Meeting the Renewable Fuel Standard (RFS) Mandate for Cellulosic Biofuels: Questions and Answers - R41106

Kelsi Bracmort
Specialist in Agricultural Conservation and Natural Resources Policy

The Renewable Fuel Standard (RFS) was expanded under the Energy Independence and Security Act of 2007 (EISA; P.L. 110-140) in an effort to reduce dependence on foreign oil, promote biofuel use, and stabilize transportation fuel prices, among other goals. Over 15 years, the RFS requires that increasing amounts of biofuels—36 billion gallons by 2022—be used in transportation fuel. The mandate is to be accomplished in part with advanced biofuels, including cellulosic biofuels—fuels produced from cellulosic materials including grasses, trees, and agricultural and municipal wastes—which would increase over time to comprise some 44% of the RFS in 2022.

The U.S. Environmental Protection Agency (EPA) is required to set the annual standard for cellulosic biofuels under the RFS for the following year by November 30. If projected cellulosic biofuel production is less than the volume specified in the statute, EPA can lower the cellulosic biofuels standard. EPA concluded that the nation lacked sufficient production capacity to meet the RFS cellulosic biofuels mandate for 2010, 2011, 2012, 2013, and 2014. EPA reduced the mandate for 2010 (from 100 million gallons to 5 million gallons actual volume), 2011 (from 250 million gallons to 6.6 million gallons), 2012 (from 500 million gallons to 8.65 million gallons, later vacated by a federal court decision and reduced to zero), and 2013 (from 1 billion gallons to 4 million gallons). EPA proposes to lower the 2014 mandate from 1.75 billion gallons to 17 million ethanol-equivalent gallons, and to rescind the 2011 cellulosic biofuel standard.

The 2010-2012 reduced mandates were not met by actual cellulosic biofuel production, which EPA reports was limited. Instead, these mandates were largely met with waiver credits. EPA reports that the cellulosic biofuels industry is growing incrementally, noting that two commercialscale cellulosic biofuel facilities began fuel production in 2013, although it is unlikely that enough fuel will be supplied to meet the mandate.

The cellulosic biofuels industry may be able to produce enough fuel to meet the RFS mandates if certain obstacles are overcome: lowering the cost of conversion technology at the initial stages of commercial application, easing access to financing, removing feedstock supply uncertainties, and creating certainty for tax incentives. Another challenge for the cellulosic biofuels industry—and all biofuels industries—is the petroleum industry’s opposition to the RFS overall, in part because it views the RFS as unworkable. Other industries—livestock and poultry producers in particular—have joined the petroleum industry in requesting that the RFS be modified, in many cases for reasons unrelated to cellulosic biofuel supply. Another supply constraint is the blend wall—the upper limit to the total amount of ethanol that by law can be blended into U.S. gasoline.

Several federal programs assist the cellulosic biofuels industry, including the U.S. Department of Agriculture’s (USDA’s) Biorefinery Assistance Program and Biomass Crop Assistance Program, and the U.S. Department of Energy’s (DOE’s) Loan Guarantee Program. EPA reports that some of the cellulosic biofuel companies identified in its 2014 proposed rule received or were offered significant federal financial support (approximately $387 million) in the form of grants and loan guarantees from USDA and DOE.

Many questions about cellulosic biofuels and the RFS have arisen. Can the RFS mandate for cellulosic biofuels be met? If so, when would it be met? What impact will the continued lowering of the cellulosic biofuels mandate by EPA have on investment in production? Should Congress continue to provide support for cellulosic biofuels, and if so, how? Might Congress statutorily increase the number of qualified feedstocks for the RFS cellulosic biofuels category, given the 112th Congress amendment of the definition of cellulosic biofuels to include algae for some tax incentives? What impact will other legislative discussions (e.g., military support for biofuels) have on the RFS cellulosic biofuels mandate?

This report, in a question and answer format, discusses some challenges facing the cellulosic biofuels community, including feedstock supply estimates, and potential legislative options to address cellulosic biofuels production uncertainty for the RFS.


Date of Report: December 9, 2013
Number of Pages: 22
Order Number: R41106
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Wildfire Fuels and Fuel Reduction - R40811

Kelsi Bracmort
Specialist in Agricultural Conservation and Natural Resources Policy

Severe wildfires have been burning more acres and more structures in recent years. Some assert that climate change is at least partly to blame; others claim that the increasing number of homes in and near the forest (the wildland-urban interface) is a major cause. However, most observers agree that wildfire suppression and historic land management practices have led to unnaturally high accumulations of biomass in many forests, particularly in the intermountain West. While high-intensity conflagrations (wildfires that burn the forest canopy) occur naturally in some ecosystems (called crown-fire or stand-replacement fire ecosystems), abnormally high biomass levels can lead to conflagrations in ecosystems when such crown fires were rare (called frequentsurface- fire ecosystems). Thus, many propose activities to reduce forest biomass fuels.

