[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                 ON-FARM ENERGY PRODUCTION: IMPACTS ON 
                   FARM INCOME AND RURAL COMMUNITIES

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

                                HEARING

                               BEFORE THE

        SUBCOMMITTEE ON COMMODITY EXCHANGES, ENERGY, AND CREDIT

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 23, 2020

                               __________

                           Serial No. 116-35
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


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

                              __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
42-614 PDF                  WASHINGTON : 2020                     
          
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                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

DAVID SCOTT, Georgia                 K. MICHAEL CONAWAY, Texas, Ranking 
JIM COSTA, California                Minority Member
MARCIA L. FUDGE, Ohio                GLENN THOMPSON, Pennsylvania
JAMES P. McGOVERN, Massachusetts     AUSTIN SCOTT, Georgia
FILEMON VELA, Texas                  ERIC A. ``RICK'' CRAWFORD, 
STACEY E. PLASKETT, Virgin Islands   Arkansas
ALMA S. ADAMS, North Carolina        SCOTT DesJARLAIS, Tennessee
    Vice Chair                       VICKY HARTZLER, Missouri
ABIGAIL DAVIS SPANBERGER, Virginia   DOUG LaMALFA, California
JAHANA HAYES, Connecticut            RODNEY DAVIS, Illinois
ANTONIO DELGADO, New York            TED S. YOHO, Florida
TJ COX, California                   RICK W. ALLEN, Georgia
ANGIE CRAIG, Minnesota               MIKE BOST, Illinois
ANTHONY BRINDISI, New York           DAVID ROUZER, North Carolina
JOSH HARDER, California              RALPH LEE ABRAHAM, Louisiana
KIM SCHRIER, Washington              TRENT KELLY, Mississippi
CHELLIE PINGREE, Maine               ROGER W. MARSHALL, Kansas
CHERI BUSTOS, Illinois               DON BACON, Nebraska
SEAN PATRICK MALONEY, New York       NEAL P. DUNN, Florida
SALUD O. CARBAJAL, California        DUSTY JOHNSON, South Dakota
AL LAWSON, Jr., Florida              JAMES R. BAIRD, Indiana
TOM O'HALLERAN, Arizona              JIM HAGEDORN, Minnesota
JIMMY PANETTA, California            CHRIS JACOBS, New York
ANN KIRKPATRICK, Arizona
CYNTHIA AXNE, Iowa
XOCHITL TORRES SMALL, New Mexico

                                 ______

                      Anne Simmons, Staff Director

              Matthew S. Schertz, Minority Staff Director

                                 ______

        Subcommittee on Commodity Exchanges, Energy, and Credit

                     DAVID SCOTT, Georgia, Chairman

FILEMON VELA, Texas                  AUSTIN SCOTT, Georgia, Ranking 
STACEY E. PLASKETT, Virgin Islands   Minority Member
ABIGAIL DAVIS SPANBERGER, Virginia   ERIC A. ``RICK'' CRAWFORD, 
ANTONIO DELGADO, New York            Arkansas
ANGIE CRAIG, Minnesota               MIKE BOST, Illinois
SEAN PATRICK MALONEY, New York       DAVID ROUZER, North Carolina
ANN KIRKPATRICK, Arizona             ROGER W. MARSHALL, Kansas
CYNTHIA AXNE, Iowa                   NEAL P. DUNN, Florida
----                                 DUSTY JOHNSON, South Dakota
                                     JAMES R. BAIRD, Indiana

               Ashley Smith, Subcommittee Staff Director

                                  (ii)
                             
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Brindisi, Hon. Anthony, a Representative in Congress from New 
  York; submitted statement on behalf of Dairy Farmers of America    64
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     6
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     5
Scott, Hon. Austin, a Representative in Congress from Georgia, 
  opening statement..............................................     3
    Submitted article............................................    63
Scott, Hon. David, a Representative in Congress from Georgia, 
  opening statement..............................................     1
    Prepared statement...........................................     3

                               Witnesses

Falk, Jim, President, Falk's Seed Farm, Inc.; Co-Owner, Falk 
  Farm, Murdock, MN; on behalf of Minnesota Farmers Union, 
  National Farmers Union.........................................     8
    Prepared statement...........................................     9
    Submitted questions..........................................    65
Sievers, Hon. Bryan J., Owner, Sievers Family Farms; Chief 
  Operating Officer, AgriReNew; Vice Chair, Board of Directors, 
  America Biogas Council, Stockton, IA...........................    11
    Prepared statement...........................................    13
    Submitted questions..........................................    67
Harris, Will, Owner, White Oak Pastures, Bluffton, GA............    22
    Prepared statement...........................................    24
McCloskey, D.V.M., Michael J., Founder and Chairman, Fair Oaks 
  Farms; Owner/Partner, Prairies Edge Dairy Farm; Chair, 
  Environmental Issues Committee, National Milk Producers 
  Federation, Fair Oaks, IN......................................    43
    Prepared statement...........................................    45

 
ON-FARM ENERGY PRODUCTION: IMPACTS ON FARM INCOME AND RURAL COMMUNITIES

                              ----------                              


                        THURSDAY, JULY 23, 2020

                  House of Representatives,
   Subcommittee on Commodity Exchanges, Energy, and Credit,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. David 
Scott of Georgia [Chairman of the Subcommittee] presiding.
    Members present: Representatives David Scott of Georgia, 
Spanberger, Delgado, Craig, Axne, Peterson (ex officio), Austin 
Scott of Georgia, Crawford, Rouzer, Johnson, Baird, Hartzler, 
and Conaway (ex officio).
    Staff present: Lyron Blum-Evitts, Patrick Delaney, Ross 
Hettervig, Isabel Rosa, Anne Simmons, Ashley Smith, Anna 
Brightwell, Josh Maxwell, Ricki Schroeder, Patricia Straughn, 
John Konya, Dana Sandman, and Justina Graff.

  OPENING STATEMENT OF HON. DAVID SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    The Chairman. This hearing will come to order. Today, what 
I would like to do is to open this hearing up with a word of 
prayer, and I would like to ask if my good friend, brother, and 
cousin, Austin Scott, would lead us in a moment.
    Mr. Austin Scott of Georgia. I would be honored to.
    The Chairman. Okay.
    Mr. Austin Scott of Georgia. Let us pray.
    Lord, we love you and we know you love us. You have given 
us so many things to be thankful for, Lord, and as we reflect 
upon the life of our dear friend and brother, John Lewis, we 
want to thank You for allowing us to experience him and for the 
walk that he walked, and the faith that he had in You to, Lord, 
let people attack him and to change them in his peaceful manner 
by never attacking back. And Lord, we know that we just have so 
much to be thankful for in this country and this world. We 
would ask that You would bless the leadership, and that You 
would put Your hand on us, Lord, and that You would help guide 
us in a direction that let us lead this country and this world, 
and in a direction that will be pleasing to You. Lord, I make 
this prayer in the name of Your Holy Son, Jesus Christ. Amen.
    The Chairman. Thank you, Austin. I appreciate that. 
Excellent prayer to get us started off right.
    This hearing of the Subcommittee on Commodity Exchanges, 
Energy, and Credit entitled, On-Farm Energy Production: Impacts 
on Farm Income and Rural Communities, will come to order. And 
welcome and thank you for joining us at this hearing today.
    After brief opening remarks, the hearing will be open to 
questions. Members will be recognized in order of seniority, 
alternating between Majority and Minority Members. For those 
participating remotely today, when you are recognized, you will 
be asked to unmute your microphone and you will have 5 minutes 
to ask your questions, or make a comment. And in order to get 
as many questions in as possible, the timer will stay 
consistently visible on the screen, and when 1 minute is left, 
the light will turn yellow signaling time is close to expiring.
    Let me begin with my opening remarks, and I want to say 
good morning to everyone who is here in the committee room, 
those of you who are out, and other means of communicating in 
this, our very first hybrid hearing of the Subcommittee on 
Commodity Exchanges, Energy, and Credit.
    We are going to talk today about an exciting and very, very 
important subject, especially in context of what is going on in 
our country today.
    As the economy continues to struggle the effects of the 
coronavirus pandemic, Americans in towns both large and small 
are keeping an eye on not only their own health, but also on 
their financial bottom line. For all Americans, that includes 
thinking about the cost of energy that powers our homes, our 
cars. But for that American farmer, that also includes thinking 
about additional ways that our farmers can boost their incomes 
as the farm economy continues to lag. There could be no more 
important issue than the one we are going to deal with today. 
We can do without a lot of things, but we cannot do without 
food and without water.
    Today's topic touches on both of those things, because we 
are talking about on-farm energy. Energy is a particular 
concern for farmers, and for ranchers, as approximately 15 
percent of production costs for U.S. farms is tied up in energy 
costs. By comparison, the average American household spends a 
little over two percent of its budget on electricity and the 
same amount for gas. The better a farm operation is able to 
manage its energy costs, the better it can weather the tough 
times like what we are seeing clearly today.
    I am excited to have four innovative farmers here with us 
today. Our witnesses are going to talk about the pioneering 
work underway on their own farms to explore ways of reducing 
their energy use, develop alternative sources of energy, and 
grow more diverse income streams. This is a discussion that I 
know will benefit every farmer and rancher who is watching.
    And our discussion of how these folks are going to work on 
homegrown energy sources on the farm is one that I hope will 
help move our climate discussion forward as well, highlighting 
especially the capacity of agriculture as a source of clean, 
domestic, renewable energy.
    Today we will look at the programs in the 2018 Farm Bill 
that help to encourage investment and exploration in the field 
of on-farm energy creation, storage, and use. These programs in 
the energy and conservation titles range from ones that help 
producers transition to cleaner and more efficient energy 
systems and ones on the cutting edge of new biobased energy 
feedstocks. We will also look at other ways farmers are helping 
to move the renewable energy forward by exploring solutions 
like our wind, our solar, within their operations as well.
    [The prepared statement of Mr. David Scott follows:]

 Prepared Statement of Hon. David Scott, a Representative in Congress 
                              from Georgia
    Good morning, and thank you for joining us at the first hybrid 
hearing of the Subcommittee on Commodity Exchanges, Energy, and Credit. 
We're going to talk today about an important subject, especially in the 
context of what's going on in our country today. As the economy 
continues to struggle with the effects of the coronavirus pandemic, 
Americans in towns large and small are keeping an eye not only on their 
health, but also on their financial bottom line. For all Americans that 
includes thinking about the cost of the energy that powers their homes 
and cars. For American farmers, that also includes thinking about 
additional ways they can boost their incomes as the farm economy 
continues to lag.
    Today's topic touches on both of those things, because we're 
talking about on-farm energy. Energy is a particular concern for 
farmers and ranchers, as approximately 15 percent of production costs 
for U.S. farms is tied up in energy costs. By comparison, the average 
American household spends a little over two percent of its budget on 
electricity and the same amount for gas. The better a farm operation is 
able to manage its energy costs, the better it can weather the tough 
times that we're seeing so clearly today.
    I am excited to have four innovative farmers here with us today. 
Our witnesses are going to talk about the exciting work underway on 
their own farms to explore ways of reducing their energy use, develop 
alternative sources of energy, and grow more diverse income streams. 
This is a discussion that I know will benefit every farmer and rancher 
watching.
    And our discussion of how these folks are working on homegrown 
energy sources on the farm is one that I hope will help move our 
climate discussion forward as well, highlighting especially the 
capacity of agriculture as a source of clean, domestic, renewable 
energy.
    Today we'll look at programs in the 2018 Farm Bill that help to 
encourage investment and exploration in the field of on-farm energy 
creation, storage, and use. These programs--in the energy and 
conservation titles--range from ones that help producers transition to 
cleaner and more efficient energy systems and ones on the cutting edge 
of new biobased energy feedstocks. We'll also look at other ways 
farmers are helping to move the renewable energy forward by exploring 
solutions like wind and solar within their operations as well.
    With that, I will recognize my Ranking Member, Mr. Scott of 
Georgia, for any opening comments he'd like to make.

    The Chairman. In consultation with the Ranking Member and 
pursuant to Rule XI(e), I wanted to make Members of the 
Subcommittee aware that other Members of the full Committee may 
join us today.
    Now, I recognize Ranking Member Austin Scott for his 
opening statement.

  OPENING STATEMENT OF HON. AUSTIN SCOTT, A REPRESENTATIVE IN 
                     CONGRESS FROM GEORGIA

    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and 
thank you for calling today's hearing to review on-farm energy 
production. I believe this hearing is very timely, given the 
current discussions taking place on the future of U.S. energy 
policy, and the future of U.S. agriculture.
    Recently, the Majority staff, about 3 weeks ago, of the 
Select Committee on Climate Crisis released a report, a very 
large report as I just held up,* recommending Congressional 
action needed to meet a goal of reaching net zero greenhouse 
gas emissions economy-wide no later than 2050. And while I 
think that a lot of the recommendations focus too much on 
reducing America's dependence on fossil fuels and not enough on 
emissions, in other words, if we could move from diesel to 
natural gas, that certainly is a benefit to the environment, 
that the focus on emissions would be more productive than the 
focus on simply eliminating fossil fuels.
---------------------------------------------------------------------------
    * Editor's note: the report referred to is retained in Committee 
file, and it is available at: https://climatecrisis.house.gov/sites/
climatecrisis.house.gov/files/Climate%20Crisis%20Action
%20Plan.pdf.
---------------------------------------------------------------------------
    But specifically, this report outlines principles for 
Federal carbon price, which is a direct tax on businesses and 
consumers. I want to make this clear. I believe that we can and 
we should do a better job of taking care of the environment. 
And in taking care of the environment, we have to acknowledge 
that the habitat is important to the wildlife of this country.
    I am prepared to work in a bipartisan manner to improve 
upon current programs and find new solutions, but I cannot 
support an extreme climate agenda that fails to consider rural 
Americans who have to shoulder the burden of the majority of 
the staff proposals that have come out in this report. Many of 
these proposals are aimed at the basic underpinning of our 
farming, manufacturing, energy, and transportation systems, and 
require changes of marginal or unknown benefit that would have 
significant implications for the profitability of U.S. 
agriculture and the U.S. economy. The report recognizes these 
glaring consequences and makes several recommendations for 
funding economic transition payments. In other words, the 
report's authors know and acknowledge that there are harmful 
consequences to their proposals, and rather than develop 
better, more thoughtful proposals in a bipartisan nature, they 
continue to recommend Federal overreach and dismantling of 
strong business and agricultural communities.
    Many of the agricultural recommendations do highlight the 
benefits farm bill programs play in assisting farmers, 
ranchers, and foresters in being the best stewards of the land. 
However, some of the recommendations also uncover what seems to 
be a hidden agenda: increased compliance and government control 
of our producers' land and livelihood. This is in direct 
conflict with the bipartisan principles that on-farm 
stewardship should be locally-led, voluntary, and incentive-
based. The 2018 Farm Bill has voluntary farm programs that help 
farmers implement new practices that sequester carbon, reduce 
emissions, and adopt more energy efficient farming practices.
    One of these programs proven to be effective is the 
Environmental Quality Incentives Program. The Natural Resources 
Conservation Service, or the NRCS, has adopted anaerobic 
digesters as a conservation practice, and provides cost-share 
assistance to producers. This allows farmers and ranchers to 
voluntarily implement this innovative on-farm energy production 
practice by receiving financial and technical assistance 
through EQIP.
    Another important program in the farm bill is the Rural 
Energy for America Program, which promotes energy efficiency 
and renewable energy development through grants and guaranteed 
loans. Grants may be used to finance energy audits for 
renewable energy technical assistance and site assessment, 
while the guaranteed loans may be used for construction of 
renewable energy systems, like anaerobic digesters, wind 
turbines, or solar panels.
    As mentioned before, making these improvements on the farm 
can produce a variety of benefits for farmers and ranchers. For 
example, using an anaerobic digester turns waste into energy, 
which can then be used for several purposes, including 
generating electricity to help run the farm, processing it 
further into high quality fuels, or even sold to the local 
power grid. These improvements will allow farmers and ranchers 
to reduce input costs needed to operate their farm and can even 
help increase income.
    While it is easy to talk about the benefits of on-farm 
energy production for farmers and ranchers, I would be remiss 
if I did not mention barriers to entry. There are generally 
extremely high costs to build the infrastructure needed for on-
farm energy production. While the farm bill programs help cover 
some of the costs involved, many farmers and ranchers do not 
have the ability to take on these additional up-front costs 
today to make farm improvements due the current state of the 
farm economy.
    Mr. Chairman, we have a great panel of witnesses that I 
look forward to hearing from. They have extensive knowledge of 
on-farm energy production. I want to thank them for joining us 
today. I am looking forward to a productive discussion on what 
we can do to improve access to these programs, and let me once 
again say, I think that we can and should do a better job of 
taking care of the environment.
    With that said, Mr. Chairman, I am committed to working 
with you to find the path forward.
    The Chairman. Thank you, Ranking Member Scott.
    All Members are reminded that face coverings are required 
for attendance at meetings longer than 15 minutes in committee 
hearing rooms. This is in accordance with Section 3.2.1 of the 
Attending Physician's Guidelines.
    Now I would like to recognize Chairman Peterson for any 
opening comments he would like to make.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mr. Peterson. Thank you very much, Mr. Chairman, and thank 
you for your leadership on this issue. This is something that I 
have worked on, been involved in for a long time.
    There is no question that we can produce energy on the 
farm. We have been able to in a number of different ways do 
that over the years. The problem has been to be able to make 
the economics work long-term. And to some extent, this is 
scale. To some extent, it is technology. To some extent, it is 
a problem with what happens with other energy sources. When oil 
collapses, then that changes the equation in terms of how the 
rest of this stuff works.
    I am all in favor of doing whatever we can to exploit this 
and to be able to do as much as possible on the farm with 
renewable energy. I have told a lot of people this over the 
years, it has to be able to be, at some point, stand on its 
own. I am okay with helping it get started and okay with having 
some ability to get it going. But there has to be a light at 
the end of the tunnel. It can't be something that the 
government is going to subsidize forever. And we have some of 
that going on in some of these areas. Like I say, I am for all 
energy whatever it is. Whether it is oil, gas, ethanol, 
whatever it is, as long as it makes economic sense. It works 
and that it is viable for the long-term.
    And so, I hope that as we provide support that we do it in 
a way that we are supporting things that have the ability to be 
viable in the long-term. And that has been a challenge, with 
some of the stuff that has happened, and I just think we need 
to keep that focus on it.
    Mr. Chairman, I appreciate your leadership in calling this 
hearing today. I look forward to hearing what the witnesses 
have to say. I have other hearings going on, so I may not be 
here the whole time, but again, thank you for what you are 
doing, and I yield back.
    The Chairman. Thank you, Chairman Peterson. I appreciate 
your comments.
    And now, I would like to recognize our distinguished 
Ranking Member, Congressman Mike Conaway, for any opening 
comments he would like to make.

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE 
                     IN CONGRESS FROM TEXAS

    Mr. Conaway. Thank you, Mr. Chairman. I, too, appreciate 
you having this hearing. I also appreciate you starting with a 
prayer. I think we deliberate better when we start that way, so 
thank you for doing that.
    I agree with most everything that has been said. The real 
question for me, though, is who pays for it? The Chairman 
mentioned the government pays for it. It is really the 
taxpayers that ultimately fund all of those programs that we 
put in place, and whether it is a tax subsidy that goes out 
directly, or whether it is some sort of transfer payment 
between the folks that are in the system, all of those things, 
at the end of the day, the Chairman is exactly right. Can we 
afford it? Does it make sense?
    I noticed recently when the price of oil collapsed in 
March, some of the anti-oil folks were gleeful about that. The 
truth of the matter is, they really should want really high oil 
prices, really high gasoline prices because it makes all of 
these other alternatives competitive against the current 
system. Whatever that utopia looks like out there that doesn't 
use fossil fuels--and maybe that is centuries from now we will 
get there. But in the meantime, we have to afford it. We have 
to be able to live. We have to be able to sustain it, keep our 
families alive, and those kinds of things. As we go up about 
these projects, figuring out who pays for it, where that cost 
gets ultimately settled is really a key to making this thing 
work.
    So again, Mr. Chairman, thank you for having this hearing. 
I appreciate our witnesses being here, and I yield back.
    The Chairman. Thank you very much, Ranking Member Conaway.
    The chair would request that other Members submit their 
opening statements for the record so the witnesses may begin 
their testimony, and to ensure that we have ample time for 
questions.
    I would like to welcome all of our distinguished witnesses. 
Thank you for being here on this, our very first hybrid 
Committee hearing.
    Our witnesses today, first, Mr. Jim Falk, who is President 
of Falk Seed Farm, Incorporated, co-owner of Falk Farm, on 
behalf of the Minnesota Farmers Union and National Farmers 
Union from Murdock, Minnesota.
    Next, we have Mr. Brian Sievers. Mr. Brian J. Sievers, who 
is the owner of Sievers Family Farms, Chief Operating Officer, 
AgriReNew, on behalf of America Biogas Council, Stockton, Iowa.
    And we have Mr. Will Harris, who is the owner of White Oak 
Pastures, Bluffton, Georgia, from our beloved State of Georgia. 
Of course, all of our states are beloved.
    I will recognize the gentleman from Indiana, Mr. Baird, to 
make an introduction of our final witness.
    Mr. Baird. Thank you, Chairman Scott, Ranking Member Scott, 
and Members of the Subcommittee, as well as Chairman Peterson 
of the Agriculture Committee and Ranking Member Conaway of the 
Agriculture Committee. It is definitely my privilege to 
introduce to you today the founder and Chairman of Fair Oaks 
Farms, Dr. Mike McCloskey. Dr. McCloskey has followed his 
passion for animal agriculture since the early 1980s when he 
ran a successful veterinary clinic, and this passion has led 
him to creating Fair Oaks Farm, along with one of the nation's 
largest dairy cooperatives, and in that process, the creation 
of a dairy-based wellness product.
    In addition to being Chairman of Fair Oaks Farms, Dr. 
McCloskey has worked tirelessly in the agricultural community 
by serving on numerous boards and associations. He is the 
Chairman of the Environmental Issues Committee within the 
National Milk Producers Federation. And like all farmers, Dr. 
McCloskey understands the need to be good stewards of our 
environment. He has been able to seek out opportunities for 
environmentally sustainable practices that are beneficial to 
agriculture, and a good example is that he installed their 
first anaerobic digester in 2002, which processed cow manure 
and food waste into electricity. Seven years later, they built 
their second digester with the goal of creating renewable 
biogas, and that is some of the information that he is going to 
share with us here today.
    In partnership with Cummins and Kenworth, Dr. McCloskey has 
a fleet of over 40 trucks that run on renewable, compressed 
natural gas from the biogas, and each truck has traveled over 1 
million miles transporting milk from farms to processing 
facilities. This record of achievement is why Dr. McCloskey is 
before us and before this Committee today. He possesses an 
expertise from decades of working in the dairy industry and the 
agricultural industry in general.
    I really look forward to hearing his testimony before this 
Committee and how we can improve the lives of farmers and rural 
communities. I want to welcome Dr. McCloskey.
    Thank you. I yield back.
    The Chairman. Thank you very much.
    The chair would request that any other Members submit their 
opening statements for the record so that our witnesses may 
begin their testimony to ensure we have ample time for 
questions.
    Let me, if I may, start off with my questions. Before I do 
that, Ashley, excuse me for a minute, what would I do without 
ample good staff?
    Now, we will recognize Mr. Falk for 5 minutes.

 STATEMENT OF JIM FALK, PRESIDENT, FALK'S SEED FARM, INC.; CO-
 OWNER, FALK FARM, MURDOCK, MN; ON BEHALF OF MINNESOTA FARMERS 
                 UNION, NATIONAL FARMERS UNION

    Mr. Falk. Chairman Scott, Ranking Member Scott, and Members 
of the Committee, thank you for giving me the opportunity to 
testify today. I'm Jim Falk, a fourth generation farmer from 
Swift County, Minnesota. I farm with my son, Andrew, who is the 
fifth generation to work our land. I am also a member of 
Minnesota Farmers Union and am testifying today on behalf of 
the National Farmers Union.
    Our farm includes about 1,000 acres, of which approximately 
550 are in crop production, 250 in pasture and hay meadow, and 
the balance in conservation programs and wetlands. Since 1985, 
we have also owned a seed cleaning facility, Falk's Seed Farm, 
Inc., which is now a key part of our operation. We are a small 
regional seed company, with the majority of our customers 
farming within a 150 mile radius of our business.
    The energy consumption of the seed plant is significant due 
to the electrical motors needed for processing. We process seed 
or grain for approximately 10 months of the year, with October 
through May being our peak season.
    From 2016 through 2019, the average annual cost of power 
from both sources was $14,332 per year. My wife, Karen, and I 
have been interested in utilizing renewable energy to offset 
our power consumption for quite a while. We wanted to do our 
part to offset our carbon footprint and power the majority of 
the seed plant from renewable energy produced onsite. In 
addition, as the cost of power continues to rise, there should 
be a cost savings for us after the equipment is paid for. In 
2016, we installed a 30-kW wind turbine to connect to our 
three-phase power, and in 2017, we installed a 33-kW solar 
system on the seed plant roof that is connected to our single-
phase power. The tax credits for small wind and solar were 
forecast to be reduced, so we felt we needed to proceed while 
those credits were available. While we applied for grants from 
USDA's Rural Energy for America Program to help fund both 
projects, our applications were unsuccessful. It seems the 
demand for REAP grants far exceeds the funding available.
    With both our wind and solar systems functioning, today we 
are producing approximately 73.7 percent of the seed plant's 
power needs on an annual basis. This hits our target of 
producing approximately 70 percent of the seed plant's power 
needs when we initially made our plan and I believe provides 
long-term sustainability to help reduce our energy cost.
    I was asked to testify today to speak about my experience 
with on-farm wind energy, but my experience also includes on-
farm solar energy as well. As a result, I am familiar with the 
positives and negatives of both.
    To be sure, both energy systems have their place. Wind can 
produce power any time of the day or night if the wind is 
blowing. However, our turbine, in our local wind resources, is 
under performing in comparison to what was projected when I 
purchased the machine. My tower height is 100, and other 
installations with taller towers may likely have higher outputs 
than mine. Our solar system, meanwhile, is performing above 
what was projected as our likely output for power per year.
    The hybrid system I have works well for me; however, I feel 
solar is the safer investment for farmers to produce their own 
renewable energy with a system that fits their operation. It 
makes good sense that farmers and ranchers are able to produce 
their own clean energy onsite. It makes good sense for farmers 
and ranchers to produce their own clean energy onsite. To 
accomplish this, we need tax incentives, including an extension 
of the tax credits for small wind and solar, along with 
increased and targeted research spending, and additionally, 
more funding and farmer access for REAP are needed to get more 
renewable energy systems installed on private lands.
    On-farm renewable energy systems are vital tools for U.S. 
farmers and ranchers and their businesses as they work towards 
economic and environmental sustainability and combat climate 
change. My farm and business are just one example of that.
    Thank you for allowing me to share my experience with you 
today.
    [The prepared statement of Mr. Falk follows:]

 Prepared Statement of Jim Falk, President, Falk's Seed Farm, Inc.; Co-
 Owner, Falk Farm, Murdock, MN; on Behalf of Minnesota Farmers Union, 
                         National Farmers Union
    Chairman Scott, Ranking Member Scott, and Members of the Committee, 
thank you for providing me the opportunity to testify today regarding 
``On-Farm Energy Production: Impacts on Farm Income and Rural 
Communities.''
    I am Jim Falk, a fourth-generation family farmer from Swift County, 
Minnesota. I farm with my son, Andrew, who is the fifth generation to 
work our land. I am also a member of Minnesota Farmers Union and am 
testifying today on behalf of the National Farmers Union (NFU).
    Our farm includes about 1,000 acres, of which approximately 550 are 
in crop production, 250 in pasture and hay meadow, and the balance in 
conservation programs and wetlands. Since 1985, we have also owned and 
operated a seed cleaning facility, Falk's Seed Farm, Inc., which is now 
a key part of our operation. We are a small regional seed company, with 
the majority of our customers farming within a 150 mile radius of our 
business.
    The energy consumption of the seed plant is significant due to the 
electric motors needed for processing. We process seed or grain for 
approximately 10 months of the year--October through May is our peak 
season. The seed plant uses three-phase power for most of the motors 
within the plant. We also use single-phase power for all other seed 
plant electrical needs, including lighting, heat, and temperature 
control for our office. From 2016 through 2019, the average annual cost 
of power from both sources was $14,332 per year.
    My wife, Karen, and I have been interested in utilizing renewable 
energy to offset our power consumption for quite a while. We wanted to 
do our part to offset our carbon footprint and power the majority of 
the seed plant from renewable energy produced onsite. In addition, as 
the cost of power continues to rise, there should be a cost savings for 
us after the equipment is paid for. Minnesota has a net metering law 
that allows for renewable energy systems under 40 kilowatts (kW) to be 
installed for each meter onsite. In 2016, we installed a 30 kW wind 
turbine to connect to our three-phase power, and in 2017, we installed 
a 33 kW solar system on the seed plant roof that is connected to our 
single-phase power. The tax credits for small wind and solar were 
forecast to be reduced, so we felt we needed to proceed while those 
credits were available. While we applied for grants from USDA's Rural 
Energy for America Program to help fund both projects, our applications 
were unsuccessful. It seems the demand for REAP grants far exceeds the 
funding available.
    With both our wind and solar systems functioning, today we are 
producing approximately 73.7 percent of the seed plant's power needs on 
an annual basis. This hits our target of producing approximately 70 
percent of the seed plant's power when we initially made our plan and I 
believe provides long-term sustainability to help reduce our energy 
cost.
    I was asked to testify today to speak about my experience with on-
farm wind energy, but my experience also includes on-farm solar energy 
production. As a result, I am familiar with the positives and negatives 
of both. To be sure, both energy systems have their place. Wind can 
produce power any time of the day or night if the wind is blowing. 
However, our turbine, in our local wind resource, is under performing 
in comparison to what was projected when I purchased the machine. My 
tower height is 100, and other installations with taller towers may 
likely have a higher power output than mine. Our turbine suffered 
damage from a severe weather event in 2019, and it took about 7 months 
to complete the repairs. There is a need for more service technicians 
trained to work on turbine repairs. The turbine is functional again, 
producing power for the seed plant, but it was offline for quite some 
time and is an example of the performance and reliability issues that 
have plagued the small wind industry for some time.
    Solar power generation doesn't face these challenges. Our solar 
system is performing above what was projected as our likely output of 
power per year. The solar panels I have installed have a 25 year 
warranty, and because they are mounted on our roof, there are no moving 
parts to wear or break. Repair and maintenance issues for a solar 
system are minimal compared to a wind turbine. As the cost of solar 
continues to come down, solar will be more appealing to farmers and it 
will be harder for small wind companies to compete.
    The hybrid system I have works well for me, but, in my opinion, 
solar is the safer investment for farmers who wish to install a 
renewable energy system. The fact is, both these systems work and there 
is a lot of interest in using both wind and solar on the farm. However, 
I feel there needs to be a greater effort to encourage farmers to 
produce their own renewable energy. It just makes good sense that 
farmers and ranchers are able to produce their own clean energy onsite.
    To be sure, renewable energy production presents a lot of 
opportunities for farmers.\1\ Between 2012 and 2017, there was a 132 
percent increase in the number of farms that were generating their own 
power from renewable sources.\2\ The number of farms with wind turbines 
increased by 56 percent during that time period, while solar panel 
installations increased by 148 percent. Farmers also invested in 
geothermal/geoexchange systems and a small number of methane 
digest[e]rs during that time.
---------------------------------------------------------------------------
    \1\ NFU staff provided background research and assisted in the 
compilation of this document.
    \2\ USDA 2017 Census of Agriculture:https://www.nass.usda.gov/
Publications/AgCensus/2017/Full_Report/Volume_1,_Chapter_1_US/
st99_1_0049_0050.pdf.
---------------------------------------------------------------------------
    As of 2017, there were about 81,000 small-scale wind turbines 
installed at homes, farms, and other facilities across the United 
States--about \1/4\ of which were for agricultural uses.\3\ The center 
of the United States, from Texas to North Dakota, has particularly good 
conditions for wind energy production.\4\ Minnesota ranked third in 
2017 for distributed wind generation capacity, behind Iowa and Texas.
---------------------------------------------------------------------------
    \3\ DOE 2017 Distributed Wind Market Report: https://
www.energy.gov/eere/wind/downloads/2017-distributedwind-market-report.
    \4\ U.S. Energy Information Administration: https://www.eia.gov/
todayinenergy/detail.php?id=31032#tab2.
---------------------------------------------------------------------------
    NFU supports policies that expand the production and use of on-farm 
renewable energy. NFU, which is a member of the AgEnergy Coalition, 
supports making renewable energy development, and reducing U.S. 
dependence on fossils fuels, a top priority. This includes through 
ambitious national investments renewable energy production. Our 
nation's farmers and ranchers will be a key player in reaching these 
necessary goals. Private agricultural lands can host wind and solar 
infrastructure that can power farms and, if large enough, sell energy 
back to the grid. The production of biofuels feedstocks can help to 
ease America's reliance on petroleum to fuel our vehicle fleet, while 
woody biomass is a sustainable source for heating and power generation. 
A combination of these and other renewable energy production 
technologies will be needed to ensure a sustainable and climate 
friendly future for America.
    Tax incentives, including an extension of tax credits for small 
wind and solar, increased and targeted research spending, limits on 
consolidation in the renewable energy sector, and more funding and 
farmer access for REAP are needed to get more renewable energy systems, 
especially promising but underutilized technologies, installed on 
private lands across the country. Lawmakers should also protect and 
expand the Renewable Fuel Standard, recognizing its importance as both 
a key tool for curbing the effects of climate change and a market for 
U.S. farmers.
    All told, on-farm renewable energy and biofuels production are 
vital tools for U.S. farmers and ranchers and their businesses as they 
work toward economic and environmental sustainability and combat 
climate change. Our farm and business are just one example of that.
    Thank you for allowing me to share my experience with you today.

    The Chairman. Mr. Brian J. Sievers, owner of Sievers Family 
Farms, Chief Operating Officer, AgriReNew, on behalf of America 
Biogas Council, Stockton, Iowa. We will hear your 5 minutes.

   STATEMENT OF HON. BRYAN J. SIEVERS, OWNER, SIEVERS FAMILY 
FARMS; CHIEF OPERATING OFFICER, AgriReNew; VICE CHAIR, BOARD OF 
        DIRECTORS, AMERICA BIOGAS COUNCIL, STOCKTON, IA

    Mr. Sievers. Chairman Scott, Ranking Minority Member Scott, 
Chairman Peterson, Ranking Member Conaway, and Members of the 
Committee, thank you for asking me to testify today.
    During these especially unsettling times, I am grateful to 
share with you how farm energy production has helped my bottom 
line, improved the risk-bearing ability of our farm, and 
benefitted the community around us.
    My wife Lisa and I are fifth generation owners of a farm 
near Stockton, Iowa. We run a 2,400 head beef cattle feedlot. 
We produce corn, soybeans, and hay on approximately 2,200 
acres. Our farm operates two complete mix anaerobic digesters, 
which produces biogas that is used to generate electricity 
which is sold to Alliant Energy, as well as reclaimed heat, 
which is used to heat our digesters and other outbuildings. We 
use a variety of feedstocks in the digesters, including beef 
cattle manure, biomass from our farm fields, organic food 
residuals left over from processing food, and purpose-grown 
cover crops. Conservation and environmental stewardship are 
paramount to our operation. We have implemented numerous water 
and soil quality practices over the years, including grassed 
waterways, field borders, buffer strips, terraces, contour 
farming, no-till, strip-till, grid soil sampling, and cover 
crops.
    When my wife and I constructed our digesters and renewable 
energy facility on our farm in 2013, we were grateful to 
receive support from the Federal Government through a few 
programs: the Renewable Energy for America Program, or REAP; 
the Environmental Quality Incentives Program, or EQIP; a 
Section 1603 energy grant through the American Recovery and 
Reinvestment Act; and an energy efficiency rebate from our 
local service provider, Alliant Energy. We also participated in 
the Biomass Crop Assistance Program, where the biomass we 
captured from our cornfields was first used as bedding for our 
cattle, and then as a substrate in our digesters. Without the 
significant support we received from the Federal Government 
from programs like REAP and EQIP, as well as the BCAP Program, 
we would not have been able to build our highly functioning 
biogas systems, which generate renewable energy and soil 
products, while making our farm more sustainable and protecting 
our air, water, and soil.
    From an investment standpoint, we leveraged these Federal 
programs to secure $4.8 million in private investments to 
construct our digester facilities so that for every Federal 
dollar spent, almost $5 in new private investment has been 
made.
    Unfortunately, funding for many of these programs has 
disappeared since 2013. Reinstating the funding for these and 
other valuable programs will allow farmers and ranchers to 
design and construct on-farm anaerobic digester facilities so 
they can realize the benefits we have received which have 
helped us weather financial challenges due to falling commodity 
prices, to improve our water quality, soil health, and 
management of organic waste streams from our beef cattle 
feedlot, as well as other agricultural processing facilities in 
our region.
    When it comes to addressing our changing climate, enhancing 
water and air quality, improving soil health, increasing 
agriculture sustainability, while providing valuable economic 
benefits, I genuinely believe on-farm anaerobic digesters can 
play a vital and significant role.
    I serve as Vice Chair and board member of the American 
Biogas Council, which represents over 200 companies in all 
parts of the biogas supply chain. We also collaborate with the 
AgEnergy Coalition, and Solutions from the Land. These 
organizations believe that strengthening on-farm economies is 
key to advancing the deployment of renewable energy, and the 
production of biofuels and renewable chemicals.
    Many aspects of the 2018 Farm Bill support on-farm energy 
production, most of which are included in the energy title. 
These programs create high value jobs and new income streams 
for American farmers, accelerate the commercialization of new 
technologies, and support the construction of biogas systems 
and biorefinery systems in rural communities. I urge the 
Committee to push for full implementation of the farm bill and 
support robust annual appropriations for these exceptionally 
impactful programs.
    We are especially pleased to see that the appropriators 
have recognized the need to support technologies that have been 
historically under-funded within REAP by establishing a REAP 
reserve fund for under-served technologies such as biogas and 
small wind energy. This House Appropriations Committee 
encouraged USDA to establish the reserve fund and provided $10 
million in funding for a pilot program to be created at the 
USDA. We are hopeful that this will improve access and we will 
see greater deployment of these exceptionally valuable 
technologies.
    The farm bill also contained two initiatives of importance 
to the biogas industry. Section 9011, the Carbon Utilization 
and Biogas Education Program, was established and recognized 
that digesters are one of the greatest methods available to 
trap methane-emitting waste products and convert it to 
renewable energy and nutrient-rich soil amendments. However, 
this program has yet to receive funding. Another priority 
highlighted by the Committee in the conference report, the 
establishment of the Biogas Opportunities Roadmap Taskforce, 
has yet to be acted upon by the USDA. While outside of the 
jurisdiction of this Committee, we also urge the Committee to 
support the Renewable Fuel Standard as it continues to provide 
value to on-farm energy producers. A strong and properly 
administered RFS not undermined by the unscrupulous issuances 
of small refinery exemptions raises all boats in the rural 
economy. We also urge the Committee to support efforts to 
extend tax policies that support on-farm energy production such 
as the PTC and ITC for renewable energy, and to take under 
advisement the recent recommendations pertaining to sustainable 
agriculture released by the House Select Committee on Climate.
    Thank you for your time today, and I will be happy to 
answer any questions.
    [The prepared statement of Mr. Sievers follows:]

