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Office of the Press Secretary

For Immediate Release January 21, 2000
                            January 21, 2000

The President's FY2001 budget proposal includes a new initiative in research and development in bio-based technologies, which convert crops, trees, and other "biomass" into a vast array of fuels and products. Biobased industries use agricultural, forest, and aquatic resources to make an array of commercial products including fuels, electricity, chemicals, adhesives, lubricants, and building materials.

The initiative provides an increase of more than $93 million over the amounts available for FY 2000, with $49 million directed towards the Department of Energy (DOE) and $44 million for increased R&D efforts at the Department of Agriculture (USDA). In addition to this increase in R&D, the Commodity Credit Corporation will provide $100 million in FY 2000 and up to $150 million in FY 2001 and 2002 in incentive payments to encourage production of biobased fuels.

                                 FY 2000 ($M)    FY 2001 ($M)    Percent 

 U.S. Department of Agriculture       71              115          62%         
 U.S. Department of Energy           125              174          39%         

 Total                               196              289          47%         

Reaching the President's goal would generate billions of dollars of new income for farmers and diversify and strengthen the rural economy, producing 50,000 new, high-technology jobs in small processing plants in rural America and up to 130,000 such jobs in biopower, bioproducts, and biofuels industries. It would also generate 348 million barrels of oil a year, equal to 158 super tankers and would lower the emissions of greenhouse gases by 100 million tons, equal to the amount emitted by 70 million cars.

A major goal of this initiative is making biomass a viable competitor to fossil fuels as an energy source and chemical feedstock while protecting the environment. Continuing advances in forest and farm technology, molecular biology, and other areas make this goal achievable, but capturing the goal will require an unprecedented effort to support research in universities, companies, and our national laboratories. In the past few years, for example, federal research has developed techniques that greatly accelerates the production of sugars and other useful chemicals from materials like corn stover and wood. Creative companies have taken research results from such investments and are making major investments. In the near future we can expect production of loose-fill packaging materials from a combination of plastic resins and natural polymers made from biomass. The research funded under this initiative will ensure a continuing flow of the basic innovations on which such investments can be made.

Many uses for biomass materials are possible in the near future and this initiative will support research concepts on a competitive basis. This will include support for integrated systems capable of processing feedstocks simultaneously into a variety of products such as fuels, chemicals, and electricity. Much like today's petroleum-based refineries, the mix of products from these facilities will depend on market conditions. The research aims to understand the basic chemistry of cellulose and other materials in biomass, and develop new thermal, chemical, and bio-chemical techniques for converting these materials into useful forms.

The President's August 1999 Executive Order instructs DOE, USDA, NSF, EPA and other agencies, to work closely together in supporting the broad range of needed research and development efforts. The research will support research partnerships linking industry, university, and government research facilities selected on a competitive basis. Key areas of new research activity will include: