```

[Federal Register: October 27, 2010 (Volume 75, Number 207)]
[Proposed Rules]               
[Page 65995-66007]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27oc10-11]                         

========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================

[[Page 65995]]

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1450

 
Biomass Crop Assistance Program

AGENCY: Commodity Credit Corporation and Farm Service Agency, USDA.

ACTION: Record of Decision.

-----------------------------------------------------------------------

SUMMARY: This document presents the Record of Decision (ROD) regarding 
FSA implementation of the Biomass Crop Assistance Program (BCAP) as 
provided for in the Food, Conservation, and Energy Act of 2008 (the 
2008 Farm Bill). The U.S. Department of Agriculture (USDA), Farm 
Service Agency (FSA) prepared a Final Programmatic Environmental Impact 
Statement (PEIS) for BCAP. A Notice of Availability (NOA) of that PEIS 
was published in the Federal Register on June 25, 2010. This decision 
record summarizes the reasons FSA has selected the Proposed Action 
Alternatives taking into account the program's expected environmental 
and socioeconomic impacts and benefits as documented in the PEIS, all 
of which were considered in this decision.

SUPPLEMENTARY INFORMATION:

The Decision

    Having undertaken a thorough evaluation of the resource areas 
affected by BCAP, a detailed analysis of the alternatives, a 
comprehensive review of public comments on the Draft PEIS, comments 
received on the Notice of Fund Availability (NOFA) to the Matching 
Payment component of BCAP, experience from administering the Matching 
Payments component of BCAP, and public comments received on the 
proposed rule, FSA has decided to implement Alternative 2, the Selected 
Alternative, identified for BCAP. This decision was made after 
comparing overall environmental impacts and other relevant information 
with regard to the reasonable alternatives considered in the BCAP PEIS 
and through the additional public input on the BCAP following the 
guidance of the Administrative Procedures Act (Pub. L. 79-404) and 
agency rules, opinions, orders, records, and proceedings. Alternative 2 
was selected as the alternative that was most consistent with the 
intent and language of the 2008 Farm Bill (Pub. L. 110-246), while 
being environmentally responsible and reasonable to implement, and that 
would not have significant negative impacts. The following briefly 
describes the purpose and need for the proposed action and the 
alternatives considered.

Purpose and Need for the Proposed Action

    The purpose of the Proposed Action is to establish and administer 
BCAP, as specified the 2008 Farm Bill. The need for the Proposed Action 
is to implement BCAP for the purposes specified in the 2008 Farm Bill, 
specifically to promote the establishment and production of eligible 
dedicated energy crops.
    The purpose of the PEIS was to identify and assess the broad 
implications to the human and natural environments of the national 
implementation of those components of the BCAP that were discretionary 
in nature as provided by the 2008 Farm Bill. It was determined that 
BCAP provided incentives and assistance in the production of dedicated 
energy crops similar to the incentives for production of traditional 
agricultural row crops, which was the reasoning behind limiting the 
analysis to establishment and production of dedicated energy crops. 
Dedicated energy crops currently under consideration as economically 
viable were determined to use similar cultivation techniques, grown in 
areas with current traditional crop production, and have similar 
transportation methods and mechanisms, and as such, would have similar 
off-farm effects for delivery to markets, with these effects being site 
specific. The range of final products that could be produced from 
dedicated energy crops grown as part of BCAP is wide and changing with 
new technology on a rapid basis. Cumulatively, the conversion of 
dedicated energy crops into a final product was qualitatively analyzed 
since the location, type, and technology to reach a final product from 
a dedicated energy crop could not be quantifiably determined as part of 
this program.

Overview of BCAP

    BCAP is a new program provided for in Title IX of the 2008 Farm 
Bill. BCAP is intended to assist agricultural and forest land owners 
and operators with the collection, harvest, storage, and transportation 
of eligible materials for use in a biomass conversion facility (BCF) 
and to support the establishment and production of eligible crops for 
conversion to bioenergy in selected project areas. BCAP will be 
administered by the Deputy Administrator for Farm Programs of the FSA 
on behalf of the Commodity Credit Corporation (CCC) with the support of 
other Federal and local agencies. BCAP is composed of two components: 
(1) The Matching Payments component for the collection harvest, 
storage, and transportation (CHST) of eligible materials, and (2) the 
Establishment and Annual Payments component associated with BCAP 
project areas.

BCAP Matching Payments Component

    CCC and FSA published a NOFA for the Matching Payments component of 
BCAP for eligible renewable biomass material on June 11, 2009 (74 FR 
27767-27772). The NOFA announced the availability of funds beginning in 
2009 for matching payments to eligible material owners for CHST of 
eligible material delivered to qualified BCFs in advance of full 
implementation of BCAP. FSA invited comments on the NOFA from all 
interested individuals and organizations over a 60-day comment period. 
