Not All Chemicals Are Created Equal™

At long last, a Farm Bill has passed both houses of Congress and has been signed by the President. It has been a long and grueling process, but the outcome for us and our colleagues in the green chemicals industry is tremendous. The new legislation includes $881m in mandatory spending on energy programs; important legislative language ensuring parity for renewable chemicals; new funding for the Biomass Crop Assistance Program and Biomass R&D Initiative, and a pathway to crop insurance options for purpose-grown energy crops.

Many, many people – too many to mention here — deserve credit for their contributions to this outcome. But one organization stands out for its unflagging work to foster a better understanding among legislators about the pivotal role of biochemicals and the impact their development can have on our economy, our environment, and people. That would be BIO, the world’s largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across 34 nations.

In short, passage of the Farm Bill represents the successful culmination of BIO’s strenuous, two-year effort to reauthorize the energy title with mandatory funding and parity for renewable chemicals.  BIO helped found and form a coalition to work on this legislation called the Agriculture Energy Coalition and worked to garner the support of Senator Stabenow and other key Senators in support of funding an Energy Title that benefits both renewable fuels and chemicals. They used every aspect of BIO advocacy capabilities including communications, and state level activities to maintain support and interest in the legislation. The organisation is to be commended and congratulated.

It ain’t over ‘til it’s over, as they say, but on January 27, the House and Senate Agriculture Committees released the long-awaited conference report of the 2014 Farm Bill and it provides $881 million in mandatory funding for the Energy Title

IX programs. This means, for the very first time, it contains significant language for “renewable chemicals,” therefore providing tremendous benefits for our renewable chemical innovative technologies, domestic manufacturing, and creating jobs in U.S.!

A vote in favor is still needed from the full House and Senate. This hasn’t always been such an automatic thing. As you know, House and Senate leadership can simply stall any bill from being voted upon in either chamber, or both. But reports are that both House Speaker John Boehner and Senate Majority Leader Harry Reid are signaling that they plan to bring the legislation up for a vote in the next few weeks, and Congress is expected to enact it.

Courtesy of ML Strategies, LLC, which is a government relations consulting group and a trusted resource for Myriant, we have received the following three bullet points which summarize the critical importance of this conference report for companies in the renewable biochemicals industry:

•The legislation would create a statutory definition of renewable chemical.

•The Biopreferred program, which creates a federal demand for biobased and forestry products, is amended and expanded.

•Eligibility for the Biorefinery Assistance Program (Sec. 9003) is expanded from biofuels to include renewable chemical and biobased product manufacturing as well. One hundred million dollars of mandatory spending is available in FY 2014, and $50 million per year is available in FY 2015 and 2016. The loan guarantee program leverages private investment so that the $200 million in mandatory funding can effectively support an even larger number of loan guarantees. Typically, the credit subsidy costs of the loan guarantees (meaning the cost to the government when evaluating the risk of default) averages about 30 percent, so the $200 million in total mandatory funding could leverage upwards of $700 million in loan guarantees. Up to 15 percent of the funding for loan guarantees can be used to cover the expenses for renewable chemical and biobased manufacturing.

In short—this is huge!

Much thanks, by the way, is due the Biotechnology Industry Organization (BIO) which represents more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. It has been working tirelessly and obviously quite effectively to foster this legislative initiative.


Got Milk? Got $7?

December 17th, 2013 | Posted by in Policy - (0 Comments)

Among other things, I have the title here of Senior Vice President, Government Affairs. That means, I have the pleasure, frustration, optimism, impatience, anticipation and angst of following bills and policies coming in and out of Washington, DC, that could affect the biochemical industry. Few things for me have been as amusing, aggravating, anxious, appalling, interesting as the agonizing Farm Bill negotiations in Congress.

Various reports now speculate a new Farm Bill could be approved in January. Updates seem to come daily from media representatives trying to calculate progress from the facial expressions of committee members exiting a negotiating session. Dire consequences continue to be identified should a new bill fail to emerge. One of the most recent of these is this item: Milk for $7 a gallon? Farm bill impasse could send US off ‘dairy cliff.’