  Prepared Statement of Hon. Bryan J. Sievers, Owner, Sievers Family 
    Farms; Chief Operating Officer, AgriReNew; Vice Chair, Board of 
            Directors, America Biogas Council, Stockton, IA
Introduction
    Chairman Scott, Ranking Minority Member Scott, and Members of the 
Committee, thank you for asking me to testify at today's hearing 
regarding On-Farm Energy Production: Impacts on Farm Income and Rural 
Communities.
    My wife Lisa and I own and operate Sievers Family Farms near 
Stockton, Iowa. We are fifth generation Iowa farmers that run a 2,400 
head beef cattle feedlot, produce corn, soybeans, and hay on 
approximately 2,200 acres. Our farm operates two complete-mix anaerobic 
digesters where we produce biogas that is used to generate renewable 
electricity, which is sold to Alliant Energy, and reclaimed heat, which 
is used to heat our digesters and other buildings on our farm. We focus 
on stewardship and conservation of our natural resources in our 
operations and have implemented numerous water quality and soil health 
practices over the years, including grassed waterways, field borders, 
buffer strips, terraces, contour-farming, no-till and strip-till, grid 
soil sampling, and cover crops.
    When my wife and I constructed our digesters and renewable energy 
facility on our farm in 2013 we were grateful to receive support from 
the Federal Government through a few programs: the Rural Energy for 
America Program (REAP), Environmental Quality Incentives Program 
(EQIP), a Section 1603 Energy grant through the American Recovery and 
Reinvestment Act, and an energy efficiency rebate from our local 
service provider, Alliant Energy. We also participated in the Biomass 
Crop Assistance Program (BCAP) where the biomass we captured from our 
corn fields was used first as bedding for our cattle and then as a 
substrate in our digesters. Without the significant support we received 
from the Federal Government for programs like REAP and EQIP, as well as 
the BCAP program, we would not have been able to build our highly 
functioning biogas system which generates renewable energy and soil 
products while making our farm more sustainable and protecting our air, 
water, and soil. From an investment standpoint, we leveraged these 
Federal programs to secure $4.8 million in private investments to 
construct our digester facilities, so that for every Federal dollar 
spent, almost $5 in new private investment have been made.
    As a result of my experience in agriculture and anaerobic 
digestion, I also serve as a Vice-Chair on the Board of Directors of 
the American Biogas Council (ABC) which is the only national trade 
association representing the entire biogas industry in the U.S. We 
represent over 220 companies in all parts of the biogas supply chain 
who are dedicated to maximizing the production and use of biogas from 
organic waste. The mission of the ABC is to grow biogas business in the 
United States which creates jobs, protects our air, water and soil and 
catalyzes energy independence and new investments. Biogas systems 
provide waste management solutions for organic material, recycle 
nutrients, create soil products, and produce energy, most often in the 
form of either electricity or biogas, which can be upgraded into 
renewable natural gas (RNG).
    Biogas systems are one of the most comprehensive ways to recycle 
organic waste streams. At their core, biogas systems recycle organic 
wastes into renewable energy and soil amendment products using the 
natural process of anaerobic digestion. Biogas systems create 
sustainable recovered materials management solutions for organic wastes 
such as food waste, animal manures, wastewater treatment biosolids, 
yard trimmings, and organic waste from the industrial processing of 
food. Biogas systems also recycle nutrients like nitrogen, phosphorus, 
potassium, calcium, and sulfur which reduce the need to produce 
synthetic fertilizers for our agriculture industry. Biogas systems 
reduce odor and greenhouse gas emissions both from the organic wastes 
they recycle and the fossil fuels they replace. On the energy side, 
biogas systems are unique among renewable energy technologies because 
they produce energy 24/7 365 days a year with a 95% combined efficiency 
rate producing electricity, heat, and/or renewable natural gas (RNG). 
Biogas systems produce energy and other products while providing solid 
waste recycling infrastructure and protecting our air, water and soil.
    Biogas systems are a powerful tool for managing organic waste 
streams and creating on farm renewable energy. When biogas systems are 
coupled together with other renewable energy technologies like solar, 
wind, and energy storage they can provide 24/7 baseload power during 
the times that intermittent technologies are not producing power. 
Furthermore, biorefineries that are joined to or use an auxiliary 
biogas system can produce renewable natural gas from the waste product 
remains from the production of ethanol or grain alcohol. The renewable 
natural gas produced from the biogas system is then used to power the 
ethanol or grain alcohol plant and as a result, greatly lowers the 
greenhouse gas intensity of the biorefinery.
    The ABC is in turn a member of the AgEnergy Coalition, a group of 
organizations committed to a strong, bipartisan support of on-farm 
energy production. The ABC and the AgEnergy Coalition believe that 
strengthening rural America and on-farm economies are two key ways to 
advance the deployment of renewable energy, and the production of 
biofuels and renewable chemicals.
    Over the past few years, I have become very involved in Federal 
policy affecting the digester industry. I have also been and remain 
involved in advocating for state polices that affect the agricultural 
and rural economy. The experiences I gained while serving in the Iowa 
House of Representatives (2001-2003) and the Iowa Senate (2003-2004) 
helped me draft legislation in 2011 which expanded Iowa's renewable 
energy tax credit program for anaerobic digesters and biogas producers 
that generated electricity for re-sale to the electric utilities. This 
bill passed the Legislature and was signed into law by Governor 
Branstad in 2011.
    I also served as Chair of the Biomass Conversion Committee. This 
committee was created by the Iowa Economic Development Authority as a 
result of the 2016 Iowa Energy Plan which was developed under the 
authority of then Lieutenant Governor Kim Reynolds. Our Biomass 
Conversion Committee prepared a Biomass Action Plan in the spring of 
2018, now included in Iowa's comprehensive renewable energy policy. The 
Biomass Action Plan focuses on ways to enhance water quality, air 
quality, and soil health. Producing renewable electricity and renewable 
natural gas from the biogas produced through the anaerobic digestion of 
organic waste streams and manure is a key part of the Plan to reach 
those goals.
Supporting the BioEconomy
    I come before you today to urge the Committee to continue to 
support On-Farm Energy Production. One of the best ways to do so is to 
closely oversee the implementation of the 2018 Farm Bill especially the 
energy title programs which encourages on farm energy production. This 
important piece of legislation contains many programs intended to help 
farmers diversify their income streams. In the midst of trade wars, the 
Administration's actions to undermine the Renewable Fuel Standard (RFS) 
and the effects of [COVID-19], the farm bill energy title programs 
continue to provide value to farmers, agricultural producers and small 
rural businesses. American farmers and rural communities are hurting. 
The challenges farmers are facing between low commodity prices caused 
by escalating trade wars, [COVID-19], and the gutting of the RFS caused 
by issuing more Small Refinery Exemptions than ever before has created 
significant financial pressures on farmers and ranchers. In both cases, 
the Trump Administration's actions have dramatically decreased the 
value of several of the products we and our fellow farmers produce 
which dramatically reduces the revenue we need to keep our farm 
operating.
    Members of Congress have labored over numerous farm bills to craft 
policies that minimize fluctuations caused by commodity price 
volatility. As Members of this Committee continue to implement the 2018 
Farm Bill, we ask Members to keep in mind the value of our 21st century 
biobased economy which can help offset some of the earlier discussed 
headwinds affecting our farms, families and the agriculture economy. 
Chief among these policies is the energy title, title IX, which creates 
high-value jobs and new income streams for American farmers, 
accelerates the commercialization of new technologies and products 
derived from agriculture, and supports construction of biogas systems 
and biorefinery manufacturing facilities in rural communities. 
Conventional and advanced biofuels (including renewable natural gas 
derived from biogas), chemicals, and biobased products made with 
biotechnology can drive the demand for crops (including cover crops) 
and crop residuals. This can boost on-farm revenue.
    The 2018 Farm Bill (Agriculture Improvement Act of 2018; P.L. 115-
334) extends most of the 2014 Farm Bill energy title programs through 
FY 2023 and provides new mandatory funding. It establishes one new 
program of great interest to the American Biogas Council--the Carbon 
Utilization and Biogas Education Program. Unfortunately, however, the 
2018 Farm Bill provides less mandatory funding than previous farm bills 
for energy title programs. For instance, the 2018 Farm Bill energy 
title programs mandatory funding level ($375 million) is approximately 
46% less than the mandatory funding provided in the 2014 Farm Bill 
($694 million). Alternatively, the total discretionary authorization 
provided by the 2018 Farm Bill ($1.7 billion) is approximately 13% more 
than what was authorized in the 2014 Farm Bill ($1.5 billion) for the 
energy programs. While the latter increase sounds positive, most energy 
title programs have not received discretionary appropriations under 
previous appropriation bills, something that should change.
    To ensure the American bioeconomy and on farm energy generation 
continues to expand, Congress must continue to oversee the 
implementation of the 2018 Farm Bill. Given the discrepancy in 
mandatory energy title funding between the 2014 and 2018 Farm Bill, we 
urge Congress to increase annual discretionary funding to ensure the 
success of these programs. We ask that this Committee continue to work 
with Appropriators to encourage robust funding of the discretionary 
amounts for energy title programs. Robust discretionary funding will 
support additional deployment of on-farm renewable energy and catalyze 
the development of American biotechnologies that convert domestic crops 
and agricultural residues to energy and value-added products, while 
also creating high paying rural jobs, encouraging economic growth, and 
improving the health of our environment.
    The following are the programs contained within title IX of the 
2018 Farm Bill which support our industry and for each one:

   a description of how the programs work;

   products these programs have helped develop; and

   how the ABC believes these programs can be improved in their 
        implementation.
Farm Bill Energy Title Programs
   Section 9002 Biobased Markets Program, known as the 
        BioPreferred' Program

   Section 9003 Biorefinery, Renewable Chemical, and Biobased 
        Product Assistance Program (BAP)

   Section 9005 Bioenergy Program for Advanced Biofuels

   Section 9007 Rural Energy for America Program (REAP)

   Section 9008 Biomass Research and Development (BRDI)

   Section 9010 Biomass Crop Assistance Program (BCAP)

   Section 9011 Carbon Utilization and Biogas Education Program
Section 9002, the Biobased Market Program, or the 
        BioPreferred' Program
    The goal of the BioPreferred' Program is to increase the 
purchase and use of biobased products from agricultural feedstocks. The 
program's purpose is to spur economic development, create new jobs and 
provide new markets for farm commodities. The increased development, 
purchase, and use of biobased products reduces our nation's reliance on 
petroleum, increases the use of renewable agricultural resources, and 
mitigates adverse environmental and health impacts.\1\
---------------------------------------------------------------------------
    \1\ USDA BioPreferred https://www.biopreferred.gov/BioPreferred/
faces/Welcome.xhtml.
---------------------------------------------------------------------------
    BioPreferred' achieves these goals through two 
initiatives: (1) a mandatory purchasing requirement for Federal 
agencies and their contractors and (2) a voluntary labeling initiative 
for biobased products. Products that meet the minimum biobased content 
criteria may display the USDA Certified Biobased Product label.\2\
---------------------------------------------------------------------------
    \2\ Ibid.
---------------------------------------------------------------------------
    Under the Biobased Markets Program, Federal agencies and their 
contractors are generally required to purchase biobased products from 
109 categories of goods--among which are cleaners, carpets, lubricants, 
office supplies, and paints--when an agency procures $10,000 or more 
worth of an item within these categories during the course of a fiscal 
year, or where the quantity of such items or of functionally equivalent 
items purchased during the preceding fiscal year was $10,000 or 
more.\3\
---------------------------------------------------------------------------
    \3\ Ibid, Product Categories.
---------------------------------------------------------------------------
    The 2018 Farm Bill extended the Biobased Markets Program through FY 
2023, while adding some new implementation requirements. It requires 
the Secretary to update the eligibility criteria for determining which 
renewable chemicals will qualify for a ``USDA Certified Biobased 
Product'' label. It also requires the Secretary and the Secretary of 
Commerce to develop new North American Industry Classification System 
(NAICS) codes for both renewable chemical manufacturers and biobased 
product manufacturers, and for the Secretary to establish a national 
registry of testing centers for biobased products. Additionally, it 
requires USDA to establish an expedited approval process for products 
to be determined eligible for the procurement program and to receive a 
biobased product label. Finally, the 2018 Farm Bill prohibits a 
procuring agency from establishing procurement guidelines for biobased 
products that are more restrictive than what the Secretary has 
established. The 2018 Farm Bill authorized mandatory funding of $3 
million for each of FY 2019-FY 2023 for biobased products testing and 
labeling. Discretionary funding of $3 million was authorized to be 
appropriated for each of FY 2019-FY 2023. We urge the Committee's 
support of fully annual discretionary funding.
Recommendations
    The BioPreferred' Program could be better utilized to 
create an initial market for the full range of products from a biogas 
system including fiber, nutrient products, digestate. The promotion of 
nutrient recycling is especially important in watersheds designated as 
distressed. The U.S. is witnessing significant water quality issues 
which could be addressed by processing manures and extracting the 
nutrients. These nutrients can then be further processed, taken out of 
the water shed, and be sold as sustainable fertilizer. The ABC 
encourages the BioPreferred' Program to be more inclusive of 
biogas system products, especially those generated from digestate, the 
digested organic material from an anaerobic digester.
    Furthermore, we encourage USDA to increase outreach and education 
to augment public awareness and acceptance of renewable chemicals and 
biobased products through BioPreferred' program's voluntary 
labeling and procurement system. Finally, we ask that the Committee 
support the full annual appropriation of $3 million in discretionary 
funding for FY 2020-2023.
Section 9003 Biorefinery, Renewable Chemical, and Biobased Product 
        Assistance Program
    This program assists in the development of new and emerging 
technologies for advanced biofuels, renewable chemicals, and biobased 
products. Competitive grants and loan guarantees are available for 
construction and/or retrofitting of demonstration-scale biorefineries 
to demonstrate the commercial viability of one or more processes for 
converting renewable biomass to advanced biofuels.\4\
---------------------------------------------------------------------------
    \4\ USDA Biorefinery Renewable Chemical and Biobased Product 
Manufacturing Assistance Program https://www.rd.usda.gov/programs-
services/biorefinery-renewable-chemical-and-bio
based-product-manufacturing-assistance.
---------------------------------------------------------------------------
    This loan guarantee program enables producers to access capital for 
large-scale projects in rural communities. Without the loan guarantee 
program, new technologies might never be able to pool sufficient 
capital to commence development of a project in a rural community with 
a small population.
    The 2018 Farm Bill extended the program through FY 2023. It 
expanded the definition of eligible technology to include technologies 
that produce one or more of the following, or a combination thereof: an 
advanced biofuel, a renewable chemical, or a biobased product. The 2018 
Farm Bill authorized mandatory funding of $50 million for FY 2019 and 
$25 million for FY 2020 for the cost of loan guarantees. Discretionary 
funding of $75 million was authorized to be appropriated for each of FY 
2019-FY 2023. We urge the Committee to support providing an additional 
$75 million to this impactful program. support of fully annual 
discretionary funding.
Recommendations
    This incredibly impactful program has allowed companies to put 
steel in the ground for first-of-their-kind biorefineries. These 
biorefineries are proven job and economic growth drivers for rural 
communities. We urge the Committee to support appropriating the maximum 
funding authorized--$75 million annually--through 2023.
Section 9005 Bioenergy Program for Advanced Biofuels
    This program encourages production of advanced biofuels, other than 
corn starch ethanol. The policy goal is to create long-term, sustained 
increases in advanced biofuels production. Awards are made through 
Rural Development to biofuels producers, based on the amount of 
advanced biofuels produced from renewable biomass. Feedstocks 
incentivized by this program include crop residue, food and yard waste, 
vegetable oil and animal fat. The program has promoted the development 
of biogas, wood pellets, biodiesel, and advanced and cellulosic 
ethanol.\5\
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    \5\ USDA Advanced Biofuel Payment Program https://www.rd.usda.gov/
programs-services/advanced-biofuel-payment-program.
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    Section 9005 funding helps stakeholders increase their return on 
investment, which is needed to proceed with constructing a new plant or 
expanding capacity at an existing facility. Without Section 9005 
mandatory funding, companies working on advanced biofuel technologies 
have one less tool to support innovation and commercialization of the 
cleanest fuels in the world. Current USDA funding programs help 
advanced biofuels succeed; the industry cannot afford to be without one 
of these programs.
    The 2018 Farm Bill authorized mandatory funding of $7 million for 
each of FY 2019-FY 2023. Discretionary funding of $20 million was 
authorized to be appropriated for each of FY 2019-FY 2023. We ask the 
Committee to continue to support the appropriation of full 
discretionary funding for the Bioenergy Program for Advanced Biofuels 
through FY 2023.
Section 9007 Rural Energy for America (REAP)
    This outstandingly popular, successful, and constructive program 
supports every state and region and renewable energy and energy 
efficiency technology. REAP provides benefits to the full agricultural 
value chain, from producers and co-ops, to biotechnology and clean 
energy companies operating across rural America.\6\ Over 13,000 
projects across all 50 states have received awards since its inception 
in the 2008 Farm Bill, leveraging more than $3 billion in private 
investment. REAP is one of the rural economy's best methods to drive 
growth in America's energy infrastructure and resiliency.
---------------------------------------------------------------------------
    \6\ USDA Rural Energy for America Program https://www.rd.usda.gov/
programs-services/rural-energy-america-program-renewable-energy-
systems-energy-efficiency.
---------------------------------------------------------------------------
    The program has been instrumental in helping deploy biogas systems 
throughout the rural economy allowing agricultural producers, through 
the use of digesters, to make products from waste streams--manure and 
crop residues--that would otherwise be viewed as an environmental 
challenge. Farmers can now take these wastes streams and make on-farm 
renewable energy, nutrient-rich soil amendments, fertilizers, renewable 
natural gas, and even feedstocks for renewable chemicals and 
bioplastics. The sale of all these products helps protect the 
agricultural producer from swings in commodity prices.
    The 2018 Farm Bill extends the program through FY 2023. It also 
retains mandatory funding of $50 million for FY 2014 and each fiscal 
year thereafter (thus, unlike other farm bill renewable energy 
programs, REAP's mandatory funding authority does not expire with the 
2018 Farm Bill). Mandatory funds are to remain available until 
expended. Discretionary funding is authorized to be appropriated at $20 
million annually for each of FY 2019-FY 2023. We urge the Committee's 
support of fully annual discretionary funding.
Recommendations
    This widely popular program has been oversubscribed year after 
year. We urge the Committee to support appropriating the maximum 
funding authorized--$20 million annually--through 2023.
    Historically, digesters and other under-served technologies such as 
small-scale wind have disproportionately been unsuccessful in securing 
REAP funding. The ABC and the AgEnergy Coalition encouraged the 
establishment of a reserve fund that would better support these 
``under-served technologies,'' by setting aside no more than 10% of the 
funding for these under-served technologies and returning any unused 
funds back into the applicant pool. We understand that this concept is 
something the Committee recognizes, and that USDA has used similar 
structures in the past.
    In the FY 2021 Agriculture Appropriations bill, the Committee 
encouraged USDA to establish the reserve fund and provided $10 million 
in funding for a pilot program to effectuate the same goals as the 
reserve fund. We support both improving REAP for undeserved 
technologies and the new pilot at USDA to address this problem. We are 
hopeful that these two efforts fund for under-served technologies such 
as biogas will improve access and that farmers, ranchers and small 
rural businesses can further deploy this exceptionally valuable 
technology. USDA should be in the business of promoting development of 
lessmarket mature but proven technologies like biogas and small-scale 
wind in REAP, as it does in other programs.
Section 9008 Biomass Research and Development Initiative (BRDI)
    The Biomass Research and Development Initiative (BRDI) seeks to 
foster significant commercial production of biofuels, biobased energy 
innovations, development of biobased feedstocks, and biobased products 
and processes, including cost-competitive cellulosic ethanol. The 
program provides competitive funding in the form of grants, contracts, 
and financial assistance for research, development, and demonstration 
of technologies and processes. Eligibility is limited to institutions 
of higher learning, national laboratories, Federal or state research 
agencies, private sector entities, and nonprofit organizations.\7\
---------------------------------------------------------------------------
    \7\ USDA National Institute of Food and Agriculture BRDI https://
nifa.usda.gov/funding-opportunity/biomass-research-and-development-
initiative-brdi.