The characteristics of forest biomass fuels affect the nature, spread, and intensity of the fire. Fuel moisture content is critical, but is generally a function of weather patterns over hours, days, and weeks. Fuel size is also important—fine and small fuels (e.g., needles, grasses, leaves, small twigs) are key to fire spread, while larger fuels (e.g., twigs larger than pencil-diameter, branches, and logs) contribute primarily to fire intensity; both are important to minimizing fire damages. Fuel distribution can also affect damages. Relatively continuous fuels improve burning, and vertically continuous fuels—fuel ladders—can lead a surface fire into the canopy, causing a conflagration. Total fuel accumulations (fuel loads) also contribute to fire intensity and damage. Thus, activities that alter biomass fuels—reducing total loads, reducing small fuels, reducing large fuels, and eliminating fuel ladders—can help reduce wildfire severity and damages.

Several tools can be used to reduce forest biomass fuels. Prescribed burning is the deliberate use of fire in specific areas under specified conditions. It is the only tool that can eliminate fine fuels, but is risky because it burns any fuel available. Wildland fire use is the term used for allowing a wildfire to be used like a prescribed burn (i.e., within specified areas and conditions). Thinning is a broader forestry tool useful for eliminating fuel ladders and total fuels in the crown, but it does not eliminate fine fuels, and it concentrates fuels in a more continuous array on the surface. The combination of thinning with prescribed burning is often proposed to combine the benefits, but it also combines the cost of both. Logging does little to reduce fuel loads.

The federal land management agencies undertake all of these activities under general authorities for wildfire protection and land and resource management. Fuel reduction, primarily via prescribed burning, is funded with direct annual appropriations for wildfire management. Other activities, particularly thinning, are funded through other annual appropriations accounts, such as vegetation management. Also, several mandatory spending accounts provide funds for related activities, such as treating logging and thinning debris. In addition, wildfire assistance funding allows the Forest Service to provide technical and financial aid for reducing forest biomass fuel loads on nonfederal lands, among other things.

The issues for Congress include the appropriate level of funding for prescribed burning and thinning for fuel reduction and the appropriate reporting of accomplishments. Current reporting does not identify ecosystems being treated and the effectiveness of the treatments. Similarly, current appropriations and reporting do not distinguish thinning for fuel reduction from thinning for other purposes, such as enhancing timber productivity. More complete reporting could allow Congress to better target its appropriations for fuel reduction to enhance wildfire protection.

Date of Report: December 17, 2013
Number of Pages: 18
Order Number: R40811
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Agricultural Disaster Assistance - RS21212

Dennis A. Shields
Specialist in Agricultural Policy

The U.S. Department of Agriculture (USDA) offers several permanently authorized programs to help farmers recover financially from a natural disaster, including federal crop insurance, the Noninsured Crop Disaster Assistance Program (NAP), and emergency disaster loans. The federal crop insurance program is designed to protect crop producers from unavoidable risks associated with adverse weather, and weather-related plant diseases and insect infestations. Producers who grow a crop that is currently ineligible for crop insurance may be eligible for a payment under NAP. Under the emergency disaster (EM) loan program, when a county has been declared a disaster area by either the President or the Secretary of Agriculture, agricultural producers in that county may become eligible for low-interest loans.

In order to provide a regular supplement to crop insurance and NAP payments and to assist livestock producers who are generally not covered by these programs, the Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) included authorization and funding for five new disaster programs to cover losses from weather events, beginning with 2008 crops and ending September 30, 2011.

The 2008 farm bill programs were designed to address the ad hoc nature of disaster assistance provided to producers during the last two decades. The largest of the now-expired programs under the 2008 farm bill is the Supplemental Revenue Assistance Payments Program (SURE), which is designed to compensate eligible producers for a portion of crop losses that are not eligible for an indemnity payment under the crop insurance program. The 2008 farm bill also authorized the Tree Assistance Program (TAP), under which eligible orchardists and nursery growers can receive a payment to cover 70% of the cost of replanting trees or nursery stock following a natural disaster, and three livestock assistance programs. These are (1) the Livestock Indemnity Program (LIP), which compensates ranchers at a rate of 75% of market value for livestock mortality caused by a disaster; (2) the Livestock Forage Disaster Program (LFP), to assist ranchers who graze livestock on drought-affected pastureland or grazing land; and (3) the Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP), which provides up to $50 million annually to compensate these producers for disaster losses not covered under other disaster programs. As of December 3, 2013, cumulative payments under these programs totaled $5.9 billion, as claims continue to be processed for losses in 2011.

The 112th Congress considered but did not pass omnibus farm legislation, including extension of certain agricultural disaster programs that expired in September 2011. Instead, at the end of the 112th Congress, on January 2, 2013, the five-year 2008 farm bill was extended through September 30, 2013, as part of the American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240), but without funding for any of the 2008 farm bill disaster programs.

As a replacement for the 2008 farm bill (as extended under ATRA), the 113th Congress has been considering an omnibus farm bill with agricultural disaster provisions (Senate-passed S. 954 and the House-passed bill, H.R. 2642). Conference on the two measures is underway. Both the Senate and House farm bills would retroactively authorize and fund the livestock disaster and tree assistance programs, thereby potentially covering losses associated with the 2012 drought and other weather events. The Senate disaster provisions would expire September 30, 2018, while the programs in the House bill (with some differences) would be authorized and funded without an expiration date.

Date of Report: December 12, 2013
Number of Pages: 20
Order Number: RS21212
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