the private sector. Therefore, it 
is not likely the private sector will volunteer to fund this work. One 
option is for a national research fund derived from a half-cent check-
off on the sale of each gallon of biofuel. Such a fund would provide $5 
million dollars per year for every billion gallons of biofuel 
production, and could be matched by Federal funding from the DOE, USDA, 
and EPA to ensure adequate funds to perform the required research.

                                  
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