Delta Farm Press Logo

Biofuels: loan guarantees and production projects

U.S. government provides nearly $650 million in loan guarantees for biofuel refinery construction.Projects in the Southeast to receive $405 million in loan guarantees.USDA pushing non-corn biofuel production through the Bioenergy Program for Advanced Biofuels

David Bennett 1, Associate Editor

January 27, 2011

5 Min Read

Last October, Agriculture Secretary Tom Vilsack announced a strong package of programs and incentives for the U.S. biofuels industry. Vilsack said the Obama administration was pursuing such a course not only to alleviate dependence on foreign oil but as a way to revivify U.S. flyover country.

During a Jan. 20 press conference, Vilsack was back to the biofuels topic, pointing to Obama administration efforts to make good on earlier promises. President Obama will surely play up the same during his coming State of the Union address.

“Building an active biofuels and biomass industry in every region of the country will help to create jobs and provide economic opportunity for people who live in rural communities,” said Vilsack in a prepared statement. “The Obama administration knows these investments will benefit all of America because renewable energy provides the opportunity for a cleaner environment and greater energy security for our country.”

For more, see Obama administration makes massive biofuel push

With the biofuel industry unhappy with banks’ tight lending, Vilsack said the federal government would provide four companies $645 million in loan guarantees to jumpstart the building of fuel-producing facilities.

The Southeast will benefit from an additional $405 million in loan guarantees provided to biofuel projects in Alabama, Florida, and Mississippi(where Pontotoc’s Enerkem Corp. will receive an $80 million loan guarantee to build a refinery capable of producing 10 million gallons of advanced biofuel).

Trying to goose production of biofuels not derived from corn, Vilsack said the Obama administration is also making use of the Bioenergy Program for Advanced Biofuels (BPAB).

“Under the program, payments are based on the amount of advanced biofuels a recipient produces from renewable biomass, other than corn kernel starch,” says a USDA release. “Eligible examples include biofuels derived from cellulose, crop residue, animal, food and yard waste material, biogas (landfill and sewage waste treatment gas), vegetable oil and animal fat.”

Among BPAB recipients in the South:

• Greenlight Biofuels, LLC; $13,211.40

• Futurefuel Chemical Company; $384,227.34
• Pinnacle Biofuels, Inc.; $14,165.71

• Agri-Source Fuels, LLC; $5,009.97
• G2 Energy, LLC; $1,518.14
• Bio Fuel Consultants of North America; $1,413.92

• Nittany Biodiesel; $138,905.11
• U.S. Biofuels Inc.; $74,906.71

• Owensboro Gran Company, LLC; $401,187.10
• Griffin Industries, Inc.; $12,186.11

• Paseo Cargill Energy, LLC; $406,424.07
• Mid-America Biofuels, LLC; $379,513.20
• Abengoa Bioenergy Corporation; $213,891.03
• Prairie Pride, Inc.; $94,305.08
• Show Me Energy Cooperative; $31,376.12
• Natural Biodiesel Plant; LLC: $18,978.80
• Global Fuels;  LLC; $9,696.39

• Scott Petroleum Corporation; $74,894.29

North Carolina
• Triangle Biofuels Industries, Inc.; $6,452.38
• Piedmont Biofuels Industrial, LLC; $5,437.92
• Blue Ridge Biofuels, LLC; $3,992.71
• North American Bio-Energies; $2,926.64

• Sunsoil, LLC; $1,982.92

• White Energy, Inc.; $1,022,026.02
• Green Earth Fuels Of Houston; $509,386.90
• Levelland/Hockley County Ethanol, LLC; $304,897.19
• RBF Port Neches, LLC; $99,993.77
• Beacon Energy (Texas) Corporation; $48,984.17
• Double Diamond Energy, Inc.; $6,144.39
• New Energy Fuels, LLC; $3,825.80


As biofuel production ramps up, one persistent question has been how to get it to consumers along with the logistics and expense of fitting gas stations to handle the fuel. During the press conference, Vilsack was asked about funding blender-pump infrastructure in 2011/2012.

“The USDA has been working with the (U.S. Department of Energy) to encourage states with resources under the Recovery Act to assist at the state level blender-pump and distribution system assistance,” said Vilsack. “We know a handful of states have accepted that challenge in using some of the resources still available to them under the Energy Grant.

“In addition … we think the blender-pumps are important to making sure we not only increase demand for this product but make the supply convenient.

“We know Congress will be discussing, over the next 12 months, the tax incentives currently in place … that have been providing help to this maturing industry. There may be a debate about whether, or not, incentives currently being provided can be directed in a different, more beneficial direction, given where the industry is and where it needs to go.”

Does Vilsack expect Congress will fund the Biomass Crop Assistance Program (BCAP)?

“The tremendous reaction to the BCAP program by producers across the country – and the fact we were able to make, literally, hundreds of awards … in a variety of feedstock opportunities … suggests this is a program that is important, popular and may be necessary in the short-run to get this industry in a place where we work out the inefficiencies and devise supply chains that make sense.

“I think if Congress learns of the success (of BCAP), they’ll understand the necessity for adequate financing. We obviously live in an environment of constrained resources.

“There are no sacred cows and there shouldn’t be. But I believe this program will still have congressional support and we’ll use it as an important tool in connection with biorefinery systems, in connection with tax policy, in connection with EPA’s recent efforts in allowing E-15 for vehicles from 2007 and later. All of this combined creates momentum, interest and enthusiasm for this and we’re seeing it reflected in increased market share of renewable energy and fuel sources in terms of total energy production in the country.”

Critics of the government’s biofuels approach continue to fret over what it means for corn prices. Ethanol is at least partially responsible for feed prices that impact livestock and dairy operations.

“I want to say I have tremendous confidence in the capacity of American agriculture to meet any challenge,” said Vilsack. “It’s met those challenges over the past several decades when we’ve seen a remarkable increase in productivity…

“Corn prices are very strong today and there are a multitude of reasons for that. Obviously, we’re keeping an eye on that as it relates to the ability of our livestock and dairy producers to be profitable. We want a balance in agriculture.”

Vilsack was keen to point out that in the latest projects corn isn’t the biofuel feedstock.

“To be clear, these announcements are about feedstocks other than corn. … This industry can’t be just Midwest-based or (based) even on one commodity. It really has the potential and opportunity to be in every part of the country using whatever resource is most plentiful in that part of the country. Over time, that should take some of the pressure off of corn.

“And we may learn how to use other parts of the corn crop that don’t jeopardize our capacity in the future to meet feed, fiber or food needs.”

[email protected]

About the Author(s)

David Bennett 1

Associate Editor, Delta Farm Press

David Bennett, associate editor for Delta Farm Press, is an Arkansan. He worked with a daily newspaper before joining Farm Press in 1994. Bennett writes about legislative and crop related issues in the Mid-South states.

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like