    BRDI provides coordination of biomass research and development, 
including life-cycle analysis of biofuels, between USDA and DOE by 
creating the Biomass Research and Development Board to coordinate 
government activities in biomass research, and the Biomass Research and 
Development Technical Advisory Committee to advise on proposal 
direction and evaluation.\8\
---------------------------------------------------------------------------
    \8\ Ibid.
---------------------------------------------------------------------------
    Applicants seeking BRDI funding must propose projects that 
integrate science and engineering research in the following three 
technical areas that are critical to the broader success of alternative 
biofuels production: feedstock development, biofuels and biobased 
products development, and biofuels development analysis.
    The 2018 Farm Bill extended the program through FY 2023. It amends 
the definition of biobased product to include carbon dioxide, and it 
requires the Initiative's technical advisory committee to include an 
individual with expertise in carbon capture, utilization, and storage. 
Furthermore, it expands the objectives of the Initiative to include the 
development of high-value biobased products that permanently sequester 
or utilize carbon dioxide. The 2018 Farm Bill provided no mandatory 
funding for the program. Discretionary funding of $20 million is 
authorized to be appropriated annual for FY 2019-FY 2023. However, no 
discretionary funding has been appropriated for BRDI through FY 2020.
Recommendations
    Further research into feedstock development and technology 
optimization will help encourage far greater deployment of 
biotechnologies including anaerobic digesters throughout the U.S. We 
urge the Committee to support full annual discretionary funding of BRDI 
at $20 million for FY 2020-2023. Appropriations cuts in past years have 
led to smaller grants, limiting the diversity of projects.
Section 9010 Biomass Crop Assistance Program (BCAP)
    The Biomass Crop Assistance Program (BCAP) provides financial 
assistance to owners and operators of agricultural and non-industrial 
private forestland who wish to establish, produce, and deliver biomass 
feedstocks.\9\ BCAP provides assistance by either (1) establishment of 
annual payments or (2) matching payments.
---------------------------------------------------------------------------
    \9\ USDA BCAP https://www.fsa.usda.gov/programs-and-services/
energy-programs/BCAP/.
---------------------------------------------------------------------------
    Establishment and annual payments are available to certain 
producers who enter into contracts with USDA to produce eligible 
biomass crops on contract acres within designated BCAP project 
areas.\10\ Eligible land for BCAP project area contracts includes 
agricultural land and nonindustrial private forestland, but does not 
include Federal or state-owned land, or land that is native sod. Lands 
enrolled in existing land retirement programs for conservation 
purposes--the Conservation Reserve Program (CRP) or the Agricultural 
Conservation Easement Program (ACEP)--also become eligible during the 
fiscal year that their land retirement contract expires. Generally, 
crops that receive payments under title I, the commodity title, of the 
farm bill (e.g., corn, wheat, rice, and soybeans), plus noxious weeds 
and invasive species are not eligible for annual payments.
---------------------------------------------------------------------------
    \10\ See FSA, USDA, ``BCAP Project Area Information,'' at https://
www.fsa.usda.gov/programs-andservices/energyprograms/BCAP/bcap-project-
area/index.
---------------------------------------------------------------------------
    Matching payments are available to eligible material owners who 
deliver that material to qualified biomass conversion facilities. 
Eligible material must be harvested directly from the land and 
separated from a higher-value product (e.g., title I crops). Invasive 
and noxious species are considered eligible material, and land 
ownership (private, state, Federal, etc.) is not a limiting factor to 
receive matching payments.
    Despite initial challenges, this program remains crucial to 
developing the feedstocks necessary for the biobased economy. The 
program's regionally appropriate biomass feedstocks are key to the 
development of sustainable systems for biofuels, renewable chemicals, 
and biobased products.
    BCAP has incentivized nearly 1,000 growers and landowners farming 
nearly 49,000 acres to establish and produce dedicated, non-food energy 
crops for delivery to energy conversion facilities.\11\ In 2014 and 
2015, USDA approved 209 contracts for matching payments of $15.8 
million toward the collection or harvest of approximately 300,000 dry 
tons of forest residues from National Forest Service and Bureau of Land 
Management public lands. Forest residues are removed for the reduction 
or containment of disease or insect infestation and reduction of 
wildfire threat, the last of which is a significant threat to the 
Western U.S.\12\
---------------------------------------------------------------------------
    \11\ Biomass Crop Assistance Program (BCAP) Qualified Biomass 
Conversion Facilities (BCF's) FY 2017 https://www.fsa.usda.gov/Assets/
USDA-FSA-Public/usdafiles/Energy/BCAP%20
Facility%20Listing%20FY2017.pdf.
    \12\ USDA Resumes Incentives to Grow the Bioeconomy and Improve 
Forest Health. https://www.fsa.usda.gov/news-room/news-releases/2016/
nr_20161110_rel_185.
---------------------------------------------------------------------------
    The 2018 Farm Bill extended BCAP through FY 2023 and expanded the 
definition for eligible material to include algae. Unfortunately, the 
2018 Farm Bill provided no mandatory funding for the program. 
Discretionary funding of $25 million was authorized to be appropriated 
for each of FY 2019-FY 2023. No discretionary funding was provided for 
FY 2020.
Recommendations
    When well-funded, BCAP has the potential to be a huge benefit to 
the development of the biobased economy and to farmers and agricultural 
producers looking to diversify their income streams. We urge the 
Committee to support full annual discretionary funding of BCAP at $25 
million for FY 2020-2023.
Section 9011 Carbon Utilization and Biogas Education Program
    This new program was established in the 2018 Farm Bill and requires 
the Secretary to award competitive grants to eligible entities for two 
purposes:

  1.  education to the public and biogas producers about the benefits 
            of carbon utilization and sequestration; and

  2.  education about the opportunities to aggregate multiple sources 
            of organic waste into a single biogas system.

    The 2018 Farm Bill provided no mandatory funding for the program 
but authorized discretionary funding of $2 million annual for each of 
FY 2019-FY 2023. No funds have been appropriated through FY 2020.
Recommendations
    While anaerobic digestion technology is mature, greater deployment 
throughout the rural economy has been slowed due to a lack of awareness 
and farmer education about how they work and their benefits. Digesters 
are one of the greatest methods available to trap methane emitting 
waste products such as manure and crop residues and convert it to 
renewable energy, nutrient-rich soil amendments, fertilizers, renewable 
natural gas, and feedstocks for renewable chemicals and bioplastics. 
Providing greater education and outreach to farmers and agricultural 
producers could greatly increase the deployment of digesters as well as 
the utilization of farm bill energy title programs that support 
digesters. We urge the Committee to support fully funding the $2 
million authorized annually for this program.
Biogas Opportunities Task Force
    Language directing USDA, EPA and DOE to establish an Interagency 
Biogas Opportunities Task Force (building upon the existing Biogas 
Opportunities Working Group) was contained in the conference report 
accompanying the 2018 Farm Bill.
    This provision states that no later than 180 days after the date of 
enactment of the Agriculture Improvement Act of 2018, the USDA 
Secretary in coordination with the Secretary of Energy and the EPA 
Administrator will establish an Interagency Biogas Opportunities Task 
Force to coordinate policies, programs, and research to accelerate 
biogas research and investment in cost-effective biogas systems.
    The Task Force is to be composed of the head of each Federal office 
responsible for biogas research or biogas system financing, including a 
representative from the Department of Agriculture, the Department of 
Energy, the Environmental Protection Agency (EPA), and National 
Renewable Energy Laboratory. The Task Force will also have one or more 
representatives of state or local governments, one or more 
nongovernmental or industry stakeholders, and a community stakeholder.
    The Task Force will evaluate and improve the coordination of loan 
and grant programs of the Federal agencies represented on the Task 
Force to broaden the financing options available for biogas systems. It 
will also explore how to enhance opportunities for private financing of 
biogas systems; review Federal procurement guidelines to ensure that 
products of biogas systems are eligible for and promoted by applicable 
procurement programs of the Federal Government; evaluate the 
development of North American Industry Classification System and North 
American Product Classification System codes for biogas and biogas 
system products; review opportunities and develop strategies to 
overcome barriers to integrating biogas into electricity and renewable 
natural gas markets; develop tools to broaden the market for non-energy 
biogas system products; provide information on the ability of biogas 
system products to participate in markets that provide environmental 
benefits; identify and investigate research gaps in biogas and 
anaerobic digestion technology; including research gaps in 
environmental benefits, market assessment; and performance standards; 
assess the most cost-effective voluntary investments in biogas to 
reduce waste and methane emissions; and identify and advance additional 
priorities, as determined by the Task Force.
    Not later than 18 months after the date of the establishment of the 
Task Force, the Task Force will submit to Congress a report that 
identifies whether it was able to carry out the duties outlined above 
and include recommendations on how Congress should prioritize policies 
and technological opportunities, aimed at expanding the biogas 
industry. The report will also consider recommendations on how to 
eliminate barriers to investment in biogas systems in the landfill, 
livestock, wastewater, and other relevant sectors; and to enhance 
opportunities for private- and public-sector partnerships to finance 
biogas systems. Two years after the establishment of the Task Force it 
will identify, collect, and analyze environmental, technical, and 
economic performance data relating to biogas systems, including the 
production of energy from biogas systems, co-products, greenhouse gas 
and other emissions, water quality benefits, and other data necessary 
to develop markets for biogas and biogas system co-products. The data 
will be made public.
    To date, this language has not been acted upon. We have been told 
by USDA Administration that unless the language is statutory or unless 
Congress provides additional funding to implement this provision that 
it will continue to be ignored.
Recommendations
    Implementation of the Biogas Opportunities Task Force will help 
drive research, collaboration, innovation, education, outreach and 
deployment of anaerobic digestion technologies. As the Biogas 
Opportunities Working Group recognized, these technologies help turn 
agricultural challenges into opportunities by converting manure and 
other agricultural wastes into renewable energy, nutrient-rich soil 
amendments, fertilizers, a renewable natural gas, and even feedstocks 
for renewable chemicals and bioplastics.\13\ We urge the Committee to 
support this language and work with the Agency to oversee its 
implementation.
---------------------------------------------------------------------------
    \13\ Biogas Opportunities Roadmap, Voluntary Actions to Reduce 
Methane Emissions and Increase Energy Independence, August 2014. 
https://www.energy.gov/sites/prod/files/2014/08/f18/
Biogas%20Opportunities%20Roadmap%208-1-14_0.pdf.
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Non-USDA/Non-Farm Bill Programs
    Renewable energy production plays a key role not just in 
agricultural policy, but also in energy, tax, and environmental policy. 
As a result, many of the Federal programs that support renewable energy 
production in general, and agriculture-based energy production in 
particular, are outside the purview of USDA and have origins outside of 
omnibus farm bill legislation. The Renewable Fuel Standard, for 
example, was established outside of farm bill legislation.
The Renewable Fuel Standard
    The RFS mandates an increasing volume of biofuels use and has its 
origins in the Energy Policy Act of 2005 (P.L. 109-58). The RFS was 
expanded in the Energy Independence and Security Act of 2007 (EISA; 
P.L. 110-140) and divided into four distinct, but nested, biofuel 
categories--total, advanced, cellulosic, and biodiesel--each with its 
own mandated volume. Biogas qualifies as both a cellulosic and advanced 
biofuel, depending on the feedstock. In fact, biogas makes up well over 
90% of the annual cellulosic volumes. Additionally, biogas from non-
cellulosic feedstocks such as food waste is a growing category. While 
not a USDA administered program, the RFS significantly impacts the on-
farm and rural economy because it can be a significant source of 
revenue to farms when administered properly by EPA. Additionally, USDA 
recommendations assist in the calculations of annual renewable fuel 
volume targets. When the RFS is being administrated well and running 
smoothly, it provides an additional stream of income that can help 
buffer the effects of on-going trade disputes or the impacts of bad 
weather. When the RFS is being administered poorly, it can add to the 
farmers and agricultural producers' woes.
Waivers
    We strongly argue that the continued abuse of the small refinery 
exemptions undermines the integrity of the RFS and is in direct 
contravention of the statute passed by Congress in 2007. We urge the 
EPA to limit the use of these waivers to only their intended purpose.
Biomass Derived Renewable Electricity
    When reauthorized and expanded through the Energy Independence and 
Security Act of 2007 (EISA; P.L. 110-140), Congress included 
electricity made from renewable biomass as part of the fuel mix in the 
RFS. One of the main goals of the RFS is to incentivize the development 
and deployment of new American produced biofuels, which will create 
energy independence and new markets for producers including the 
electricity produced from biomass.
    Furthermore, EPA included electricity derived from biogas in the 
Renewable Fuel Standard Program.\14\ Yet, while numerous applications 
to generate biogas derived electricity have been submitted, none have 
been approved. The EPA has yet to set up the processes necessary for 
producers to generate Renewable Identification Numbers (RINs). As 
shrinking markets and trade wars increasingly strap small farmers, the 
revenue that they should generate from the sale of these e-RINs may be 
the difference between shutting down and staying open.
---------------------------------------------------------------------------
    \14\ Approved Pathways for Renewable Fuel https://www.epa.gov/
renewable-fuel-standard-program/approved-pathways-renewable-fuel.
---------------------------------------------------------------------------
    Building electricity into the RFS is not a way to incentivize 
electric vehicles. One may only look to how the ethanol market works to 
understand. The producer of ethanol receives the RIN credit for fuel 
blended into the larger gasoline supply. This in no way encourages or 
discourages the use of traditional vehicles; it simply ensures the 
producer of biofuels gets the credit to which they are entitled under 
the RFS. The same applies to renewable electricity powering electric 
vehicles. Biofuels, such as the biogas produced from anaerobic 
digesters, are already being ``blended'' into the electricity supply 
but the producers of these biofuels are not able to receive the RINs 
credit. The use of the biogas, which consists of methane and carbon 
dioxide, as a fuel to generate renewable electricity helps improve our 
air quality, water quality, soil health, and the environment while 
mitigating the effects agricultural production has on our climate.
    Incorporating electricity into the RFS is also not a threat to 
ethanol producers. The majority of the fuel would be added to the 
cellulosic biofuel category (D3 RIN), which is separate from the 
ethanol market's D6 RIN.
Recommendations
    If Congress is looking for a way to help farmers during the time of 
trade wards, competing interests of the oil industry, and the effects 
of [COVID-19], supporting the RFS would be an ideal way of doing so. 
Ensure the integrity of the RFS by only granting waivers to those small 
refiners who truly qualify. We also ask Congress to uphold the letter 
and intent of the RFS by directing EPA to include renewable biomass 
derived electricity to the annual blending requirements. Agricultural 
producers should be allowed to participate in the RFS as Congress 
originally intended, and it would help producers stay afloat even with 
other uncertainties.
Tax Policy
    While Tax Policy is underneath the jurisdiction of the House Ways 
and Means Committee, it nevertheless affects on Farm Energy Production. 
Biogas produces firm, reliable baseload power that can be easily 
incorporated into existing energy infrastructure. Power from biogas and 
other baseload technologies is critical to the stability of the 
nation's electric grid, creates high-paying jobs, and helps the country 
meet its environmental and energy policy objectives.
    Biogas qualifies for the Section 45 Production Tax Credit (``PTC'') 
at a \1/2\ credit rate. The PTC lapsed on December 31, 2016. The 
Bipartisan Budget act retroactively extended the PTC for 2017 was 
expired for 2018 and 2019. In late December of 2019, this credit was 
extended retroactively in the FY 2020 Appropriations bills for 2018 and 
2019 and for 1 year in the future, 2020. The temporary nature of the 
incentive combined with the long project lead times have historically 
limited the efficacy and utilization of the incentive for biogas. The 
ability of other renewable technologies to readily utilize the PTC and 
the Section 48 Investment Tax Credit (``ITC'') while our technologies 
have effectively been denied similar tax treatment under current law 
has had the practical impact of putting this otherwise economically 
competitive technology at a distinct competitive disadvantage in the 
energy marketplace.
Recommendation
    To provide parity in tax policy and energy markets, technologies 
whose eligibility for the PTC and the ITC has been intermittent should 
be eligible for the same tax treatment that has been afforded other 
renewable energy technologies. We strongly urge this Committee to 
support the extension of the Production Tax Credit (PTC) ( 45 and 
48(a)(5)) for Renewable Electricity and the expansion of the Investment 
Tax Credit for Biogas 48 for biogas properties. Biogas property has 
been defined as property that converts biomass into a gas (which is at 
least 52% methane) for productive use. Electricity produced from 
property receiving an ITC under this provision is not also eligible for 
benefit under the PTC. We also ask that this Committee support the 
extension of the alternative fuel excise tax credit and the effort to 
provide an Elective Payment for energy property and electricity 
produced from certain renewable sources. These four tax policy 
recommendations were contained in the Moving Forward Act (H.R. 2), 
which was recently passed by the House.
House Select Committee on the Climate Crisis
    The House Select Committee on Climate Crisis recently released its 
Action Plan for a Clean Energy Economy and Healthy, Resilient, and Just 
America. This wide ranging forward looking plan outlines many policy 
priorities including many under the jurisdiction of this Committee. In 
general, the ABC is supportive of the recommendations contained within 
this report and believes that if implemented, we can transition our 
economy to a more sustainable model which values workers and forward-
thinking agricultural producers, advances sustainable environmental 
policies and goals, and is prepared to meet the challenges of the 
climate crisis.
Conclusion
    The production of On-Farm Energy is driven by numerous factors 
included among them is policy formulated by this Committee. Farm bill 
energy title programs have been incredibly successful in growing the 
on-farm and rural economy. Because of the research, loans, and grants 
provided by these programs, biogas and biotechnology companies are 
developing new technologies and feedstocks for the conversion of 
biomass for the production of renewable energy, advanced biofuels, 
renewable chemicals, renewable fertilizers and biobased products.
    The biogas industry is on the cusp of creating a robust biobased 
economy through U.S. biobased production, which strengthens rural and 
on-farm economies. Biogas systems encompass a value chain from 
agriculture through the manufacture of consumer goods that provides a 
cost-competitive alternative to petroleum's value chain and brings 
environmental, economic and other benefits.
    Encouraging growth of our industry provides new markets for farmers 
and agricultural producers, promotes innovation in domestic 
manufacturing and exports, and stimulates sustainable economic growth. 
In turn, because the inputs and technologies are domestically 
developed, this sector will boost the incomes of America's farmers, 
revitalize rural communities, create high-skilled jobs in the 
manufacturing sector, and provide sustainable employment.
    The ABC and the AgEnergy Coalition are ready to serve as a resource 
to the Committee and you continue to support On Farm Energy Production. 
Please do not hesitate to call on our organizations if we can be of 
service.

    The Chairman. Thank you very much, Mr. Sievers.
    And now, I recognize Mr. Will Harris, for 5 minutes, from 
Georgia.