To further abuse an already tortured pun, I think the prospect of $7 per gallon of milk is udderly ridiculous. In any event, stay tuned. It does look like progress is being made, with most pundits saying the House and Senate could pass a bill in early January when Congress returns from its recess.

On Wednesday October 9th at the Federal Reserve Bank in Boston, the Environmental Protection Agency (EPA) had planned to convene a one-day forum to discuss Business Value Creation Though Green Chemistry.  For those who think everything the government has a hand in is all about what the government can do, this meeting was all about and all for leaders from business and industry, entrepreneurs, venture capitalists, non-profit groups, U.S. EPA and others involved in the application of green chemistry principles to bring high value products to the market that are safer, healthier and more sustainable. In other words, it was to be an “Ask not what your country can do for you…”  kind of day.

In the name of full-disclosure, Myriant was to be an important contributor to the Case Studies portion of the day’s events. But it’s not happening. The government shutdown literally shut down this discussion. For the record, we’re not frustrated by the loss of yet one more speaking opportunity. Myriant wins its fair share of the limelight and we appreciate it. But in this instance, we’re frustrated because this cancellation points directly to the unintended consequences of the blunt instrument of a political process that renders good things dead in the water. A government agency in this case is trying to help Myriant and others find ways to rely less on government agencies. That’s a good thing. A wholesale, ham-handed shutdown is, in contrast, a bad thing.

But there are political points to be scored; re-election prospects to shore up; tea party and liberal base affiliations to secure. Where’s right and wrong? Where’s what is good or not so good for the future of the nation and its people? This is probably where Washington has made its greatest miscalculation. Does not the nation now know that when the Congress contemplates the future, it is the future of their political prospects that loom largest in their calculus?

A triviality, you think?  The one-day event can be re-scheduled, right? Probably. But here’s some additional information that I know to be true or have on good authority about the shutdown as it affects our industry: the government shutdown directly impacts all regulatory and legislative efforts affecting the biofuels and renewable chemicals industries, including work on the Toxic Substances Control Act (TSCA) and the Renewable Fuel Standard (RFS). It will almost certainly delay upcoming expected rulemakings, including the EPA’s proposed rule setting the 2014 renewable volume obligations (RVO) under the RFS. It is reported that nearly 95 percent of EPA’s staff has been furloughed during the shutdown, leaving only 17 employees working in EPA’s Office of Air and Radiation and three working in the Office of Water. Three? Seriously?

Not only did the U.S. government shut down, but so did the nine month extension of the 2008 Farm Bill. With no new five-year Farm Bill, the future is uncertain for rural energy programs supported by the U.S. Department of Agriculture (USDA), including the Biorefinery Assistance Program that promotes the development of biorefineries in the U.S.

Have you seen the Sunday news-talk shows over the past couple of weeks? Seems to me the shutdown is a cry for attention among Washington legislators every bit as nutty needy as Miley Cyrus and her decision to ride a wrecking ball while virtually naked and, dare I use the word, ‘singing?’ ‘Watch me, see me, hear me?’ How better to revive one’s political and/or theatrical standing than by outrageous behavior, right?  It’s like DC is run by Rep.Charley Sheen, Sen. Alec Baldwin, White House Aid Lindsay Lohan, etc. Give me a break!

I can’t speak for you, but for me, I am perplexed why the President and the House Speaker and the Senate President and minority and majority leaders in every nook and cranny have all this time to talk on camera for public consumption, but no time for one another, face-to-face, eyeball-to eyeball, for hardball versus some Emmy-award-winning candy-(cane?) performance on camera calling one another names, playing the blame game, posturing, prognosticating, and pushing painfully-vapid party line talking points average Americans see right through and are sick of hearing.

Where are the leaders like Lyndon Johnson who would grab legislators by the labels and do a deal, doggone it? Where is our generation’s Sam Rayburn?  And, Massachusetts favorite Thomas Phillip “Tip” O’Neill, Jr.? Where are today’s potential candidates for a sequel to JFK’s ‘Profiles in Courage,’ the book detailing acts of political risk and resolve by eight United States Senators?