On February 8, 2010, the proposed rule for full implementation of BCAP 
was published (75 FR 6264-6288) which terminated the NOFA effective 
February 3, 2010. With the publication of the proposed rule, the CCC 
and FSA requested comments on the proposed rule, which included both 
components of the BCAP.
    The NOFA was published in response to the Presidential Directive 
issued to the Secretary of Agriculture directing an aggressive 
acceleration of investment in and production of biofuels. The 
Presidential directive requested that the Secretary of Agriculture take 
steps to the extent permitted by law to expedite and increase 
production of and investment in biofuel development by making the 
renewable energy financing available in the 2008 Farm Bill available 
within 30

[[Page 65996]]

days. The NOFA was the first step in a multi-step process to provide 
guidance and funding for CHST in response to the Presidential Directive 
consistent with the 2008 Farm Bill. The NOFA provided a general summary 
of the provisions that would be used to administer payments for CHST in 
advance of the rule on BCAP. Specifically, the NOFA (1) provided 
policies and processes for providing matching payments for the CHST of 
eligible material, to qualified BCFs, and (2) described the process for 
qualifying CHST BCFs. The Matching Payments component was implemented 
under the guidance of the Deputy Administrator for Farm Programs, FSA 
(Deputy Administrator), who is also the Executive Vice President of 
CCC. The USDA determined that making these funds available as soon as 
possible was in the public interest, and that withholding funds for 
CHST to provide for public notice and comment would unduly delay the 
provisions of the benefits associated with the program.
    The Matching Payments component was determined not to be a major 
Federal action per the NEPA definition since (1) the program was 
understood to be a mandatory program subject to a final construction 
and implementation of the statutory terms and the interim allocation of 
funds while the final determinations were being made and (2) the 
materials collected during the Matching Payments component were 
currently being utilized in the marketplace for a similar, if not the 
same, purpose. The Matching Payments component incentivized an existing 
activity, which was fully seen from the data collected during the NOFA 
authority, to continue production during current economic conditions. 
The data from the NOFA indicated that approximately 80 percent of the 
BCFs qualified were collecting renewable biomass materials prior to the 
NOFA, indicating only a small number of qualified BCFs either were new 
facilities, facilities newly brought on-line, but were in the 
construction phases prior to the NOFA, or were facilities that 
restarted production from an off-line state due to the incentive 
created by the Matching Payments component encouraging delivery of the 
energy feedstock. There is an indication from the data that there was a 
redirection of some existing materials from pulp and paper 
manufacturers to wood pellet mills.
    The Matching Payments component of BCAP was analyzed in the PEIS as 
a mandatory implementation of the 2008 Farm Bill for either alternative 
in the economic modeling as a payment to producers within project 
areas; it was not analyzed as a payment to others outside the contract 
acreage producers. It was assumed for both alternatives that producers 
would receive the $45 per ton as the maximum matching payment for 
delivery of biomass to a qualified facility for two years from the 
first delivery. Using this assumption would anticipate, per the model 
limitations, the potential for maximum adoption of dedicated energy 
crops by producers within project areas and therefore, estimated land 
use conversion given the highest potential value, in total (annual 
payment, delivery payment, and matching payment combination), for 
delivered biomass. The maximum payment scenario was used to depict a 
maximum adoption under limited funding and a scenario with unlimited 
funding that would assist in meeting the goals of other legislation 
(such as the Renewable Fuel Standard (RFS2)), which would indicate the 
broad potential impacts to the human and natural environments from the 
establishment and growth of dedicated bioenergy crops. The timing 
within the model was estimated as five years from acreage contracted 
during the last authorized fiscal year for herbaceous perennial crops 
with a delivery estimate of two to three years from establishment. For 
woody species, the contract period is 15 years with at least one 
delivery; therefore, the model results were assumed for a period 15 
years from acreage contracted during the last authorized fiscal year 
with at least one delivery for some woody species and two deliveries 
for other woody species.

BCAP Establishment and Annual Payments Component

    BCAP is intended to support the establishment and production of 
eligible crops on eligible land for conversion at a biomass conversion 
facility (BCF) in selected BCAP project areas and to provide financial 
assistance to producers of eligible crops in BCAP project areas. Under 
the Establishment and Annual Payments component, the CCC would accept 
BCAP project area proposals on a continuous basis. To be considered for 
selection as a BCAP project area, a project sponsor consisting of a 
group of producers or a BCF must submit to the Secretary a proposal 
that includes (at a minimum): (1) A description of the eligible land 
and eligible crops to be enrolled in the proposed BCAP project area; 
(2) a letter of commitment from a BCF that the BCF would use eligible 
crops intended to be produced in the BCAP project area; (3) evidence 
that the BCF has sufficient equity available if the BCF is not 
operational at the time the project area proposal is submitted; and (4) 
other information that gives the Secretary a reasonable assurance that 
the BCF would be in operation by the time that the eligible crops are 
ready for harvest. BCAP project area proposals would be evaluated on 
selection criteria that take into account:
     The dry tons of eligible crops and the probability those 
crops would be used for BCAP purposes;
     The dry tons of renewable biomass potentially available 
from other sources;
     The anticipated economic impact within the project area;
     The opportunity for producers and local investors to 
participate in ownership of BCF;
     The participation by beginning or socially disadvantaged 
farmers or ranchers;
     The impact on soil, water, and related resources;
     The variety in biomass production approaches within a 
project area;
     The range of eligible crops among the project areas;
     The ability to promote cultivation of perennial bioenergy 
crops and annual bioenergy crops that show exceptional promise, and not 
primarily grown for food or animal feed; and
     Any additional criteria, as determined by the Secretary.
    BCAP project areas would be subject to approval based on the above 
selection criteria and the successful completion of a finding of no 
significant impact (FONSI) for a NEPA Environmental Assessment (EA), 
which would determine that there would be no significant effects to the 
natural or human environment within the proposed project area. This 
project area level NEPA document would identify regionally and locally 
significant features and/or resources and the potential for effects to 
those resources from the proposed project area implementation. If 
certain mitigation measures could be undertaken to avoid significant 
effects, those measures would be detailed in the project area EA.
    Additional requirements at the producer level include conservation 
planning in the form of a BCAP conservation plan or forest stewardship 
plan (or an equivalent plan). In addition to an approved conservation 
plan or forest stewardship plan (or the equivalent), a site-specific 
BCAP environmental screening form would be completed to determine the 
appropriate level of further environmental review necessary prior to 
completion of the BCAP contract with the producer. That environmental 
review and conservation

[[Page 65997]]

planning would provide site-specific mitigation measures, as necessary, 
to conserve physical and biological resources at the contract level. 
Those mitigation measures and practices approved through conservation 
planning would be periodically monitored by USDA to determine the 
success and compliance with those measures.
    A producer within the project area may enter into a contract with 
CCC to commit eligible land, which would then be called contract 
acreage, to establish and/or produce eligible crops. Contract durations 
may be up to five years for annual and non-woody perennial crops and up 
to 15 years for woody perennial crops. The 2008 Farm Bill defined 
eligible land for project areas as agricultural land and non-industrial 
private forest land (NIPF), subject to certain exclusions. Eligible 
agricultural land for BCAP includes cropland, grassland, pastureland, 
rangeland, hayland, and other lands on which food, fiber, or other 
agricultural products are produced or are capable of being produced for 
which a valid conservation plan exists or is implemented. Eligible NIPF 
land for BCAP includes rural lands with existing tree cover, or that 
are suitable for growing trees, which are owned by any private 
individual, group, association, corporation, Indian tribe, or other 
private legal entity as provided by section 5(c) of the Cooperative 
Forestry Assistance Act of 1978, as amended (16 U.S.C. 2103a). 
Agricultural and NIPF lands with already established energy crops or 
already contracted for energy crops or planned energy crops would be 
eligible lands for contract acreage. USDA FSA may consider waste lands, 
brownfields, abandoned mine land, and environmental clean-up sites as 
eligible land, if they meet the definition of agricultural land or 
NIPF, as described above and in the 2008 Farm Bill.
    Producers in project areas may be eligible for both BCAP 
establishment payments and annual payments. Producers would be eligible 
for establishment payments for not more than 75 percent of the cost of 
establishing a perennial crop, which could include woody perennial 
crops. Establishment payments were not authorized for annual crops and 
would only be made for new perennial, eligible crops with a projected 
initial harvest time occurring within the length of the contract 
period. Existing eligible crops on agricultural lands and NIPF would 
not be eligible for establishment payments; however, they could be 
eligible for annual payments. Annual payments would be calculated on: 
(1) A weighted average soil rental rate for cropland; (2) the 
applicable marginal pastureland rental rate for all other land except 
for NIPF; (3) for NIPF, the average county rental rate for cropland as 
adjusted for forestland productivity; and (4) any incentive as 
determined by the Deputy Administrator. The payments are intended to 
support production of eligible crops.

Alternatives Analyzed

    The following list contains action alternatives determined to be 
reasonable, which were evaluated in detail in the BCAP PEIS as 
developed during internal and public scoping processes, as described in 
the following section. These alternatives were developed to provide 
overall flexibility in the program with one alternative being 
restrictive and with limited funding, while the other was broader and 
could provide a greater level of funding. The No Action Alternative, 
used as a baseline for comparison of the Proposed Action, assumed no 
Federal program for the Establishment and Annual Payments Program 
component of BCAP. Alternative 1 was determined to be the Preferred 
Alternative in the Final PEIS.

                         Alternatives Considered
------------------------------------------------------------------------
      Alternative 1: Targeted        Alternative 2: Broad implementation
       implementation of BCAP                      of BCAP
------------------------------------------------------------------------
BCFs supported by BCAP project       All bio-based products produced by
 areas are limited to producing       a BCF in BCAP project areas can be
 energy.                              supported.