STATEMENT OF WILL HARRIS, OWNER, WHITE OAK PASTURES, BLUFFTON, 
                               GA

    Mr. Harris. Chairman Scott, Ranking Member Scott, and 
Members of the Subcommittee, thank you for inviting me to be 
here today.
    White Oak Pastures is a 153 year old family farm that 
geographically surrounds our town of Bluffton, Georgia. It is a 
vertically integrated, multi-generational farm where we utilize 
multi-species rotational grazing practices, produce beef, pork, 
lamb, poultry, eggs, organic vegetables, and honey. The fourth, 
fifth, and sixth generation of the Harris family are currently 
living and working on the farm.
    There are three topics I want to cover with you today: 
regenerative farming as an economic driver; and as a tool to 
help mitigate climate change; and paired with renewable energy, 
to create more economic opportunities for rural America.
    First, as an economic driver. Every conscious American 
recognizes the decay that has occurred in rural communities 
over the last half century. Prior to World War II, most rural 
communities enjoyed a fairly consistent agrarian economy. But 
after the war, the centralization of our food processing system 
began, and new mega-plants, owned by large multinational 
companies started to starve out small, hometown, locally-owned 
processing businesses.
    When I was growing up in rural Georgia in the 1960s, every 
county had at least one family-owned slaughter plant. Today, 
almost every one of these is gone from our 159 county state. 
And this is a tragedy being replicated all across the United 
States.
    Regenerative farming at White Oak Pastures has revitalized 
the economy of our county, and it can do the same for other 
communities across the nation. White Oak Pastures is the 
largest private employer in our county. In the last 20 years, 
our farm has grown from four full-time employees and $1 million 
in annual revenue, to 155 full-time employees and $20 million 
in annual revenues. We write payroll checks for over $100,000 
every week, in a county that has fewer than 3,000 residents. 
The average salary of our employees is almost twice that of the 
average employee in the county. There could, and should, be a 
White Oak Pastures in every agricultural county in the United 
States. It is a highly replicable business model.
    Second topic is regenerative ag farming to mitigate climate 
change. This has been scientifically proven by the lifecycle 
assessment, and I provided the link to that in my written 
comments. White Oak Pastures may be the only farm in the world 
that has a peer-reviewed, third-party scientific study that 
verifies and validates that we sequester more carbon than we 
emit. We are a contributor to the mitigation of climate change.
    Our farm has sequestered over a ton of carbon per acre per 
year on 3,200 acres of land for the last 20 years. During this 
period of time, our farm has pulled the carbon equivalent of 
almost \1/2\ million barrels of crude oil out of our atmosphere 
and sequestered it in the soil. White Oak Pastures used a 
$50,000 USDA REAP Grant to construct a 50,000-watt solar array 
in 2010. It provides our farm with energy resilience and helps 
power our on-farm red meat and poultry slaughter plants, both 
of which are USDA-inspected.
    A couple of years ago, I learned that Silicon Ranch, one of 
the largest owner-operators of solar power plants in the 
country, would be building a solar array on over a thousand 
acres of land next to my farm. I invited my new neighbors to 
visit, and during the visit, we discussed the opportunity for a 
mutually beneficial partnership: I would use my livestock and 
regenerative farm practices to manage the vegetation on their 
solar farm. It worked. White Oak Pastures will be bringing 
regenerative land management to 2,400 acres of solar farmland 
in southwest Georgia. Twenty years from now, Silicon Ranch's 
land will have five percent organic matter, just like mine 
does. The White Oak Pastures-Silicon Ranch partnership model is 
replicable anywhere. It is win-win for the solar developers and 
farmers and rural communities.
    Adding regenerative cattle grazing to the model would 
greatly expand the opportunity. Integrating cattle grazing over 
these large-scale solar farms is not an option without more 
research and development.
    In partnership with the National Renewable Energy Lab, 
White Oak Pastures and Silicon Ranch have applied to work with 
the Department of Energy through a grant to construct a 
prototype on my land to power my slaughter facility. It will 
demonstrate cattle and solar compatibility.
    White Oak Pastures is honored to have been able to 
transform renewable energy into regenerative energy. I want to 
thank the Members of the House Agriculture Committee for giving 
me the opportunity to share our story today. It is a story of 
hope and innovation, and a story of how we can bring prosperity 
back to impoverished rural America. Thank you very much.
    [The prepared statement of Mr. Harris follows:]

Prepared Statement of Will Harris, Owner, White Oak Pastures, Bluffton, 
                                   GA
    Chairman Scott, Ranking Member Scott, and Members of the 
Subcommittee, thank you for inviting me to be here today--

    White Oak Pastures is a 153 year old radically traditional family 
farm that geographically surrounds the town of Bluffton, Georgia. It is 
a vertically integrated, multi-generational farm that uses the multi-
species rotational grazing practices of our forefathers to produce 
beef, pork, lamb, poultry, goat, eggs, organic vegetables, and honey. 
We have not used pesticides, chemical fertilizers, tillage, or GMO's in 
the last 20 years and we operate as a zero waste facility. The fourth, 
fifth, and sixth generation of the Harris family are currently living 
and working on the farm.
    There are three topics that I want to cover today that I hope you 
will consider to be important:

  1.  Regenerative Farming as an Economic Driver

  2.  Regenerative Farming as a Tool To Help Mitigate Climate Change

  3.  Regenerative Farming Paired With Renewable Energy To Create More 
            Economic Opportunities for Farmers and Rural America

    First, regenerative farming is an economic driver, proven as a 
workable business model in Bluffton, Georgia--

    Every conscious American has some level of recognition of the decay 
that has occurred in our rural communities in the last half century.
    Prior to World War II, most rural communities enjoyed a fairly 
constant agrarian economy.
    But after the war, the centralization of our food processing system 
began, and new mega-plants, owned by large multinational companies and 
operated with great ``economic efficiency'' started to starve out our 
small, hometown, locally-owned and operated processing businesses.
    When I was growing up in rural Georgia in the 1960s, every county 
had at least one family-owned abattoir [artisan slaughter plant]. 
Today, almost every single one is gone from our 159 county state. And 
this tragedy has been replicated across the rural United States.
    Regenerative farming at White Oak Pastures has revitalized the 
economy in our county, and it can do the same for other communities 
across this great nation.
    White Oak Pastures is the largest private employer in our county. 
In the last 20 years, our farm has grown from four full time employees, 
and a million dollars in annual revenue, to 155 full time employees, 
and twenty million dollars in annual revenues. We write payroll checks 
for over $100,000 each week, in a county that has fewer than 3000 
residents. The average salary of our employees is approximately twice 
that of the average salary in the county.
    There could, and should, be a White Oak Pastures in every 
agricultural county in the United States. Maybe two or three of them. 
It is a highly replicable business model.

    And now for the second topic I wish to share with you all today. 
regenerative farming helps to mitigate climate change, proven 
scientifically by the life cycle assessment that I have provided for 
you--

    https://blog.whiteoakpastures.com/hubfs/WOP-LCA-Quantis-
2019.pdf?hsCta
Tracking=6d515b16-e2ed-4bea-a286-a7433c983b81%7C7a0781f6-8e32-4e28-
89e9-563565ab2eea

    White Oak Pastures is likely the only farm in the world that has a 
peer reviewed, third-party scientific study that verifies and validates 
that we sequester more carbon than we emit. We are a contributor to the 
mitigation of climate change.
    The organic matter of our soil has increased from 0.5% to 5.0% over 
the last 2 decades. Each 1% of organic matter will absorb over 20,000 
gallons of water. Our 3,200 acres of land will absorb a 5" rain event. 
The neighboring farms can only absorb a \1/2\" rain event, which has 
enormous downstream impact.
    Our farm has sequestered over 1 ton of carbon per acre per year, on 
3,200 acres of land, for the last 20 years. During this period of time, 
our farm has pulled the carbon equivalent of about 500,000 barrels of 
crude oil out of our atmosphere.
    White Oak Pastures used a $50,000 USDA-REAP Grant to construct a 
50,000 kW solar array in 2010. It provides our farm with energy 
resilience and helps to power our on-farm red meat and poultry 
slaughter plants, both USDA-inspected.

    While this on-site solar array introduced us firsthand to the 
benefits of renewable energy, for my third topic I want to share how 
regenerative farming paired with renewable energy creates even more 
economic opportunities for rural America--

    A couple of years ago, I learned that Silicon Ranch, one of the 
largest owner-operators of solar power plants in the country and the 
leader in our state of Georgia, would be building a solar farm on over 
a thousand acres of land next to my operations. I liked solar, but I 
didn't like what it typically meant for the land it occupied--un-
natural, unhealthy monoculture--and dead dirt.
    I invited my new neighbors to visit. And during the visit, we 
discussed the opportunity for a mutually beneficial partnership: I 
could use my livestock and regenerative farming practices to manage the 
vegetation on Silicon Ranch's solar farm--a big operational challenge 
for them usually managed with mowing and spraying--and at the same time 
I could access more grazing land without additional investment and 
improve my bottom line.
    Following months of collaborative discussions, White Oak Pastures 
has formed a meaningful partnership with Silicon Ranch, and they have 
transformed their approach to managing the land under their arrays 
across the country.
    For our part, White Oak Pastures will be bringing regenerative land 
management to close to 2,400 acres of solar farm land in southwest 
Georgia. Twenty years from now, Silicon Ranch's land will have five 
percent organic matter like mine does and even more economic value per 
acre by layering clean energy generation, food production, and 
ecosystem services.
    The White Oak Pastures-Silicon Ranch partnership model is 
replicable anywhere willing farmers and solar energy intersect. Solar 
is a decentralized form of power generation that can support the 
decentralization of agriculture by providing regenerative farmers with 
finance-free access to land and a new source of income. The co-location 
of renewable energy generation and regenerative agricultural production 
is a win-win-win: for the solar developers, the farmers, and the 
community.
    And the replication process has already begun: Silicon Ranch has 
replicated this model in Mississippi, Tennessee, Arkansas, and 
Colorado, and will be implementing it in additional states in the 
coming years.
    To date, Silicon Ranch's co-location model has integrated 
regenerative sheep grazing, as well as pasture-raised poultry, on its 
solar farms. This innovation has created a unique and significant 
opportunity for farmers and rural America.
    Adding regenerative cattle grazing to the model would greatly 
expand this opportunity to even more farmers and communities because 
cattle are by far the most widely consumed ruminant in the country. 
Nearly \1/4\ of all land in the U.S. is dedicated to cattle grazing.
    Integrating cattle grazing on large-scale solar farms is not an 
option without new research and development due to current solar power 
plant design and limitations related to the financing of untested new 
designs.
    In partnership with the National Renewable Energy Lab and experts 
from three renowned academic research institutions, White Oak Pastures 
and Silicon Ranch have applied to work with the Department of Energy, 
through a grant from the Solar Energy Technologies Office, to custom 
build a 250kW Outdoor Test Lab on my land to power my USDA slaughter 
facility, and to demonstrate cattle and solar compatibility. If the DOE 
awards our grant application it would be yet another example of how 
targeted Federal programs can help support innovation and progress to 
advance the mission of our family farm.
    Moreover, if our Test Lab is successful, Silicon Ranch intends to 
scale and replicate this new model, the CattleTracker model, across the 
country, keeping even more land in ag production while supporting and 
leading the transition to clean energy.
    White Oak Pastures is honored to have helped Silicon Ranch 
transform ``renewable energy production'' into ``regenerative energy 
production'' and we look forward to expanding the positive impacts of 
energy projects through building a CattleTracker project on our farm.
    I want to thank the Members of the House Agricultur[e] Committee 
for giving me the opportunity to share our story today. It is indeed a 
story of hope and innovation, and it is a story of how we can bring 
prosperity back to impoverished rural America. Thank you.

Will Harris, Owner, White Oak Pastures.
                               Attachment
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]	

    The Chairman. Thank you, Mr. Harris. Let me just say that 
your testimony was very revealing, and I agree with you 100 
percent.
    Now, in your testimony you said so much, oh, I am sorry.
    Mr. Harris, you got me so excited about what you were 
saying that I skipped the script. Thank you, Mr. Harris, and 
thank you, Ranking Member, for pulling my coattail on that.
    I now recognize Dr. Mike McCloskey for 5 minutes.

    STATEMENT OF MICHAEL J. McCLOSKEY, D.V.M., FOUNDER AND 
           CHAIRMAN, FAIR OAKS FARMS; OWNER/PARTNER, 
     PRAIRIES EDGE DAIRY FARM; CHAIR, ENVIRONMENTAL ISSUES 
              COMMITTEE, NATIONAL MILK PRODUCERS 
                   FEDERATION, FAIR OAKS, IN

    Dr. McCloskey. Thank you, Mr. Chairman, and I want to thank 
also the Subcommittee Members for inviting us here today to be 
able to share with you our experience. Also, I would like to 
thank Congressman Baird for such a kind introduction today.
    Listening to the previous colleague speakers today, I don't 
want to dwell a lot on past projects. It is clear that a lot of 
us over the years have heavily invested, our capital, on 
renewable energies on our farms, because we believe that is the 
right thing to do. And as we have done those investments, I 
want to assure you, and I think you have heard that from the 
other speakers, that the technology now is at a level that it 
is reliable and trustworthy, and that is the first thing that I 
hope this Committee fully embraces.
    Therefore, our big challenge is how do we make it 
mainstream? How do we take what some of us who have scale who 
are able to take our capital and invest in and prove out these 
technologies, and now grow it for all industry?
    In the dairy industry, for example, we as an industry 
through our trade organization, through our check-off dollars, 
we have come together and made a commitment to a net zero 
industry by 2050. We have a challenge for us to take everything 
that we have learned, that we know we can do, and drive it into 
all of our farms industry-wide. Now, this commitment is a 
collective commitment. Not everyone will hit net zero. Some 
people will sequester, as one of my colleagues just presented, 
which I agree 100 percent with. A lot of us will be able to 
sequester and do better than net zero. Some will hit net zero 
and some may not get to net zero. But as a collective industry, 
we have committed in the dairy industry that we are going to go 
to net zero.
    Let me just take one big example that I believe that we can 
get there with your support, and some of this is truly outside 
of your jurisdiction. But it is your influence in Congress that 
can help create an atmosphere of investment in biogas, nutrient 
recovery, and clean water.
    Let me start with the two main issues that we need to 
resolve is the need for helping with the capital costs. 
Chairman Peterson said it very well a little while ago. We need 
to find ways to help with these capital costs so we can take 
this mainstream, but there have to be ways that over time, we 
get out of that. And I am 100 percent for that comment. Let me 
explain what I mean here. We have to have an environment where 
we support an ITC, or an investment tax credit, of 30 percent 
for this type of equipment that deals with biogas, nutrients, 
and clean water. And an ITC, the way that it works, is when an 
industry is right, to be able to move forward, it can really 
stimulate thousands of jobs and self-pay for itself. An ITC 
credit is really not a cost. It actually brings additional 
money into the Treasury by creating thousands of jobs and 
creating an industry. This industry today is right to receive 
an ITC of 30 percent. I hope Congress can consider that, and I 
encourage you to.
    I am not going to dwell a lot on USDA because my colleagues 
have expressed it very well. Through Rural Development, there 
are tremendous opportunities there, and also through NRCS. And 
the important thing there is to be able to stack these 
programs. We need to, and USDA has done a great job of that, 
but we still have states where we cannot stack different types 
of programs together to help medium size and small farmers 
participate. Those two things, an ITC and stacking, will be a 
tremendous help to be able to get small farmers, medium size 
farmers to be able to get capital to be able to invest in this 
technology.
    The second thing that we need is a reliable market, and my 
colleagues also expressed the issues about reliable markets 
that have fallen apart over the years, and great projects 
therefore have disappeared. And we need to have a reliable 
market. Well again here, we have an example where we already 
have a reliable market and we haven't put it to work well 
enough, and that is through our Renewable Fuel Standard that 
lies there at EPA. We have a pathway, the electric pathway, 
that we need to put to use. By 2030, there will be a total of 
20 million electric vehicles, including trucks, 18-wheeler 
trucks, on the road. And we can use this pathway, this 
electricity pathway through the RIN process and be able to 
subsidize the income of the electric produced to these farmers 
in a fantastic way. If you do a conversion of a RIN, the 
renewable identification numbers, if you do a conversion that 
we are getting in gas today, where we are selling gas into the 
low carbon fuel standards, if that 77,000 BTUs, if you convert 
that into electricity, which I have, by getting a RIN that can 
move an electrical vehicle that is already in place, that we 
are not using, it sits there at EPA. By getting that amount of 
money coming back to the electrical generation would be 
sufficient to be able to justify that investment that the 
farmer could make. And we could take this whole concept from 
just people like ourselves who have scale, we could take this 
to the mainstream U.S. farmers to be able to take advantage of 
it.
    I thank the Committee for listening to this. It is a simple 
future approach that we can have. By applying these two 
concepts, I believe we can get to more than 50 percent of our 
dairy industry commitment of a net zero by 2050. I believe we 
can be there by 2040, or even sooner if we can have support at 
this level.
    Thank you very much.
    [The prepared statement of Dr. McCloskey follows:]

    Prepared Statement of Michael J. McCloskey, D.V.M., Founder and 
  Chairman, Fair Oaks Farms; Owner/Partner, Prairies Edge Dairy Farm; 
    Chair, Environmental Issues Committee, National Milk Producers 
                       Federation, Fair Oaks, IN
    Chairman Scott, Ranking Member Scott, and Members of the 
Subcommittee, thank you for the opportunity to testify at today's 
hearing. My name is Mike McCloskey. Together with my partners, I milk 
over 15,000 cows in the great State of Indiana. Thanks to the many days 
I spent as a young boy accompanying my veterinarian uncle on farm 
visits, I learned to understand and appreciate the blessings that 
animals provide us. My love and fascination with animal agriculture 
culminated in a successful and respected dairy-centric veterinary 
practice in Southern California through the 1980s. Here, I partnered in 
my first dairy farm of 300 cows, and from there continued to grow while 
also founding the nation's sixth largest dairy cooperative, Select Milk 
Producers, and the dairy-based health and wellness brand, fairlife. I 
am also proud to serve as Chairman of the Environmental Issues 
Committee within the National Milk Producers Federation, which 
represents the nation's dairy farmers and the cooperatives they own.
    In 2002 we installed our farm's first digester, processing both our 
cows' manure along with local pre-consumer food waste into electricity 
that we use on our farms. In 2009, we built a second digester with the 
purpose of creating a renewable biogas to be used in transportation. 
Through key partnerships with Cummins, Kenworth, and the State of 
Indiana, and with the majority of funding coming from private 
investment, we pioneered the first commercial fleet of 42 tractor 
trailers running on renewable compressed natural gas from biogas, 
hauling milk from our farms to processing facilities up to 350 miles 
away. Every year since beginning the operations from that digester, we 
have displaced 2,000,000 gallons of diesel from having to be mined as 
fossil fuel.
    In 2019, as technology improved the cost and efficiency of 
anaerobic digesters, we replaced our first electricity-providing 
digester. The concept of remains the same: microorganisms in the 
digester break down the waste, thereby producing methane and carbon 
dioxide. However, now we power a 1-megawatt generator. This digester 
operates around the clock and provides enough electricity to power 
about 900 homes. Our digesters are integral to our farm's environmental 
and economic sustainability because they allow us to take both animal 
and pre-consumer food waste and turn it into an array of value-added 
products. In addition to defraying our energy costs and allowing us to 
earn tipping fees for accepting food waste, the digester also outputs 
Grade A compost, bedding for cows, and renewable fertilizer that we use 
on our cropland to grow feed.
    There are currently 254 digesters operating on livestock farms in 
the U.S., of which 204 are on dairy farms. When we installed our 
digester, there were significantly fewer in operation and far less 
shared knowledge about biogas generation among farmers, cooperatives, 
USDA, EPA, digester engineers, and energy companies to help get a 
digester project from concept to installation and profitability. In the 
interim, the dairy industry worked with USDA, DOE, and EPA to develop a 
Biogas Opportunities Roadmap, which has helped many more dairy farmers 
and the U.S. dairy industry work toward meeting the voluntary goal of 
reducing greenhouse gas (GHG) emissions from fluid milk by 25 percent 
by 2020. Biogas production is also critical to the Net Zero Initiative, 
a new industry-wide initiative to help the U.S. dairy sector reach the 
goal of carbon neutrality by 2050 while also optimizing our water use 
and improving water quality. Biogas is part of a larger systems 
approach to sustaining dairy farms, and it must be incentivized along 
with improving soil health, 4R practices for feed production, animal 
care, precision feed management, and manure management.
    Before going any further, I'd like to thank this Committee for the 
work you've done to incentivize biogas production on farms while urging 
you to continue helping dairy producers of all sizes to generate biogas 
and improve their environmental and economic sustainability. The Biogas 
Opportunities Roadmap estimates that over 8,000 potential livestock 
farms, of which 2,704 are dairy operations, could host a biogas system, 
producing 13.1 billion kWh per year, or enough to power 1,089,000 homes 
for a year. To meet this potential capacity, however, we must overcome 
a variety of financial and regulatory roadblocks. I will quickly 
outline the difficulties I encountered in installing my digesters as 
well as the challenges that persist for my fellow dairy farmers who 
want to install their own.
    The primary impediment to on-farm digester adoption is the lack of 
financial incentives available to farmers. I strongly believe that once 
the proper incentives are in place, digesters will be adopted 
throughout the industry. It is the proper role of government to help 
facilitate early adoption to the point that economies of scale develop, 
technologies advance, and capital costs drop. Our industry has been 
significantly impacted by the uncertain farm economy (even before 
COVID-19), and digesters, which inherently entail long-term planning 
and significant capital costs, are simply out of reach for most 
farmers. Dairy farmers strive to be part of the solution to the climate 
and water quality challenges facing U.S. agriculture, but our voluntary 
efforts can only go so far without the continued support of Congress, 
USDA, DOE, and EPA.
    For some reason, repurposing cow manure does not have the same 
shine as an array of solar panels or the grandeur of a wind farm on the 
horizon. USDA's own data show that from 2002-2019, the Department made 
631 investments in anaerobic digestion worth $198 million, compared to 
6,179 in solar worth $2.93 billion and 696 in wind worth $468 
million.\1\ USDA has provided more than ten times as much in grants, 
loans, loan guarantees, and payments for solar production than it has 
for anaerobic digestion.
---------------------------------------------------------------------------
    \1\ https://www.usda.gov/energy/maps/report.htm.
---------------------------------------------------------------------------
    To illustrate this disparity more concretely, consider the USDA 
Rural Development's (RD) Rural Energy for America Program (REAP), which 
provides important loan guarantees and grants for energy development. 
REAP has provided nearly $100 million to solar development, compared to 
only $36 million for anaerobic digestion. REAP prioritizes solar 
development over biogas by not properly accounting for anaerobic 
digestion's secondary benefits. Whereas anaerobic digestion provides 
several other environmental benefits--such as avoided methane 
emissions, mitigated odor and air pollution, and minimized nutrient 
loading--solar panels provide nothing other than clean energy. While 
wind and solar are important to the rural economy and America's energy 
transition, they do not offer a systems approach to agriculture's 
challenges the same way that anaerobic digestion does. And while the 
dairy sector is fully supportive of solar and wind development, biogas 
provides several additional income streams while addressing multiple 
resource concerns. It should be valued as such by USDA and other 
Federal agencies with a renewed focus on promoting the technology.
    USDA has made significant progress in implementing REAP to the 
benefit of anaerobic digestion by allowing stacking with the 
Environmental Quality Incentives Program (EQIP). In addition to the 
work on the Biogas Opportunities Roadmap, USDA's Natural Resource 
Conservation Service (NRCS) and RD came to an agreement allowing 
certain project costs to be covered by one program, with other costs 
covered by the other. However, in two of the top five dairy producing 
states, NRCS does not even offer the Anaerobic Digester (366) practice 
to producers through EQIP. This is just one example wherein producers 
would benefit from increased coordination among different agencies at 
different levels.
    To achieve the goals of the Net Zero Initiative, dairy farmers will 
not be able to rely on Federal funds alone. However, access to private 
capital to fund digesters has been limited. Federal funding, in the 
form of cost-sharing, research investments, and loan guarantees will 
remain critical to the expansion of the nation's biogas capacity, but 
Congress can also help by creating an environment that facilitates 
private capital investments into biogas. For instance, the bipartisan 
Agriculture Environmental Stewardship Act (H.R. 3744), which was 
introduced last year in both chambers of Congress, would create a 30 
percent investment tax credit (ITC) for biogas used as renewable gas in 
vehicles or as renewable heat as well as for manure resource recovery 
technologies. The Section 48 production credit for biogas for 
electricity expired at the end of 2019, and there have never been 
production credits for biogas for fertilizer. This investment tax 
credit is just one way to incentivize the expansion of on-farm biogas 
capacity, and just one piece of the puzzle to helping U.S. dairy reach 
net zero.
    Another way to encourage investment is to create certainty that a 
market for biogas will exist into the future. The first, and easiest, 
way to increase certainty around biogas returns is to encourage EPA to 
process the backlog of applications for the Electric Pathway under the 
Renewable [Fuel] Standard (RFS). Under the RFS, electricity produced 
with biogas is considered a renewable fuel when used for transportation 
purposes. Therefore, electricity used to power electric vehicles is 
eligible to generate and sell Renewable Identification Numbers (RINs) 
under the RFS. That is the essence of the RFS ``electric pathway'' and 
what have commonly been referred to as ``e-RINs.'' EPA finalized a rule 
for this pathway in 2014 but has processed no registrations to date. 
The electric pathway would allow agricultural digesters that are not 
near a natural gas pipeline to participate in the RFS by generating 
renewable electricity and putting those electrons onto the grid.
    A simple illustration shows the potential value that activating the 
electric pathway could generate for a farmer who is considering an 
investment in an anaerobic digester to generate renewable energy. 
Assume a standard vehicle with an internal combustion engine is driven 
25 miles per day and achieves 25 miles per gallon fuel efficiency. One 
gallon of gasoline consumed has the energy content of 115,000 BTUs. A 
RIN has a defined value of 77,000 BTUs, so substituting an electric 
vehicle would displace that 1 gallon of gasoline and thus would qualify 
for 1.5 RINs. The electric vehicle, driven the same 25 miles per day, 
would consume 8.5 kWh of electricity (equating to 0.34 kWh/mile). Using 
the current D3 (Cellulosic) RIN market pricing of $1.58/RIN, the 
incremental revenue associated with the RIN would equate to $0.28/kWh 
(1.5 RINs * $1.58 = $2.37 / 8.5 kWh = $0.28). This incremental revenue 
would need to cover the administrative costs associated with reporting 
and verification of the e-RINs, with the remaining value being split 
between the producer of the renewable energy (the farmer), the utility, 
and the electric vehicle supplier/consumer, depending on the project 
structure. A conservative estimate of 30 percent for administrative 
costs would result in $0.20/kWh net incremental benefit, which would 
be a sufficient incentive to attract additional investment in anaerobic 
digesters to produce renewable electricity.
    A practical illustration of how an electric pathway could be 
administered is fairly straightforward. A clearinghouse entity could be 
established to receive electricity production data from a utility on 
the daily production of kWh of renewable energy from designated 
projects. Note this would be similar to the existing process used for 
reporting Renewable Energy Credits (RECs). The clearinghouse would also 
receive telemetric data from electric vehicle manufacturers detailing 
daily miles driven and kWh's consumed by each registered vehicle, 
identified by vehicle identification number. The clearinghouse would 
then use the two sets of data to calculate the equivalent quantity of 
RINs generated and submit the required information to EPA. Once the 
approved RINs are provided by EPA, the clearinghouse would sell the 
RINs to an obligated party and distribute the revenue according to the 
agreed-upon methodology. The clearinghouse would be responsible for 
ensuring that all reporting and verification requirements of EPA are 
satisfied.
    Many digesters selling to the grid receive below-market rates for 
their electricity, and these payments alone cannot sustain the 
operation of a digester. To illustrate the potential impact of 
activating the electric pathway, assume 8,000,000 dairy cows could 
generate about 15 billion kWh's annually of renewable electricity. 
Assuming that all of this incremental electricity qualified under the 
electric pathway, the theoretical revenues from e-RINs would provide 
about $4 billion in annual incentives. It's important to note that the 
15 billion kWh's would equate to less than 0.5 percent of the total 
U.S. electricity market and power only about 25 percent of the 
projected 18,700,000 electric vehicles \2\ on the U.S. roads in 2030. 
Activating this electric pathway would serve as a market signal to 
producers, incentivizing them to expand biogas capacity. We appreciate 
the support that many in Congress, including on this Committee, have 
provided to efforts to resolve this issue.
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    \2\ https://www.eei.org/resourcesandmedia/newsroom/Pages/Press 
Releases/EEI Celebrates 1 Million Electric Vehicles on U-S- Roads.aspx.
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    Digesters are expensive, and such a large investment means we are 
in it for the long haul. As I, and others, look to pass our farms along 
to the next generation, we need more certainty that the digesters we 
decide to install today will remain viable for years to come. As an 
industry, we have made the long-term commitment to continuously improve 
until we reach net zero, and we hope that you will join us on that 
path.
    Biogas production is representative of the comprehensive systems 
approach we are taking on our farms to work toward a goal of net-zero 
emissions. A well-designed biogas system closes disconnected carbon and 
nutrient cycles on a dairy farm, all while offering producers an 
additional revenue stream. Manure is turned into electricity, bedding, 
fertilizer, and compost while methane and carbon emissions as well as 
nitrogen and phosphorus loading are reduced. The Net Zero Initiative is 
about each dairy farm--regardless of size, region, or production 
style--contributing what it can, where it can. No individual farm will 
be held to the Net Zero target, yet all will play a part. I, and my 
fellow dairy farmers, look forward to working with Congress, USDA, DOE, 
and EPA to further the environmental and economic sustainability of 
U.S. dairy.
    In closing, thank you for the opportunity to testify here today. I 
am happy to answer any questions Members of the Committee may have.

