September 12, 2012 202.224.7433


Schumer Announces Effort to Revive Energy Grant Program That Has Allowed Construction of Five Biodigester Facilities Across Upstate New York – Biodigester Facilities Will Allow Dairies to Accommodate Growing Herds Under New CAFO Regulations

To Capitalize on the Explosive Growth of NY Greek Yogurt Industry, NY Dairies Need to Build Many New Biodigesters to Handle Waste & Create Renewable Energy for Farms – 1603 Grant Program Provides Cash for Farmers to Cover Upfront Construction Costs

Schumer: Expanding Biodigesters Means More Clean Energy and More Dairy Production to Meet Growing Yogurt Demand

Today, during a conference call, U.S. Senator Charles E. Schumer launched his plan to allow upstate New York dairy farmers to accommodate the larger herds that are needed to fully capitalize on the New York Greek yogurt boom. Specifically, Schumer fighting for the revival of the federal 1603 grant program that provides the upfront cash that is critical for dairy farms to construct biodigesters, which convert organic waste into a nutrient rich fertilizer and biogas, a renewable source of electrical and heat energy.

“Simply put, one of the main barriers family farmers face when expanding is the cost and difficulty of disposing of the increased manure,” said Schumer. “Because biodigesters turn this cow waste into clean energy and nutrient-rich fertilizer, they can be an essential part of the plan to enable our dairy farmers to fully capitalize on the Greek yogurt boom. But, our cash-strapped farmers need help setting up this operation and that’s why I am launching this drive to add resources to the 1603 loan program, which has a proven track record of helping our dairy farmers establish biodigesters.”

Under the newly proposed CAFO (Concentrated Animal Feeding Operations) regulations for New York announced in August, 4,455 dairy farms with less than 200 cows could increase their herds by at least 100 cows to better meet the demand for milk fueled by the growing Greek yogurt industry, according to 2010 data from Cornell University. As both yogurt production and dairy farms expand, the number of both regional and on-site biodigester facilities equipped to process their food and animal waste and protect the environment must also increase.

In addition to manure, digesters can also turn whey, a byproduct of yogurt production, into new renewable energy providing the state’s growing yogurt producers with a direct way to benefit from what they now simply send to disposal. Schumer highlighted that the Section 1603 “Payments for Specified Renewable Energy Property in Lieu of Tax Credits” program provides cash rather than a tax credit, meaning 100 percent of the benefit goes directly to the project, and has been a proven incentive in the past for dairies to overcome large initial costs to build these facilities. For example, Synergy Biogas in Wyoming County utilized the 1603 program to receive a $2,372,406 grant, which allowed the farm to build its co-digestion biogas facility, which converts animal waste from the farm’s herd and food waste from local food processors into energy that reduces the cost of the dairy’s operation. Synergy also generates enough electricity to power about 1,600 homes. At least three biodigester projects, under Ch4 Biogas ownership alone, are said to be under active consideration and would be put within reach with Section 1603.

“Upstate New York dairy farms must grow to meet new demands for milk and Greek yogurt, and that means one thing’s for certain: more biodigesters are key to accommodating the larger herds that will soon be grazing New York’s pastures,” said Schumer. “That is why I am reviving a critical federal grant program that has proven instrumental in jump-starting the construction of biodigesters across the country that will not only process the food and animal waste from expanding yogurt production, but also create new renewable energy for farms and local communities. New York must focus on developing more biodigesters to parallel growth in herds, in light of the planned new CAFO regulations. Over four thousand dairy farmers with fewer than 200 cows now stand to grow more easily, and this key energy incentive will help ensure that upstate New York is ready to capitalize on the explosive growth of the Greek yogurt industry.”

On the call, Schumer was joined by Lauren Toretta, Vice President of CH4 Biogas and John Noble, President and CEO of Synergy Dairy, who discussed the importance of the Section 1603 program for their biodigester projects, and noted that by utilizing its natural resources better and the Greek yogurt industry, New York could play an even larger role in the dairy and food business. Ch4 Biogas has at least three projects under active consideration that would be put within reach with 1603. The first is a digester under consideration in Lowville, NY in Lewis county near Kraft Food’s cream cheese plant, which would convert the plant’ food waste and manure from up to 20 nearby dairies into renewable electricity and gas to heat the plant. The second is under consideration in Linwood, NY in Livingston County, and would be fueled by waste at the Noblehurst Dairy. The third project is at a 3,000 cow dairy in Oneida County, which is approximately 30 miles away from Chobani yogurt. Schumer noted that these are only three of the numerous projects across the state that could more easily begin construction if the Section 1603 were revived.

Schumer provided a county-by-county breakdown of the number of dairy farms in upstate New York and the number of cows, at minimum, that those farms could add under the newly proposed CAFO regulations. CAFOs are facilities of 200 or more large animals that are concentrated into relatively small areas. In August, New York State proposed plans to raise the CAFO threshold from 200 to 300, which will allow smaller farmers to add a significant number of new cows, without hitting the mandatory expenses normally triggered at 200 animals. These costs are often the deciding factor for whether a dairy farm will expand, and means that approximately 4,455 dairy farms in New York could add at least 100 cows to increased their milk production, without expensive CAFO permits. A great deal of upstate New York farmers have expressed their intention of growth now that this impediment has been removed, and Schumer is pushing for the development and construction of additional biodigesters to better accommodate the parallel increase in animal and food waste as yogurt production and dairy farms expand. Schumer highlighted that not only would new biodigester projects help handle waste, but they would create a valuable source of renewable energy for the farm and surrounding communities, and help manage environmental concerns related to increased manure. There are currently 20 biodigesters across upstate New York, from Rensselaer to Chautauqua, ranging in size from digesters supported by a herd of 350 cows to ones with 3,500 cows.

The 1603 Grant Program has proven critical for numerous biodigester projects to get off the ground, providing the capital start-up costs needed to build the facility. Schumer noted the critical need to revive this program, which expired at the end of last year. The program was created as a provision of the Recovery Act that is designed to reimburse eligible applicants through a one-time cash grant for renewable energy products. The grant is intended to offset a portion of the cost of installing specified energy property that is used in a trade, business or production of income in lieu of tax credits available through other programs. Specifically, the 1603 grants replace the renewable energy tax credits in Sections 45 (production tax credits) and 48 (investment tax credits) of the Internal Revenue Code. For projects that claim grants from the 1603 Program, they forgo any production or investment tax credits as they are not allowed in conjunction with any 1603 funded properties. The 1603 grant was available for properties only if construction began between 2009 and 2011. For New York Farmers, the revival and continuation of this grant program is vital for expanding milk and dairy production to meet growing demands. The 1603 grants will help allow New York farmers to fund the upfront costs of constructing biodigesters using cash as opposed to tax credits. This will essentially ease the financial burden off the farmers for the overhead costs of constructing tools for green and renewable energy from dairy byproducts.

Biodigester facilities are an environmentally friendly and sustainable means of converting gas to energy through biological means that are less capital-intensive than large power plants. These facilities use anaerobic digestion processes to convert organic wastes into biogas (methane, carbon dioxide, and other trace gases). This not only creates a renewable source of electrical and heat energy, which can serve as a replacement to fossil fuels, but also produces nutrient-rich fertilizer materials. The use of biodigester facilities has further environmental benefits that the agricultural industry, one of the leading causes of global warming, has been able to harness. By drawing on natural wastes (e.g. cow manure, food biproducts) for power, they also help cut down on powerful greenhouse gases like methane that are twenty times more dangerous than CO2.

Below is a county-by-county breakdown of the number of dairy farms with less than 200 cows and are set to grow under newly proposed CAFO regulations, demonstrating the need for more biodigesters across New York:

· In the Capital Region, there are 567 dairy operations that could add at least 56,700 new cows.

· In Central New York, there are 1,028 dairy operations that could add at least 102,800 new cows.

· In the Rochester-Finger Lakes Region, there are 776 dairy operations that could add at least 77,600 new cows.

· In the Southern Tier, there are 1,149 dairy operations that could add at least 114,900 new cows.

· In the North Country, there are 872 dairy operations that could add at least 87,200 new cows.

· In the Hudson Valley, there are 140 dairy operations that could add at least 14,000 new cows.

· In Western New York, there are 557 dairy operations that could add at least 55,700 new cows.

Bazzo 09/14/12


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