No new non-agricultural lands        New non-agricultural lands allowed
 allowed for BCAP project area crop   for BCAP project area crop
 production.                          production.
Cropland acres enrolled in the       Cropland acres enrolled in the
 program would be capped at 25        program would not be capped.
 percent of cropland acres within a
 given county.
Advanced biofuels produced by BCAP   Advanced biofuels produced by BCAP
 project area BCFs must meet the      project area BCFs do not need to
 greenhouse gas test.                 meet the greenhouse gas test.
Only new BCFs are allowed to be      Existing BCFs that meet BCAP
 part of BCAP project areas and       eligibility requirements are
 only newly established crops on      supported.
 BCAP contract acres are eligible
 crops.
Only large commercial BCFs would be  Small and Pilot BCFs would qualify
 allowed in BCAP project areas.       for BCAP project areas.
Payments would be limited to         Payments would completely replace
 provide some risk mitigation.        lost potential income from non-
                                      BCAP crops.
------------------------------------------------------------------------

Public Involvement

    Responses to the Final SEIS public comments and FSA's analyses 
supporting this Record of Decision are presented in the following 
discussion.

Public Scoping

    CCC first provided notice of its intent (NOI) to prepare the 
proposed BCAP PEIS in the Federal Register on October 1, 2008 (73 FR 
57047-57048). CCC provided an amended NOI to prepare the proposed BCAP 
PEIS on May 13, 2009 (74 FR 22510-22511), and solicited public comment 
on the proposed PEIS for BCAP. Six public scoping meetings were held in 
May and June 2009 to solicit comments for the development of 
alternatives and to identify environmental concerns. FSA performed a 
density analysis of likely BCAP participation to determine those areas 
that would utilize the program and meetings were planned for these six 
locations. Public meetings were held in Washington, Texas, Iowa, 
Louisiana, Georgia, and New York in the cities and dates as presented 
in the table below. The PEIS has taken into consideration comments 
gathered in the scoping process initiated with the October 1, 2008, NOI 
to develop the alternatives proposed for the administration and 
implementation of BCAP. Announcements of the scoping meetings were 
posted in the FR (74 FR 22510-22511), State and county FSA offices, and 
the FSA Web site prior to the meetings. A public website was created 
that provided program information, scoping meeting locations and times, 
and an electronic form for submitting comments via the internet. A 
presentation was given at each meeting followed by a comment period for 
attendees. Printed program information and comment forms were made 
available at the meetings, along with

[[Page 65998]]

cards providing the public comment Web site address. Meetings were 
attended by the FSA National Environmental Compliance Manager or FSA 
Federal Preservation Officer, and were recorded by a court reporter.

                     List of Public Scoping Meetings
------------------------------------------------------------------------
        Date of meeting            City, state        Meeting location
------------------------------------------------------------------------
May 28, 2009..................  Olympia WA.......  Red Lion Hotel, 2300
                                                    Evergreen Park
                                                    Drive, Olympia, WA
                                                    98502.
June 2, 2009..................  Amarillo, TX.....  Hilton Garden Inn,
                                                    9000 I-40 West,
                                                    Amarillo, TX 79124.
June 4, 2009..................  Alexandria, LA...  Alexander Fulton
                                                    Hotel, 701 4th
                                                    Street, Alexandria,
                                                    LA 71301.
June 8, 2009..................  Des Moines, IA...  Renaissance Savery
                                                    Hotel, 401 Locust
                                                    Street, Des Moines,
                                                    IA 50309.
June 10, 2009.................  Albany, GA.......  Hilton Garden Inn,
                                                    101 S. Front Street,
                                                    Albany, GA 31701.
June 11, 2009.................  Syracuse, NY.....  Hilton Garden Inn,
                                                    6004 Fair Lakes,
                                                    East Syracuse, NY
                                                    13057.
------------------------------------------------------------------------

    All comments received during the scoping process were recorded and 
categorized, as applicable, to the stated purpose and need for the 
Proposed Action, the Proposed Action itself, preliminary alternatives, 
and environmental resource areas. The comments were evaluated by FSA to 
determine the scope and significance of each issue and the depth at 
which it would be analyzed in the PEIS.

Draft PEIS

    The availability of the Draft PEIS was announced on August 10, 2009 
(74 FR 39915). This Notice of Availability (NOA) marked the beginning 
of a 45-day public comment period soliciting comments from interested 
persons and agencies. Comments were received through October 9, 2009. 
Copies of the Draft PEIS were provided to the headquarters and all the 
regional offices of the U.S. Environmental Protection Agency (EPA) and 
U.S. Fish and Wildlife Service (USFWS). Comments were received from 
State and Federal agencies, non-government organizations, and 
individuals. FSA responded to all substantive comments received and 
either expanded the PEIS to address the comment or explained why the 
PEIS was not expanded or clarified in accordance with the comment.