    The Chairman. And thank you, and now my turn.
    I tell you, this has really been so exciting to hear each 
of your presentations, and I am very excited about this 
project, as you can see, because I long have been advocating 
that it is the agricultural industry that can lead the way in 
terms of dealing with renewable fuels and our energy so and 
each of your testimonies have certainly explained that.
    Now, Mr. Harris, let me start with you because you gave 
some very profound statistics, some very meaningful 
information. You first of all said that, which is important, 
that every week, you inject into Georgia's economy over 
$100,000 in salaries with your employees, and then you made 
another statement that really shocked me in a way. You said 
that you were able to produce over \1/2\ million barrels of 
crude oil out of the air, if I am not mistaken. I think that is 
what you said.
    Both of those statements really hit it on the nail of how 
dynamic this whole issue is, and it rests in the hands of those 
of us in the agricultural industry.
    So, could you give us the top three or four things that we 
here in Congress can do to help you and the others who are 
literally pioneering in this effort? What is it that we in 
Congress need to do most that will help you?
    Mr. Harris. To be clear, the comment about the oil, we 
didn't produce oil. We sequestered that equivalent. We 
sequester about a barrel of oil a year per acre in carbon 
dioxide equivalent, and that is where that came from, just to 
be clear on that.
    The Chairman. But the issue, to me, is not the amount, but 
you were able to get it out of the air.
    Mr. Harris. Yes.
    The Chairman. Can you maybe explain that a bit?
    Mr. Harris. Yes, sir. Regenerative agriculture is about 
regenerating the cycles of nature. Cycles of nature are, to 
name a few, the carbon cycle, which is what we are talking 
about here, the mineral cycle, the energy cycle, the water 
cycle, the microbial cycle, all the cycles that produce an 
abundance in nature. That is how the oil got in the ground in 
the first place is all those cycles working well since the time 
of the dinosaurs, sequestering carbon, putting energy into the 
soil.
    Industrial farming practices breaks those cycles of nature. 
The use of cultivation, chemical fertilizers, pesticides all 
break those cycles that I mentioned and are disruptive. The 
abundance is not there in the amount that it had been prior to 
all those technologies.
    The Chairman. And now, if you could share with us--and I 
thank you for that explanation there. It is just profound.
    But, could you share with us in my time that I have left, 
what is it that you can tell us that we in Congress need to do 
to help you?
    Mr. Harris. First and foremost, I would say that a more 
careful look at how foods are labeled would be very helpful. I 
believe that there are intentional rules that mislead consumers 
in terms of product labeling. I think consumers really struggle 
to know what they are buying at the store.
    Second, to do what we have done here is highly replicable. 
It is not highly scalable. It won't operate in 20 states. It is 
highly replicable. There can be many of us. The limitation is 
financing. I was blessed in inheriting a nice farm, but I 
leveraged through common bank financing, small town bank 
financing. We borrowed $7.2 million, invested it in this 
processing facility. I think that is important because what has 
been done here was done by a proud ``C'' University of Georgia 
College of Agriculture student with bank financing, not a 
Rhodes Scholar with a trust fund. It is highly replicable, but 
access to financing, more truth in--through USDA--Mike can 
remember some more things. I did not anticipate that question.
    The Chairman. Thank you very much.
    And now I would like to recognize the Ranking Member, 
Austin Scott.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman, and I 
want to point one thing out that Mr. Harris said in his 
testimony. I am from the great State of Georgia, and we do have 
159 counties, and every county had at least one family-owned--
we don't like to call them this, but they are actually 
slaughterhouses. And when we talk about the environment, I 
think it is important to point out that today in Georgia--and 
Mr. Harris can correct me on this if he feels I am wrong. But, 
if you grow a hog in south Georgia, that hog is put on a truck. 
And many of those trucks haul those hogs all the way to Tar 
Heel, North Carolina before they are actually processed. And 
certainly, there is a tremendous amount of diesel that is 
burned by those semis that are hauling those trucks. And I 
think that as those small businesses shut down around the 
country, not only has it led to a damaging consolidation of the 
supply chain in our food supply, but it does force a tremendous 
amount of additional transportation costs because of that.
    One of the things that I do think that we could do that 
would be in the benefit of the country would be to help small 
food processors around the country so that we don't have to 
haul the products so far.
    The other thing I want to do is mention that, as I said, we 
can and should do a better job of taking care of the 
environment. I think that all of these gentlemen have done some 
extremely creative things, and I am proud of that. I do want to 
mention my concerns, again, with solar subsidies, and I do 
believe that when we see highly productive ag land, irrigated 
cropland coming out of production and going into solar fields, 
that that is an indication that perhaps the solar subsidies are 
too generous, and I do think that those solar fields have 
certainly a negative impact on the habitat that is so important 
for our wildlife and other things.
    I would like to ask to submit this to the record. This is 
from Bloomberg, and it is an article that says ``Bill Gates 
says wind and solar subsidies should go to something new, 
encouraging us to move to newer, more productive technology.''
    [The article referred to is located on p. 63.]
    Mr. Austin Scott of Georgia. With that said, gentlemen, I 
appreciate you being here and look forward to taking your 
solutions for the environment and expanding on them.
    I would note that all of the things that you have done and 
your efforts are voluntary, and I appreciate that, and I 
certainly support these practices remaining voluntary. But for 
each of the witnesses, would you just briefly tell us what was 
the reason you decided to take on the renewable energy projects 
on your farm, and what environmental concerns do you feel your 
particular project is helping to address?
    Mr. Sievers. Ranking Member Scott, this is Brian Sievers. I 
would be happy to go first, if that is okay.
    Mr. Austin Scott of Georgia. Yes, sir.
    Mr. Sievers. The driver behind the incentives that we 
looked for in creating our renewable energy projects really 
focused around a belief that our resources are natural, God-
given resources. The air, land, water, sun, and people are 
something that we need to find the highest and best use for in 
everything that we endeavor and strive to do, and that is why 
looking at renewable energy projects achieves that objective, 
and really, it helped fulfill maybe something that was more in 
our heart, as well as in our head.
    When you look at how can we protect our water, our soil, 
our air, we think renewable energy production on-farm is 
helping us to accomplish that. And if you look at some of the 
history of what we have done on our farms and the various 
conservation practices, why it is it just another way in which 
we can advance that set of objectives or goals for our farming 
operation.
    In terms of the environmental solutions that we found, 
really helping, and I joke sometimes with the falling energy 
prices that we have seen. The price of electricity that we now 
get for the electricity we sell to the grid is about 25 percent 
less today than it was when we signed our power purchase 
agreement back in 2012 with our power local service provider. 
We are suffering financially because of low commodity prices, 
if you will, for the energy we sell through electricity, but we 
still receive tremendous value from those natural soil 
amendments and soil products that we produce every day, 50,000 
to 60,000 gallons a day of natural fertilizers that we are able 
to use on our farms in our fields. And that is really the 
environmental solution that we found is that we don't have to 
purchase inorganic forms of fertilizer that is imported. In 
many cases, we can produce those right on our own farm.
    Dr. McCloskey was right, making sure we focus on ways to 
help incentivize the trends that we produce through these 
digesters and our biogas systems, but also if there is any way 
in which can be helped through this Committee, encourage the 
EPA to look at the e-RINs pathway, that would also be extremely 
helpful, too. And again, it would help address environmental 
challenges and climate challenges for all of these.
    Mr. Austin Scott of Georgia. Thank you, and I appreciate 
your answer. My time has expired, unfortunately. Maybe we will 
have time for a second round.
    Again, Mr. Chairman, I want to tell you, I think we can and 
we should do a better job of taking care of the environment. I 
do think that we have to keep in mind the habitat for the 
wildlife and the animals. And let me commit, again, to working 
with you. One of my primary concerns is that when something has 
proved not to work, is that we don't ever seem to be able to 
get rid of that. And while I would tell you, diesel particulate 
filters on our equipment have done a good job of reducing 
emissions, diesel exhaust fluid is something that has not, and 
that is just an example of something that we continue to 
effectively mandate with diesel exhaust fluid that there is 
little to no benefit from.
    The Chairman. Yes, and you have been doing outstanding work 
on this, Austin, and providing great leadership, so I look 
forward to working with you on this. This is a very exciting 
and dynamic area, and our farmers are doing such fantastic 
things, as we are witnessing here today.
    Now, I would like to recognize our Ranking Member of the 
full Committee, and our former Chairman of the full Agriculture 
Committee, my friend, Mike Conaway.
    Mr. Conaway. Thank you, Mr. Chairman. I appreciate that.
    Dr. McCloskey, thank you for being here today. As you know, 
I am an avid consumer of your chocolate milk, and when the 
COVID-19 happened and the supply chains across everything was 
disrupted, there is obviously no interest like self-interest. I 
was concerned that the chocolate milk would not be available, 
but your system worked wonders and I have not missed a day. And 
I also need to thank you for your running commentary with my 
good friend, Phil Fouche. I am forever indebted for that and 
for you doing it.
    When the COVID-19 issues happened and everything shut down, 
let's back up a second. Obviously, all of these operations are 
dependent on a normal business stream and normal operations, 
normal cash flows that you have in place in order to make it 
work. Can you visit with us a little bit about what happened to 
you and your system when the disruptions in the supply chain 
happened in March, April, and May, and how that affected your 
ability to maintain the sustainable and environmental 
stewardship programs that you had on your operations? Were 
those affected by that disruption?
    Dr. McCloskey. Thank you, Congressman.
    Yes, it was devastating like it was for everyone in the 
country. The problem of dumping, we had to dump milk on the 
farms. We couldn't collect all the milk at all the farms, and 
obviously the collapse on the whole pricing system because of 
the shift from food service. The shutdown of food service 
increased in retail, but not enough to offset the food service. 
There was a lot of disruptions from the marketplace resulting 
in unbelievably low prices. I mean, we saw numbers that were 50 
percent below previous incomes. And we all know that all of us 
farmers work on very thin margins, so when they take 50 percent 
out of your gross pay, it is devastating. And it was 
devastating for small producers, medium size producers, large 
producers on an equal basis, because it is all relative to the 
hundredweight of milk. There is some value in scale, as we all 
know, but in a situation as devastating as we all went through, 
that damage is felt all the way through. I don't care how big 
you are. I don't care what your efficiencies are. I believe 
that in those cases, all producers should be treated equal. We 
do accept within many of our programs in USDA that there should 
be help for smaller farms versus larger farms. There are some 
differences in how these programs work. There are some 
limitations these programs put on some larger farms. But I do 
not believe that in cases of disasters and devastations like we 
live, that that distinction should be made because I believe 
that all farmers suffered equally through this, and that all 
farmers should be helped in some way that is on an equal basis, 
equal footing.
    As far as our environmental efforts, Congressman, we 
continue them all, obviously at a tremendous expense. But, we 
always hope for a sunny day to come, and we kept on investing 
in everything we invest, and we are back up and running, but 
obviously with a big hole in our economic performance. And 
hopefully, we can make that up in the years to come.
    Thank you for asking.
    Mr. Conaway. Thank you. I appreciate that. I know you also 
run an agritourism program, and Fair Oaks as well had to be 
affected.
    Let me just make a comment about the e-RINs Program, and 
both of you have talked about how that would help.
    My concern is that simple shifts cost from one group to the 
other in a particularly convoluted way. I am not sure where 
that echo is coming from.
    The Chairman. Can we have one of our technicians sort that 
out.
    Mr. Conaway. Anyway, it sort of shifts the costs around in 
a very convoluted way.
    You mentioned having a lot of electric vehicles on the 
roads. We currently don't have a way for those electric 
vehicles to share their impact on our road system, and so 
finding a way to pass these extra electricity costs on to the 
folks who want to drive cars and those kinds of things might be 
a better solution than hiding it with the way the e-RINs 
Program works, and I am really concerned about how that would 
flow through. Because at some point in time, it has to get to a 
customer, and if we keep it opaque, it makes it difficult to 
figure that out. And so, having a more straightforward way to 
do that, as well as, as you all promote electric trucks and 
cars, you are going to have to be part of the conversation that 
says how do those vehicles share the costs of our roads and 
bridges the way that fossil fueled cars and trucks have 
currently been supporting that program.
    I appreciate all four of you being here today and your 
efforts to try to keep the environment clean. We all want to 
breathe clean air and drink clean water, and I share the 
Chairman and the Ranking Member's concerns in that regard, and 
thank you for your roles in trying to push forward good policy.
    With that, Mr. Chairman, I yield back.
    The Chairman. Thank you very much, Ranking Member.
    And now, I will recognize Mrs. Axne from Iowa.
    Mrs. Axne. Thank you, Chairman Scott, and thank you all for 
being here today and lending your expertise to the Committee.
    Bryan, it is always great to see an Iowan before us at the 
Committee, so thank you so much for joining us.
    I appreciate all the different success stories on the 
benefits of the farm energy programs, in particular, how it can 
result in positive climate outcomes while creating more 
economic opportunities for farmers. I have said this all along. 
We can be sustainable and we can grow economic viability at the 
same time. It is something I firmly believe we need to invest 
in and improve access to. We know how successful REAP or the 
Rural Energy for America Program has been, but also how 
oversubscribed it is with strong demand.
    Mr. Harris, I am pleased to hear that your business 
received a REAP solar grant that helped make your operation 
sustainable, so I have a couple of quick questions for you. 
Number one, how did you find the REAP process worked for you, 
and how was your solar array worked out? And then second, do 
you think the program should be expanded so that more folks 
like you around the country can deploy rural renewables like 
solar, wind, and biogas systems?
    Mr. Harris. Thank you for the question.
    The REAP grant worked very well for us. We received a lot 
of support from our USDA representative that hounded for us. He 
smoothed and fed us and it worked well. When I built that 
facility, it provided about 40 percent of the power for our 
slaughter plants. We have expanded them and so it is down to 
about 20 percent, and we are now applying for another grant 
through the Department of Energy which will allow us to build a 
prototype to use cattle under the array. We regenerate the 
soil, increase the carbon amount in the soil to sequester more 
carbon dioxide equivalent, as I mentioned earlier. It is a very 
important experiment.
    I would invite Mr. Scott to come and let me show you at 
White Oak Pastures here in Georgia that I disagree, we are not 
taking land out of agricultural production and putting it in 
solar energy production. We are using the same land for food 
production and energy production at the same time, and in doing 
so, we are putting more water into the soil, increasing the 
organic matter of the soil and carbon sequestered from the air. 
This experiment that we are working with to apply for the grant 
to build a new array on this farm to prove that it can further 
work to get maximum benefit from the cycles of nature.
    Mrs. Axne. Well, thank you so much for that.
    And Jim, I noticed that you were turned down for REAP, so I 
am curious to hear what your thoughts are of REAP, how you 
would use it, what you think it could do if it were to be 
funded to meet the demand? Can you hear me okay, Jim?
    The Chairman. He may have to unmute. Who was the question 
directed to? Mr. Falk?
    Mr. Falk. There we go.
    The Chairman. Oh, good.
    Mr. Falk. Sorry. I apologize. We are breaking up 
occasionally here with everything. The question was regarding 
us not receiving a REAP grant?
    Mrs. Axne. Right. I am curious to hear what your thoughts 
are if we did fund to the level of demand that we have. What do 
you think we would be looking like?
    Mr. Falk. I don't know what that level would be, but it 
would be significantly more than what it is because the amount 
of proposals that come in for this funding far exceed what is 
available.
    It is a good program, it is a good tool. Not every project 
needs to be funded, but there are projects that probably 
shouldn't be funded. I would say the majority of the projects 
that come in requesting a REAP grant have value, and 
unfortunately when you don't--we are not able to fund your 
project. We don't have enough funds to continue to fund 
projects at that level.
    Mrs. Axne. Thank you so much. I have so many other 
questions, but my time is up. I yield back.
    The Chairman. Thank you very much, Mrs. Axne.
    And now, we will recognize Congressman Johnson from the 
great State of South Dakota.
    Mr. Johnson. Thank you, Mr. Chairman, for the shoutout for 
the great state.
    I will ask two questions for each of the panelists, and for 
efficiency sake I will ask them both, and then you can each go 
through and give your answers. We will go Falk, Sievers, 
Harris, and McCloskey, so you kind of know where you are in the 
batting order.
    My question is, first, what kind of community response did 
you get to the investments you were making in these projects? 
Did people seem to understand them? Was there opposition? Were 
people generally supportive? And then the second question is 
what are you hearing with your colleagues in the ag industry? 
Does it seem as though there is more interest in people making 
investments like this? Obviously, policy plays a big role, but 
if they got the right kind of economic and policy environment, 
how much more projects like yours do you think we would see 
from your colleagues?
    With those two questions in mind, let's go ahead and look 
to Mr. Falk first.
    Mr. Falk. [inaudible] interest in doing renewable energy 
on-site, but of course as the traffic of seed producers and 
growers and a number of folks that--and everyone has questions 
about is it viable? And so, there is a tremendous interest, and 
I have had nothing but positive feedback about it.
    I would make sure we have good access so that if we want a 
project [inaudible] operation and a partnership with the 
providing energy, so they have a role to play as a partner as 
well.
    Mr. Johnson. I think you are done, Mr. Falk. I heard a 
little break-up there, but thank you for your answers.
    How about Mr. Sievers?
    Mr. Sievers. Thank you, Congressman. In Iowa, we 
participate in a protocol when it comes to siting livestock 
facilities like what we constructed, along with our renewable 
energy facility that allowed public input through what is 
called the Master Matrix Scoring process where the Department 
of Natural Resources oversees the siting of a facility like 
ours, and it allows for local or public input through the 
county level. And so, we went through a discussion with all of 
our neighbors. We voluntarily went to our neighbors, talked 
about what we were wanting to do, got very good feedback, 
positive feedback by and large, and we got a chance to meet 
with our county board of supervisors, lay out our proposal, and 
subsequently they recommended that we be able to move forward 
to the Iowa Department of Natural Resources with our project. 
So, by and large, the community response we received has been 
positive.
    With regard to the second question you raised and how our 
colleagues in our industry are responding to the opportunities 
to look at additional anaerobic digestion and biogas 
facilities, we do see several projects starting to move forward 
in Iowa. The opportunities are tremendous. In Iowa, we 
currently have three on-farm anaerobic digesters. They all 
utilize beef cattle manure as well as some offsite co-feeds in 
their digesters. And our land mass in the State of Iowa is 
pretty comparable to Germany, and in Germany, there are 9,000 
digesters. The opportunities are tremendous for us to be able 
to grow and develop and utilize many of these organic waste 
streams in our anaerobic digester facilities. I don't expect to 
ever see that many facilities, but certainly more than three, 
is what we are going to hopefully look forward to here in the 
State of Iowa, and I do think we are going to continue to see 
more, especially with regard to livestock operations, 
especially dairy farms. We would like also to see equitably 
treated manure sources when it comes to scoring these 
facilities in programs like California's Low Carbon Fuel 
Standard. We think beef cattle manure, swine manure, dairy 
manure, all should be treated equitably when it comes to the 
scoring in those regulatory approaches, and that would help 
provide some incentives as well for beef cattle producers to 
also expand and develop more digester projects.
    Mr. Johnson. Thanks very much, and we will just need to go 
to Mr. Harris. You have about 30 seconds, and sorry, Dr. 
McCloskey, we ran short on time.
    Mr. Harris?
    Mr. Harris. Today, we built a store. We renovated the 
courthouse and the Methodist church, the offices, built a 
restaurant. We have lodging, we have tourism. Bluffton, Georgia 
did not have a single new housing starting from 1972 until 
2015. Since then, we built or renovated a dozen houses in 
Bluffton. So, it is well-received.
    The question about colleagues embracing a different sort of 
farming, I will tell you that industrial commodities, 
centralized agriculture, it has not been good for our land or 
our rural communities or most of our farmers. And I believe 
that movement will be consumer-driven. But if consumers know 
the truth about their food, they will offer a market and 
entrepreneurial farmers will step up.
    Thank you for your question.
    Mr. Johnson. Thank you very much. Thank you, Mr. Chairman, 
for your indulgence, and I yield back.
    The Chairman. Thank you very much, Mr. Johnson, and now I 
would like to recognize my friend, Ms. Spanberger of Virginia.
    Ms. Spanberger. Thank you very much, Mr. Chairman, for 
hosting this Committee hearing. I appreciate that we are having 
this hearing today. If we are going to effectively combat the 
climate crisis, farmers and producers have to be part of that 
solution.
    Dr. McCloskey, if you will indulge me, my colleague, Mr. 
Johnson from South Dakota was on a train of questioning which I 
found to be very interesting. I know he ran out of time, but I 
would like to begin with using my time to give you the 
opportunity to answer his question, which was about how did 
your community respond, and then how did your colleagues and 
counterparts respond to--well, I will defer to you, Dr. 
McCloskey.
    Dr. McCloskey. Thank you, Congresswoman. I appreciate that.
    Yes, so the response was overwhelmingly positive. The nice 
thing about digesters and our farms is we do produce renewable 
energy, but besides that, it produces so many other things 
beyond solar or wind or other sources would produce in 
renewable energy.
    We get the renewable energy, but we also are in the 
beginning of a process of nutrient recovery of clean water, so 
that is really important to state because through that nutrient 
recovery, we are helping our Clean Water Act and avoiding the 
serious issue of eutrophication in our waterways and our base. 
And on top of that, on a local basis, it mitigates about 80 to 
90 percent of the odor on a farm, and so it is a great help in 
your fly control for neighbors as well. So, it is very, very 
well-accepted. You get so much in one package versus some other 
alternatives that I just--there has been a lot of investment in 
solar, a lot of support for wind. I don't feel digesters have 
received that same level of support that produces energy 24/7. 
It is a constant source. If the sun is not shining or the wind 
isn't blowing, we are still producing energy and we are doing 
so many other great things at the farm level by producing these 
great fertilizers that now can be handled in a much better way 
by creating clean water, by eliminating odor, and other smaller 
issues like fly control, which is a not small issue to a close 
by neighbor, believe me. So, it has been very, very well-
accepted.
    And as far as other colleagues wanting to do the same, I 
have a visiting center at Fair Oaks. We have over 200,000 
visitors a year that tour the farms and see the digester. A lot 
of them are dairy farmers, and I get to interact with them. 
They would embrace this immediately if the financial situation 
was such. Again, we have the advantage of scale. Scale has been 
very beneficial for us. We have invested because of scale. It 
is a duty that we have, we believe, and we have to give back. 
And therefore, we believe that regenerative farming, 
sustainable farming, these digesters and these investments in 
how we are farming is incredibly important. But not everyone 
can afford them. If people look at this, they really wish they 
could do it. My point today is we need to help with the capital 
investment, ITC is something that is investment of the 
government. It actually grows the Treasury because this 
industry is ripe to explode. Thousands and thousands and 
thousands of jobs will be created. Industries will grow, and 
there will be an incredible amount of manufacturing.
    I will tell you that in the dairy alone, based on the 
proposal that I shared a little while ago, I would see no less 
than 5,000 digesters created nationwide, and I wouldn't be 
afraid to say that thousands more than that. But I will 
conservatively tell you that if we had an ITC credit, if we 
could use stacking properly from USDA, and if we had a secure 
market through e-RINs, that this thing would explode for us, 
and we would see digesters dotted all over our country. It 
would help tremendously local farmers, local communities. These 
digesters can take--besides another advantage of digesters that 
I didn't mention is that we can take in substrates, so other 
materials, organic materials, be it food waste or others, that 
we can bring into the digesters and actually double the amount 
of energy. I have done that on my digesters. You can double the 
amount of energy that we are producing by bringing in this food 
waste, and so you can become a community disposal for other 
waste within your area.
    Ms. Spanberger. Dr. McCloskey, I am very, very glad that I 
spent my time following up on Mr. Johnson's question.
    I was planning to ask about REAP and a variety of other 
things, but I have found this to be fascinating. You have 
provided us, all four of you, with your answers to his 
questions, good feedback, and I am grateful.
    Thank you to the Chairman for indulging me in going over, 
and again, to the witnesses, thank you for being here. Thank 
you for all that you do on your farms, and thank you for 
helping to educate Members of Congress and the public in your 
work.
    Thank you.
    The Chairman. And thank you.
    And now, Mr. Baird, the gentleman from Indiana.
    Mr. Baird. Dr. McCloskey is from Indiana, and my district.
    Anyway, my question deals, Dr. McCloskey, you did not 
mention the facilities that you have also have an educational 
aspect. It is interesting to watch those children come to your 
place from urban and suburban areas and see a calf born for the 
first time. The educational benefits of your facility are also 
important.
    But, my question deals with this: Mike, do you feel that 
multiple farms could participate in a single digester? And I am 
going to tie----
    The Chairman. Excuse me. Someone needs to mute, please. 
Thank you.
    Mr. Baird. Anyway, the question I have is, Mike, whether or 
not several farms could participate in a single digester?
    Dr. McCloskey. Yes, thank you, Congressman.
    Absolutely. Actually, we have three separate farms that all 
of the manure ends up on one single very large digester. We 
have many models. If I work with the industry through several 
of our trade organizations and businesses that we put together, 
we have several models where we go into areas that have smaller 
dairies, and we can then bring in manure from several dairies 
that have proximity. You need to stay with some level of 
proximity. I would say, within 10 miles you could create 
clusters of digesters that could work very well. Once you get a 
little further out than that, you have to be innovative of how 
you can do that. It still can be done, but you can be 
innovative. There is great opportunity in that as well is to be 
able to aggregate several farms if they are close enough to do 
a digester.
    Mr. Baird. Do you feel there are any barriers or 
regulations to being able to do that?
    Dr. McCloskey. No, I don't necessarily. There would be more 
a local type of regulation of moving manure in the proper 
vehicles and moving that manure down the road, but that would 
be more of a local. I have not encountered ourselves any 
regulations in Indiana. Matter of fact, they are very 
supportive of our efforts with all of our manure management in 
Indiana. Nothing that comes to my mind, Congressman.
    Mr. Baird. Thank you very much, and we really appreciate 
you being here.
    Mr. Sievers, do you have any thoughts?
    The Chairman. Mr. Sievers, you may want to unmute.
    Mr. Sievers. Yes, thank you. I am sorry about that.
    The barriers that you bring up, that is a very good point. 
Because of the financial challenges of selling electricity into 
a market that is very, very competitive against solar and wind, 
we have investigated and evaluated production of renewable 
natural gas from our digesters.
    One of the barriers that we have encountered is we would 
like to even possibly transport biogas that is partially 
cleaned and compressed not to the level that renewable natural 
gas is typically compressed to a hub, if you will, that can 
take that gas, finish the clean up and compression so that it 
can be injected into a pipeline. And that is what we are 
looking at here in Iowa is what is called a hub and spoke 
approach, where you have an interconnect into a pipeline at, 
say, a large landfill facility, for example, and then several 
livestock operations in that region or neighborhood could pipe 
or transport their biogas, partially cleaned, to a facility for 
final clean up. As I understand, there may be some regulatory 
hurdles with transportation of that type of, I don't want to 
call it raw biogas, because it is partially cleaned and 
compressed, but it is not fully cleaned and compressed 
renewable natural gas either. So, that would be one area we 
probably would want to look into to make sure that there are no 
regulatory hurdles with that if the technology is available for 
us to be able to do that. And that is one the things we are 
evaluating.
    Mr. Baird. Thank you very much, and I appreciate all the 
witnesses being here today.
    My time is up, and I yield back, Mr. Chairman.
    The Chairman. Thank you very much, Congressman Baird.
    Now we will hear from the distinguished Congresswoman from 
Minnesota, my friend Ms. Craig.
    Ms. Craig. Thank you so much, Mr. Chairman. It is a real 
honor to be on your Subcommittee. It is also a pleasure to have 
Mr. Falk here today representing Minnesota's Farmers Union, an 
organization that I am proud to be a member of. I am a strong 
supporter of the Rural Energy for America Program, and I was 
proud to lead our efforts in the House to call for increased 
appropriations, and I am pleased the proposed full year 2021 ag 
appropriations bill provides a loan level of $20 million for 
the Rural Energy for America Program, an increased level, and 
an appropriation of $476,000 for the loan subsidy.
    However, as Mr. Falk mentioned in his testimony, his farm's 
REAP grants were unsuccessful because the nationwide demand far 
outweighs the funding availability. I will continue to be a 
champion to increase this funding. Minnesota has long been a 
leader in the REAP Program, so Mr. Chairman, I appreciate that 
we are taking time to work on the energy title today. These 
farm bill energy title programs are prime examples of farmers 
being part of the solution to our changing climate.
    Mr. Falk, as we begin to move into recovering from COVID-
19, producers are looking for ways to increase on-farm income. 
How have you seen renewable energy increase your bottom line, 
and do you see it as a worthwhile investment for producers? 
What are the most effective incentives Congress can continue to 
provide? Mr. Falk?
    Mr. Falk. You are going to have to repeat part of that. We 
were breaking up. I apologize.
    Ms. Craig. No, no, that is fine. Mr. Falk, if we move 
toward recovering from COVID-19, we are looking for ways to 
increase on-farm income. How have you seen renewable energy 
increase your bottom line, and do you see it as a worthwhile 
investment for producers? What are the most effective 
incentives that Congress can continue to provide?
    Mr. Falk, are you with us?
    The Chairman. Mr. Falk, you may have to unmute.
    Mr. Falk. I locked up, but I think I am understanding your 
question is what would be the benefits, or what do we need to 
do to enhance these programs? And the tax incentives are still 
an extremely important component. We have had an on and off 
system through the years, and industry needs to be able to be 
reliant that there are [inaudible] government if they are going 
to be investing in an industry. And then the REAP grants, 
obviously, were under-funded and I appreciate [inaudible].
    Ms. Craig. Well, as we all lock up today, I also want to 
mention that I do support $100 billion investment in high-speed 
internet across our nation.
    Mr. Falk, if you can hear me, I am also interested in how 
you think we can support biofuels and biobased manufacturer 
sector in order to create a value-added market for commodities 
and increase domestic manufacturing?
    Mr. Falk. Well, all these tools are important to combat 
climate change for our rural economy, and the price of corn was 
$2.75 locally here last night when I looked, and [inaudible] 
impact to our farmers on--with these low commodity prices. And 
any time we can add value, and it is [inaudible].
    Ms. Craig. Mr. Falk, thank you so much. I really appreciate 
you being here and very proud of the State of Minnesota and the 
work that we are doing.
    With that, Mr. Chairman, I yield back.
    The Chairman. Thank you very much.
    And now I would like to recognize our Ranking Member, for 
any closing remarks that you may have.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. I 
just--did I hear Mr. Falk say correctly, I have not heard this, 
that the price of corn locally for him was $2.75? Is that the 
number he quoted? Wow.
    Mr. Chairman, one is I think that this is an extremely 
important issue, not just for agriculture, but for the country. 
I want to commend the families that have been represented here 
today for their work and what they have done and their 
environmental stewardship. I, again, want to commit to you to 
work with you. I believe that we can and we should do a better 
job of taking care of the environment.
    And before I turn it back over to you, I do want to mention 
this. What Mr. Falk said with the price of corn and where 
commodity prices are right now, if commodity prices across this 
country stay where they are, regardless of what we do with the 
ability to reduce energy prices on the farm, there is not a 
farmer in this country that can survive with corn around $3 a 
bushel. It is not possible for our ag communities to survive 
with the commodity prices where they are in this country. I am 
very concerned with, as we have another COVID-19 package come 
forward, assuming that we are able to get to an agreement on a 
COVID-19 package, I do believe--and while I don't believe this 
is a long-term solution for our farmers, in fact, I will tell 
you I know it is not a long-term solution for our farmers. But 
I do think that any additional COVID package needs to have a 
fully-funded round of Market Facilitation Payments, in addition 
to the other funds that are being discussed for our rural 
communities. Of the $4 trillion that the United States through 
Congress and through the Fed have currently spent, less than 
\1/2\ of 1 percent of that has gone to our agricultural 
producers in this country. And let me just say, any additional 
COVID-19 relief has to show the respect to the agricultural 
producers in this country that they deserve, and the value that 
they bring to our national security through our food security.
    And with that, Mr. Chairman, I will turn it over to you, 
but I want to thank the witnesses for being here.
    The Chairman. Well, I want to thank you for your comments, 
and I want you to know I absolutely agree with you. We have to 
do much more to elevate our farmers up at the top of the spear, 
the lead point in the spear. And I have been telling people. I 
mean, we need to make sure that our farmers have the financial 
support to maintain through this situation. We definitely need 
to make them a major part of the next COVID-19 funding package, 
and I will be there with you on the floor fighting for this.
    Folks, as I keep telling people, food is our most important 
entity, and our farmers are the captains of the ship. But not 
only that, we have the energy in the name of our Committee, 
Commodity Exchanges, Energy, and Credit. That means our 
Committee, Ranking Member, we are the engine to move this and 
the first order of business is for us to move to start getting 
this financial package together so we can start advocating it 
right now. And I am sure I am speaking to staff. We need to be 
the ones that lift up our farmers, given this pandemic.
    Now, I have heard a lot about e-RINs. We need to make sure 
that is alive and well. Our good friend, Mr. Harris, from down 
in Georgia, when I asked him what he felt was the most 
important thing, he said food labeling. A simple thing that can 
happen. We need to make sure we take care of that. And getting 
the type of financial backing to our farmers who are really out 
there working in a pioneering way with renewable fuels.
    And you mentioned another thing when we talked with a few 
other people about the impending--when we had the possible food 
shortages, the meat shortages, because of the processors, our 
processing plants, Tyson and Smithfield, all went down because 
of this and we had to move. There is so much out there, and we 
need to be the Committee, and we are, as long as I am Chairman, 
as long as you are Ranking Member, or if it goes the other way 
and you become Chairman and I am Ranking Member, you can 
believe that the Scott brothers, me and you, we are going to 
make sure that our farmers are getting the financial respect 
that they need and deserve, and that we make sure we lift them 
up.
    So, I want everyone to know how much we really appreciate 
it. This was excellent testimony. I learned a lot today, and we 
are going to carry this on and build on this, and our number 
one priority, I think you and I agree, is to get a COVID-19 
package ready for the next tranche that we have, and we have to 
start on that right now. And Ashley, I know you are capable of 
carrying that mission out. We have a great staff. I want to 
thank you also for putting this together, our very first 
hybrid. It looks like we may be doing this for quite a while, 
and I have to get better. I got to get me a mask that will keep 
up. But we will do it, simple things like that.
    And now, under the Rules of the Committee, the record of 
today's hearing will remain open for 10 calendar days to 
receive additional material and supplementary written responses 
from the witnesses to any questions posed by a Member.
    This hearing of the Subcommittee of Commodity Exchanges, 
Energy, and Credit is adjourned. Thank you all very much.
    [Whereupon, at 11:51 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Submitted Article by Hon. Austin Scott, a Representative in Congress 
                              from Georgia
[https://www.bloomberg.com/news/articles/2019-09-17/bill-gates-says-
wind-solar-subsidies-should-go-to-something-new]


Climate Changed
Bill Gates Says Wind, Solar Subsidies Should Go to Something New
By Chris Martin (https://www.bloomberg.com/authors/ABooutJPfdo/chris-
martin) and Erik Schatzker (https://www.bloomberg.com/authors/
AB7kAcfmyqc/erik-schatzker)
September 17, 2019, 12:01 AM EDT


          Gates says more subsidies should go to renewable energy 
        storage and offshore wind.
          Editor's note: the video is retained in Committee file and 
        available at: https://www.bloomberg.com/news/videos/2019-09-17/
        bill-gates-calls-for-more-subsidies-for-energy-storage-
        offshore-wind-video.

    It's time wind and solar passed their subsidies along to emerging 
technologies that need them more, Microsoft Corp. co-founder Bill Gates 
says.
    After decades of government incentives, wind and solar have been 
deployed widely enough (https://www.bloomberg.com/news/articles/2019-
06-18/the-world-will-get-half-its-power-from-wind-and-solar-by-2050) 
for manufacturers and developers to become increasingly efficient and 
drive down costs. Now they can probably survive without them, Gates 
said in an interview with Bloomberg Television.
    ``The tax benefits there should be shifted into things that are 
more limiting, like energy storage, offshore wind--which still has a 
huge premium price,'' said Gates, who co-chairs a global group (https:/
/gca.org/global-commission-on-adaptation/our-mission) of business, 
political and scientific leaders formed in 2018 to push for investments 
to help the world adapt to climate change.
    U.S. states including New York, New Jersey and Massachusetts see 
proposed offshore wind farms in the Atlantic Ocean as crucial 
ingredients to phase out fossil fuels and fight climate change. But the 
costs of building wind farms at sea are still nearly twice as high as 
on land. Energy storage, meanwhile, is key to allowing wind and solar 
plants to dispatch power even when the sun sets and breezes go slack. 
But big batteries remain expensive, too.
    ``The progress in solar and wind is very helpful,'' Gates said. 
``But the sun doesn't shine 24 hours a day.''
                                 ______
                                 
   Submitted Statement by Hon. Anthony Brindisi, a Representative in 
     Congress from New York; on Behalf of Dairy Farmers of America
    Dairy Farmers of America (DFA) appreciates the opportunity to 
comment on the impacts on farm income and rural communities as a result 
of on-farm energy production. In 2009, we formed DFA Energy 
(www.dfaenergy.com), an entity created to assist DFA member-owners as 
they navigate the complex field of on-farm energy conservation and 
production. Since then, DFA has been invested in and promoting the 
opportunity for on-farm energy production to member farms as a way to 
diversify their income, address environmental issues and become more 
energy independent.
    DFA is the country's largest milk marketing cooperative, owned and 
governed by 13,000 dairy farmers nationwide. DFA's member-owners are 
invested in 87 processing facilities that produce a wide range of dairy 
products, including fluid milk, cheese, butter, ice cream and dairy 
ingredients.
    Dairy farmers raise their families and their herds on the same 
land. As thoughtful stewards of the land, they understand the value of 
protecting and improving the resources on their farm to ensure future 
generations have the opportunity to pursue the same profession. As 
renewable energy alternatives have emerged and grown in the 
marketplace, DFA has encouraged its members to consider options that 
will both strengthen family farm finances and improve the environment.
    The utilities that have provided electricity to farmers, and 
society more generally, have traditionally relied on fossil fuel-based 
generation. Most electricity consumers have had few, if any, 
alternatives. The growth of renewable energy alternatives has created 
an opportunity for consumers to choose the source of the energy they 
consume.
    When interested in learning more about energy opportunities on the 
farm, DFA Energy encourages dairy farmers to begin with an energy 
audit. Energy audits are partially reimbursable through the U.S. 
Department of Agriculture's Environmental Quality Incentive Program 
(EQIP). The audit creates a necessary baseline of analysis: how much 
energy does the farm use? What machinery does the energy power? What is 
the energy efficiency of this machinery? How can the farm operation 
save money while increasing its efficiency? The audit helps farmers to 
think more intentionally about their energy consumption. It also 
outlines potential opportunities for energy production alternatives as 
a source of cost reduction and income diversification.
    A DFA member-farm in Massachusetts is a great example of how 
agriculture can play a role in the creation of renewable energy. The 
family began considering on-site energy production as a way to 
diversify and grow their revenue. In 2012, the farm's energy audit 
provided an analysis of its electricity usage on the 250-cow dairy and 
determined that a 55-kW roof-mounted solar project could save the farm 
$24,000 per year in electricity costs. In 2013, that same farming 
operation leased 11 acres of marginal farmland to a solar development 
company for a project that has generated $61,500 in income per year.
    Massachusetts' state solar policy has been one of the most 
progressive in the country; so, in 2016, this farm added 145 kW of 
solar panels on a building it owned. The operation sold the power at 
reduced rates to a nearby restaurant and was able to benefit from Solar 
Renewable Energy Certificates. This project has generated this farm 
family $20,000 annually. Now comfortable with the technology, the farm 
invested in a 16-kW system at a small camp site the family owns next to 
a local pond in 2017. This investment saves them $4,500 annually. Their 
effort continued in 2019, when they entered into a 7 acre lease for 
solar development, again on marginal farmland, which generates $27,000 
in annual lease revenue. Most recently, this operation has entered into 
lease options for energy storage projects that are still being 
developed. If the economic benefits of these projects are summed, solar 
electricity represents a significant net economic gain of $137,000 per 
year for this dairy farm family.
    This farm's owners have raised three children, now adults. Knowing 
that land was limited in their area, they knew they had to identify 
creative ways to grow farm income so their children would have 
opportunities to return to the operation to raise their families on the 
farm as well. This farm and the next generation have a robust future. 
They are excited about the opportunities that have been created for 
them and hope to expand into more energy storage and anaerobic 
digestion. The farm continues to produce nutritious milk as it seeks to 
expand its production of renewable energy.
    On-farm energy production is size neutral. The Massachusetts farm 
would be considered a small- to mid-sized operation, based on herd 
size. Larger farms can also benefit from on-farm energy production. DFA 
Energy has helped farms of all sizes realize their potential for energy 
production through solar, wind and anaerobic digestion, which often 
adds the benefit of odor mitigation and quality fertilizer as a by-
product.
    It is important to note that as farms consider their options in the 
renewable energy field, projects have more success and more impact if 
state and Federal policy and incentives work together to support the 
project's development. Again, Massachusetts has prioritized renewable 
energy development, which has led to benefits on the farm and to 
consumers. More consideration of supportive policy and infrastructure 
will be needed to allow farmers nationwide to benefit from this 
emerging field.
    DFA Energy has worked diligently to identify partners to service 
the diverse renewable energy needs of DFA member-farms. We seek 
partners that are experts in the field, that understand the complexity 
and priorities of dairy farms, and that will help farms solve problems 
and meet their business goals. While there are many credible companies 
in this field, DFA Energy has a trusted, preferred partnership with 
Jordan Energy & Food Enterprises, a solar development company that 
specializes in developing solar projects on farms. DFA Energy has a 
similar relationship with Vanguard Renewables to promote and develop 
anaerobic digester projects. The business model for anaerobic 
digest[e]rs on farms is diverse. In projects with Vanguard, the company 
oversees operating the digester, using the manure from the farmer's 
herd as a feedstock. DFA dairy farmers who pursue these projects supply 
the manure and also benefit from a lease payment for the land on which 
the anaerobic digester sits. Vanguard then converts the manure into 
usable gas. Vanguard and Jordan Energy have even begun conversations 
relative to using the solar-generated electricity to supply the 
anaerobic digesters' needs. In those cases, DFA member-farms can gain 
benefit through development of both on-farm solar generation and 
anaerobic digesters.
    DFA's commitment to renewable energy extends beyond the farm. We 
have been reviewing potential opportunities at our milk processing 
operations as well. For example, DFA and Jordan Energy & Food have 
entered into a Power Purchase Agreement at DFA's Middlebury Center, 
Pa., facility. This agreement will result in our DFA plant having 
access to a renewable source of energy to process milk into dairy 
products for consumer consumption.
    As DFA looks to the future of dairy farming, we believe it is 
critical that we continue to provide farmers with opportunities for new 
revenue streams. We believe there is great opportunity for all of rural 
America in the continued development of on-farm renewable energy 
generation. The impact to rural communities, to rural economies, can be 
great and continued investment should be prioritized and supported.
    DFA appreciates the opportunity to provide these comments. On-farm 
energy production should be promoted and supported through state and 
Federal policy that encourages farmers to investigate and pursue 
opportunities in this field as they continue producing nutritious and 
wholesome dairy products each and every day.
                                 ______
                                 
                          Submitted Questions
Questions Submitted by Hon. Stacey E. Plaskett, a Delegate in Congress 
        from Virgin Islands
Response by Jim Falk, President, Falk's Seed Farm, Inc.; Co-Owner, Falk 
        Farm; on Behalf of Minnesota Farmers Union, National Farmers 
        Union
    Question 1. Thank you Chairman Scott for recognizing me and thank 
you to the witnesses for sharing their experiences and best practices.
    In 2012, the National Renewable Energy Laboratory did a site-
specific evaluation and analysis on wind power opportunities in the 
U.S. Virgin Islands. The report concluded that St. Croix's geography 
and access to trade winds may in some respects be the most viable place 
for utility-scale wind generation.* This would contribute to our goal 
of reducing fossil energy consumption by 60% by 2025. But, of course 
any project of this magnitude would require new investments across 
various sectors.
---------------------------------------------------------------------------
    * Editor's note: the report referred to is retained in Committee 
file and is available at https://www.nrel.gov/docs/fy12osti/55415.pdf.
---------------------------------------------------------------------------
    You shared how a hybrid wind and solar system, especially the solar 
system, has been a great investment that has produced significant 
benefits. What would say is the main impediments in keeping farmers or 
stakeholders from investing in renewable systems?
    Answer. The significant up-front cost of installing a renewable 
energy system is an impediment to a lot of farmers and ranchers. The 
installation of a renewable energy system is a long-term investment, 
projected to provide power for 20 years or longer. Tax incentives and 
USDA's Rural Energy for America Program grants have helped stimulate 
activity in the past. However, there has not been enough funding for 
REAP grants to satisfy the demand of people applying with qualifying 
projects. Many farmers and ranchers do not have the cash needed to 
proceed with a project without knowing they will receive the REAP 
grant. In addition, lenders are often skeptical of funding these 
projects, not knowing if the grant will come through for their 
customer. On farm renewable energy systems are the most efficient use 
of power, when the energy produced is used directly on site, or in the 
neighborhood through the local grid. That's why extended tax credits 
for small wind and solar, along with more funding for REAP grants, are 
so important to advance on farm renewable energy systems. On farm 
renewable energy systems benefit the farmer or rancher, the local 
electric distribution provider, and society in general in many ways, 
including the offset of peak demand on the grid, locally and 
nationwide. The on again/off again roller coaster approach to tax 
incentives and REAP grant funding is negative to the small wind and 
solar industry as they try to plan for demand in an uncertain market. 
Therefore, some consistency, for an extended period of time, is 
critical to advance this important energy policy of producing energy on 
the farm where it is consumed. In addition, more research is needed to 
integrate better and more efficient systems going forward, utilizing 
the latest cutting-edge technologies.
    Another impediment can be the lack of access to the local grid to 
install a renewable energy system, or the cost associated with fees 
charged by the electric distribution provider to allow the farmer or 
rancher to connect to the local grid with a renewable energy system. In 
many situations, the rural electric co-op or electric distribution 
provider is charging the farmer or rancher a monthly fee for installing 
a renewable energy system to offset their loss of revenue from that 
farmer or rancher, who is now buying less power from the electric 
distribution provider. This is an extremely negative development in my 
opinion, as we try to address climate change, resolve peaking issues on 
the local and national grid, and move to more efficient energy use by 
producing power where we use it. If the fees charged to connect a 
renewable energy system to the local grid are too high, the system will 
not be profitable enough to be viable in the eyes of a lender. In 
general, many electric energy providers incentivize their consumers to 
purchase LED lighting, or more efficient motors, or off-peak heating/
cooling systems with rebates to use less electricity. Isn't it odd that 
farmers and ranchers should be charged a fee, much like a penalty, for 
reducing their energy demand with a renewable energy system? It seems 
hypocritical to me, that farmers and ranchers are charged a fee for 
actually helping mitigate the cost of peak demand by offsetting some of 
the need for the electric energy providers to buy the more expensive 
peak power to satisfy their local energy demand. Our goal should be to 
make it easier, not harder, to advance these mutually beneficial energy 
systems.

    Question 2. The Virgin Islands largely produces food in sustainable 
systems that rely little on off-farm inputs. On average, off-farm 
income accounts for over 90% of farm operator household income in the 
United States. It would be ideal for farmers across the country to rely 
mostly on their on-farm income.
    What risk would you consider in deciding to add on-farm energy 
production to your operation and how do you manage those risks?
    Answer. There are a number of risks that need consideration before 
installing a renewable energy system. We addressed the risk of not 
receiving the grant funding or not having tax incentives in your first 
question. In our situation, we decided we wanted to reduce our carbon 
footprint and that because of our power needs, we would proceed with 
our wind and solar projects even though we did not receive the REAP 
grant for either project. We also decided to proceed with both because 
the level of tax incentive was projected to be declining, and that was 
something we could count on, after not receiving the REAP grant. You 
can see how important both of these tools are to advance the 
installation of more on farm systems. Our business is well established, 
and we expect to be continuing for many years, knowing that our 
electric power needs are quite significant annually. Therefore, we felt 
we could take the risk of installing both systems and we would 
eventually be able to pay for them. Other operations might not have 
such a consistent use of power annually and struggle to justify 
proceeding with an install if they don't have both the REAP grant and 
some tax incentive going forward. Repair and maintenance is a risk for 
any system. Working with a reliable company that can provide 
professional maintenance services is important over the projected life 
of the system.
Response by Hon. Bryan J. Sievers, Owner, Sievers Family Farms; Chief 
        Operating Officer, AgriReNew; Vice Chair, Board of Directors, 
        America Biogas Council
    Question 1. In 2012, the National Renewable Energy Laboratory did a 
site-specific evaluation and analysis on wind power opportunities in 
the U.S. Virgin Islands. The report concluded that St. Croix's 
geography and access to trade winds may in some respects be the most 
viable place for utility-scale wind generation.* This would contribute 
to our goal of reducing fossil energy consumption by 60% by 2025. But, 
of course any project of this magnitude would require new investments 
across various sectors.
---------------------------------------------------------------------------
    * Editor's note: the report referred to is retained in Committee 
file and is available at https://www.nrel.gov/docs/fy12osti/55415.pdf.
---------------------------------------------------------------------------
    You shared that for every dollar of Federal assistance you 
received, you were able to secure almost an additional $5 in private 
investments. Do you think your experience is typical? What advice would 
you offer to farmers seeking investment on renewable energy?
    Answer. For those anaerobic digester (AD) facilities that were 
built after the passage of the American Recovery and Reinvestment Act 
of 2009 I do believe our experience is typical. Because of this 
important piece of legislation, we were able to leverage this 
assistance, along with other government programs, such as USDA's REAP 
and EQIP programs into an additional approximately $9 million in 
private investment to finance the construction of our facilities. 
Without this assistance we would not have been able to construct our AD 
facility and would not have been economically viable.
    My advice to others who are seeking investment opportunities in 
anaerobic digestion and renewable energy facilities is to do your 
homework and make sure your motives go beyond economic incentives. Our 
family has always pursued the objective to ensure that the natural 
resources we are blessed with (air, land, water, sun, and the people we 
work with) are used for the highest and best use. We have always 
focused on how we can provide solutions for the land we farm which will 
ensure a more resilient, healthy resource for future generations to 
produce, food, fuel, feed, fiber, and energy.

    Question 2. The Virgin Islands largely produces food in sustainable 
systems that rely little on off-farm inputs. On average, off-farm 
income accounts for over 90% of farm operator household income in the 
United States. It would be ideal for farmers across the country to rely 
mostly on their on-farm income.
    What risk would you consider in deciding to add on-farm energy 
production to your operation and how do you manage those risks?
    Answer. There are a number of risks and challenges that must be 
considered such as management capabilities, labor resources, private 
and outside capital availability, liquidity, grants, renewable energy 
incentives, availability of feedstock for the anaerobic digesters, 
management of output from the anaerobic digesters, whether to take off-
site feedstocks, and how are off-site feedstocks handled once they 
arrive. Finally, the biggest risks revolve around the economic 
viability of the on-farm renewable energy facility. Not only is the 
price the producer receives for the renewable energy produced (biogas, 
renewable natural gas, renewable electricity, renewable thermal energy, 
and digestate produced from the digesters are all potential revenue 
streams from the energy and material produced) an important 
consideration but making sure you maximize uptime and minimize 
downtime. The American Biogas Council is tremendous resource that 
should be utilized that will help anyone interested in researching and 
developing an an[a]erobic digester facility. The operators of these 
facilities, along with the engineers, technicians, consultants, 
management firms, private equity investment groups, and many others can 
provide significant resources and help to those interested in pursuing 
an an[a]erobic digester project. The one thing that none of these 
organizations or resources cannot provide is the drive or passion for 
doing the right thing with our natural resources for the protection, 
preservation, and enhancement of our environment. As long as the drive 
or desire is present, however, there will be significant resources 
available to manage the risks involved with designing, developing, 
engineering, constructing, and operating an on-farm anaerobic digester 
facility.

                                  [all]