    The Draft PEIS received comments from five Federal agencies, three 
private individuals, 25 organizations or corporations, and the 
Government of Canada. These 35 commenters generated 191 comments. The 
individual comments addressed Air Quality (22), Biological Resources 
(41), Cumulative Effects (9), Mitigation (4), Additional Language or 
Further Clarification (14), Other (39), Proposed Action and 
Alternatives (24), Purpose and Need (10), Recreation (1), Resources 
Eliminated from Detailed Study (3), Socioeconomics and Land Use (21), 
Soil Resources and Quality (11), and Water Quantity and Quality (10).
    Comments concerning Air Quality included greenhouse gas (GHG) 
emissions from biomass burning, carbon sequestration, soil carbon, 
carbon sinks, primary/criteria air pollutants, and wind erosion. 
Biological resources comments included effects to protected species, 
primary nesting season (PNS) considerations, conversion of forest 
lands, conversion of grasslands, genetically engineered (GE) organisms, 
cumulative effects to vegetation and wildlife, types of crops planted, 
grassland birds, and invasive and noxious species. Cumulative effects 
comments included effects to higher-value product feedstocks, effects 
from forest land conversion, and associated and related programs at the 
state level. Mitigation comments included new tools to assess the 
values of biomass production at the site-specific level to generate the 
BCAP conservation plan and a request for greater details. Other 
comments received included mechanisms associated with CHST, monitoring 
programs, conversion of Conservation Reserve Program (CRP) acres, the 
inclusion of crop residues, greater description of forestry resources, 
agricultural plastics, more precise definitions of eligible crops and 
lands, and the use of only one crop type as an example of eligible 
crops. Several comments were received on the number of alternatives 
presented and analyzed. Comments on Socioeconomics and Land Use 
included the effects on existing BCF, the use of residues, and the 
inclusion of short rotation woody crops (SRWC) into the models. Soil-
related comments included increased erosion potential, soil carbon 
sequestration, and the role of agricultural residues in soil formation. 
Water-related comments included water quantity for BCF use, erosion and 
pesticide transport, irrigation use, and Gulf of Mexico hypoxia.

Final PEIS

    Public notices announcing the availability of the Final PEIS were 
published on June 25, 2010 (75 FR 36386). The Final PEIS was available 
for public review and comment for 30 days, and to ensure that all 
potential comments from interested stakeholders were received and 
reviewed, an extra 30 days was provided for FSA receipt of comments. 
FSA received comments from two Federal agencies, 38 organizations or 
corporations, one local government representative, and seven private 
citizens. Approximately 54 percent of the commenters specifically 
favored one alternative over the others, with 15 commenters favoring 
Alternative 1, 10 commenters favoring Alternative 2, and one commentor 
favoring the No Action Alternative.
    Final PEIS commenters supported Alternative 2, the Selected 
Alternative, for many of the following reasons: Provides the greatest 
incentive for forest landowners to continue managing NIPF to produce 
valuable ecosystem goods and services; discourages NIPF owners from 
converting forest land to other land uses; provides more renewable 
biomass than Alternative 1 or the No Action Alternative; creates the 
greatest reduction in fossil fuel consumption; increases energy 
security by increasing domestic energy production; socioeconomic 
benefits; environmental benefits; allows the all qualified BCF to 
participate regardless of size; Alternative 1 is too restrictive; more 
closely supports State renewable portfolio standards (RPS) goals; 
creates green jobs; and provides greater incentives to high potential 
bioenergy crops.

Impacts Summary

    The Final PEIS outlines and compares all of the alternatives' 
potential impacts. Based upon the analyses and conclusions presented in 
the Draft PEIS, FSA identified the Preferred Alternative as Alternative 
1; however, with comments received on the NOFA, experience with the 
Matching Payments component of BCAP, comments received on the proposed 
rule, and from

[[Page 65999]]

the Final PEIS comment period, FSA has chosen Alternative 2 to be the 
selected and implemented alternative. Within the context of the 
Proposed Action's purpose and need, this alternative is both 
environmentally responsible and reasonable to implement, would not have 
significant negative impacts, and more closely matches the intent and 
guidance of the 2008 Farm Bill. Both beneficial and potential adverse 
effects of the alternatives analyzed for implementing BCAP are 
identified and discussed below.

Alternative 1 (Preferred Alternative)

    Under Alternative 1, the BCAP Establishment and Annual Payments 
component would be implemented on a more restrictive or targeted basis. 
Project areas would be authorized for those that support only large, 
new commercial BCFs that are limited to producing energy in part from 
only newly established crops on BCAP contract acres. No new non-
agricultural lands (for example, NIPF converted to herbaceous crop 
lands) would be allowed to enroll for BCAP crop production.

Socioeconomics and Land Use Effects

    Modeling indicates that at the national level, direct impacts to 
realized Net Farm Income are expected to remain unchanged from that of 
the No Action Alternative due to limited funding. However, net returns 
are likely to improve for those producers selected to participate in a 
BCAP project area. Total net returns for most potential project 
locations are positive, ranging between $2.7 and 7.3 million in Year 1 
of the program. Modeling shows that positive Net Returns would still be 
expected over the long term (Year 3), indicating that the BCAP project 
areas remain capable of supplying a BCF with required feedstock.
    Alternative 1 would cause land use changes only at the local level 
(that is, county or multi-county region). Land use changes range 
between 22,000 to 44,000 acres of crop (for example, corn, wheat, soy, 
etc.) and hay land being converted to dedicated energy crops 
(switchgrass) from that of the No Action Alternative.
    Overall, scientific literature and the modeling for the BCAP PEIS 
indicated that the vast majority of cropland for dedicated energy crops 
would come from cropland currently in production for traditional row 
crops and from pastureland. Additionally, recent literature indicates 
that potentially nine million to 15 million expiring CRP acres could 
return to crop production by 2025, with an estimated one million acres 
potentially being planted in dedicated energy crops. This was based on 
the probable higher value of traditional row crops without the 
incentives provided by BCAP for dedicated energy crop production. The 
impact of expiring CRP acres on total CRP enrollment would be offset 
through re-enrollments into CRP and new acres being enrolled in CRP to 
reach the 32 million acre CRP cap as specified in the 2008 Farm Bill.
    The PEIS found that Alternative 1 would cause only minor conversion 
of natural landscapes, including native habitats and forests, due to 
(1) the economic costs associated with supplying infrastructure (for 
example, roads, temporary irrigation for establishment) to those lands 
and (2) the restrictions inherent in the 2008 Farm Bill that limit and 
protect unique native habitats such as native sod, which would include 
rangelands that have never been in crop production. Economic indirect 
impacts under this alternative vary by project location.
    The analysis method used in the PEIS did not address international 
indirect land-use change. This can be done, for example, by coupling 
output from the Policy Analysis System (POLYSYS) economic simulation 
model to an international economic sector model, such as the Global 
Change Assessment Model (GCAM) at the Joint Global Change Research 
Institute. Associating carbon coefficients to the economic sectors (for 
example, forest, croplands, fossil fuels, etc), allow for estimates of 
indirect land-use change associated with the changes in land-use 
occurring nationally. However, it is important to recognize that the 
ratio of land-use change (for example, one acre of soybeans taken out 
of production in the United States equals one acre of tropical 
deforestation) has not been adequately established through scientific 
literature. The social drivers of indirect land-use change are not 
clear, not substantiated, and cannot be modeled in a fact-based 
analysis at this time.
    Growing dedicated energy crops, and subsequent land use changes for 
those crops in a region, would impact the agricultural sector by the 
creation of a new market. The exact amount of land that may be 
converted is limited to 25 percent of the acreage within each county 
being eligible for BCAP payments. This equates to a relatively small 
amount of vegetation being converted from traditional crops or 
pastureland to approved dedicated energy crop species. It is estimated 
that producing a dedicated energy crop would require $60 per dry ton 
(approximately $10 million) to establish the crop. To receive payments 
to establish a dedicated energy crop, producers must first convert 
their land from traditional crops. This would result in negative 
impacts within the community as inputs from the traditional crops are 
not purchased. Costs vary based on the community and the amount of land 
use changes required and range between $1.5 million to $5 million.
    Total economic impacts range between $19 million and $28 million. 
Net positive impacts for the top five projects are between $21 million 
and $25 million for their region. However, land use changes would 
create negative impacts, through reduced purchases of inputs for 
traditional farming, within a region ranging from $2.5 million to $10 
million depending on location.

Biological Resources

    Due to the small scope of this alternative, and provided 
established provisions, standards, and guidelines are followed, and 
provided the BCAP conservation plan, forest stewardship plan (or the 
equivalent) are adapted to resource conditions, Alternative 1 would 
have no significant negative impacts on vegetation or wildlife.
    It is unlikely there would be significant negative impacts to 
wildlife populations from the conversion to dedicated energy crops at a 
regional scale. However, the potential always exists for site-specific 
fluctuations in wildlife populations without the proper adaptive 
management techniques being applied during the establishment and 
harvesting stages of crop production. The proper use of adaptive 
management and appropriate mitigation techniques related to 
agricultural processes can help minimize any potential negative direct 
effects. There are not expected to be large scale impacts to regional 
wildlife populations because of the limited scope of land use change 
under this alternative. Indirect impacts to wildlife are related to 
habitat change. Some degree of wildlife mortality from collisions or 
nest destruction from farm equipment is unavoidable. Provided 
establishment and harvest of feedstock does not occur during the 
primary nesting season (PNS), these impacts should be minimized.
    Reptiles and amphibians could experience negative and positive 
responses to the conversion to dedicated energy crops. The increase of 
native vegetation may increase the abundance of invertebrates, a source 
of food for many reptiles and amphibians. There may be short-term 
reductions in population sizes the year that

[[Page 66000]]

conversion occurs from agricultural activity to biomass establishment 
from collisions or crushing by farm equipment. The techniques described 
above, if properly planned and applied, are designed to minimize the 
impacts to wildlife of these activities. Likewise, because of the 
limited implementation under this alternative, these impacts would not 
be regional nor are they anticipated to affect regional wildlife 
population levels.
    Impacts to invertebrates are related to habitat, and would vary 
based on specific lifestyle and habitat preference. Direct impacts to 
invertebrates are dependent on the degree of exposure and the mobility 
of a given species. Impacts from the establishment include destruction 
of nest sites, crushing, and the removal of food sources. These impacts 
can be reduced if activities are not conducted during periods of 
highest florescence or when flowers are in bloom.
    Impacts to aquatic wildlife are associated with the dangers of 
sedimentation, and nutrient and agricultural chemical deposition into 
water bodies. However, provided established procedures for erosion and 
runoff control are followed, these potential impacts are not expected 
to be significant.

Air Quality

    The analysis of potential air quality impacts was intended to 
estimate changes in land management associated with the adoption of 
dedicated biomass energy cropping practices and to estimate changes in 
greenhouse gases (GHG) and carbon stocks associated with those changes 
in land management. The analysis considered the range of potential 
effects associated with the establishment of the dedicated energy crop 
including crop production inputs through the harvesting of the 
dedicated energy crop to the farm gate.
    The air quality analysis was developed through the output from the 
economic forecasting model associated with predicted changes in land 
management. This model (POLYSYS) is based on over 3,500 unique cropping 
practices that capture greater than 90 percent of all cropland 
production in the United States, using an annual time step and at a 
county level. When considering changes in land-use and soil carbon 
stocks, the model works at a sub-county level. The annual time step 
allows for near-term estimates of dedicated energy crop adoption and 
potential changes in GHG emissions. Changes in GHG emissions included 
upstream emissions from the production of agricultural inputs (for 
example, fertilizers, pesticides, energy for irrigation), on-site 
fossil fuel emissions, on-site soil carbon dioxide (CO2) 
emissions from organic carbon (soil organic matter and plant residue) 
and inorganic carbon (agricultural lime), and soil nitrous oxide 
(N2O) emissions.
    This method was chosen, because the economic modeling components 
within the POLYSYS model are of a spatial resolution (county) and 
temporal resolution (annual) needed to address dedicated energy crop 
adoption rates both locally and nationally. This information was used 
to assess the impact of annual adoption rates on GHG emissions. Fossil-
fuel offsets from the use of cellulosic ethanol occur outside the farm 
gate; therefore, they were not included in this analysis. Inclusion of 
fossil-fuel offsets would likely contribute to larger carbon savings 
and less net CO2 emissions to the atmosphere, than is 
accounted for in the current analysis.
    Positive changes to air quality are expected under Alternative 1. 
However, since the scope of this alternative is limited, these changes 
would not be significant. Direct impacts relate to the energy and/or 
emissions from agricultural production activities. Under this 
alternative, energy consumption within the top five regions would be 
reduced by 3,664 gigajoules (GJ) through the conversion to switchgrass 
when compared to the No Action Alternative. This energy change is 
minor, in most cases less than 0.1 percent. Carbon emissions were less 
than those of the No Action Alternative, yet small, usually less than 
0.1 percent reduction. Due to the limited scale of conversion under 
this alternative, the amount of fugitive dust emissions would be minor, 
temporary, local, and nearly equal to that of the No Action 
Alternative. Yet, over the long term, given the conversion to perennial 
dedicated energy crops and reduction tillage, there would be a 
reduction in fugitive dust emissions. These effects would be positive, 
but minor.
    Limited indirect impacts would occur from emissions from equipment 
exhaust or other mobile sources necessary for the establishment of 
dedicated energy crops. However, since machinery is already utilized on 
these fields, these impacts are similar to those of the No Action 
Alternative.
    Site-specific mitigation measures would be determined based on the 
local or regional Air Quality Control Region, as prescribed in the 
conservation plan or through local or State regulations concerning air 
emissions of criteria pollutants. Best Management Practices (BMPs) to 
reduce mobile sources include proper maintenance of equipment and dust 
suppression activities.

Soil Resources

    Under Alternative 1, a reduction in erosion from all sources is 
expected. Conversion of croplands from traditional crops to switchgrass 
is estimated to reduce topsoil loss from these acres by 0.4 inches per 
year; which equates to four inches over a ten year period. Soil carbon 
would increase between 0.2 and 10.1 percent over that of the No Action 
Alternative. Indirect impacts under Alternative 1 would be increased 
biodiversity of soil biota as a result of increased soil organic matter 
and the presence of perennial vegetation. The use of BMPs would further 
reduce the potential for soil loss. Provided established conservation 
standards, provisions and guidelines are implemented, Alternative 1 
would have no significant negative impact on soil resources.

Water Quality and Quantity

    Under Alternative 1, direct impacts to water quality are expected 
from the changes to the use of nutrients and agricultural chemicals for 
the establishment and production of switchgrass in the potential BCAP 
project locations. Decreases in the use of potassium (3.1 percent), 
lime (4.0 percent), herbicides (5.5 percent), insecticides (11.2 
percent), and other agricultural chemicals (3.6 percent) are expected; 
while the use of nitrogen (2.1 percent) and phosphorus (2.9 percent) 
within the top five project areas are expected to increase over that of 
the No Action Alternative. The overall reduction in nutrients and 
agricultural chemical, erosion, total suspended solids (TSS), and 
sedimentation would provide positive impacts on water quality from 
implementation of this alternative. However, due to the limited amount 
of acreage under this alternative, these benefits would be local.
    The change in the quantity of water required under this alternative 
would be minimal. The amount of water used for irrigation in the top 
five regions would only decrease approximately 0.25 percent over that 
of the No Action Alternative, saving an estimated 1.2 million gallons 
of water per day. When compared across all project area States, 23.6 
million gallons of water per day would be conserved. Switchgrass has a 
higher water use efficiency (WUE) than other traditional crops, and is 
highly tolerant of various water regimes and is more drought tolerant 
than traditional crops.

[[Page 66001]]

    Indirect impacts under Alternative 1 result from the reduction in 
sedimentation and nutrient and agricultural chemical deposition into 
surface water bodies that move downstream, benefiting larger water 
stream courses and regional water quality.
    To further reduce impacts to water quality, buffer strips comprised 
of mixed native species between biofuel crop fields and surface water 
bodies should be established for sediment and nutrient retention. 
Adherence to established conservation standards, provisions, and 
guidelines ensures Alternative 1 would have no significant negative 
impact on water quality.

Recreation

    Under Alternative 1 there could be localized positive or negative 
impacts on wildlife habitat, but they are expected to be small due to 
the relatively small amount of land converted to energy crops. The 
impacts to recreation involving wildlife are expected to be small 
locally and also not significant at the regional or national level.

Alternative 2 (Selected Alternative)

    Alternative 2 expands the BCAP Establishment and Annual Payments 
component, allowing anyone who meets basic eligibility requirements of 
the BCAP provisions in the 2008 Farm Bill to participate. In addition, 
existing BCFs and crops would be supported, including small and pilot 
BCFs, and all bio-based products derived from eligible materials would 
qualify under this alternative. New non-agricultural lands (for 
example, NIPF converted into herbaceous cropland) would be allowed to 
enroll and the number of cropland acres would not be capped.

Socioeconomics and Land Use Effects

    Significant changes are expected in net revenues as total revenue 
values increase more than the feedstock production costs and as 
feedstock production reduces the supply of other crops and subsequently 
increases their prices. Price increases are most significant for wheat, 
corn, and soybeans, with price changes expected to increase by 15 to 20 
percent during the period 2009 to 2023. The addition of more forestry 
resources as feedstock would reduce pressures on crop prices somewhat, 
as would any future increase in crop yields. It is expected that 
government commodity payments would increase due to the price impacts 
triggered by the increased demand for cropland.
    Overall, scientific literature and the modeling for the BCAP PEIS 
indicated that the vast majority of cropland for dedicated energy crops 
would come from cropland currently in production for traditional row 
crops and from pastureland. Additionally, recent literature indicates 
that potentially nine to 15 million expiring acres of CRP could return 
to crop production by 2025, with an estimated one million acres 
potentially being planted in dedicated energy crops. This was based on 
the probable higher value of traditional row crops without the 
incentives provided by BCAP for dedicated energy crop production. The 
impact of expiring CRP acres on total CRP enrollment would be offset 
through re-enrollments into CRP and new acres being enrolled in CRP to 
reach the 32 million acre cap as specified in the 2008 Farm Bill.
    Land use shifts, especially among the major crops, are expected 
under this alternative. The amount and type of land, both traditional 
cropland and non-cropland, converted to dedicated energy crop 
production would depend on which areas are designated as project areas. 
Modeling indicates that by 2023, planting of dedicated energy crops 
would increase production cropland by over 50 million acres, while 
resulting in a reduction in traditional cropland acreage by 
approximately 17 million acres, with corn acreage estimate to increase 
by less than one million acres. Of the estimated 350 million acres in 
current use as pastureland, approximately 34 million acres would shift 
to the production of dedicated energy crops while 15 million acres 
would shift to hay production. Overall, scientific literature and the 
modeling for the BCAP PEIS indicated that the vast majority of cropland 
for dedicated energy crops would come from cropland currently in 
production for traditional row crops and from cropland pastureland. 
Natural landscapes and native habitats and forests would be anticipated 
to have only minor conversion due to (1) the economic costs associated 
with supplying infrastructure (for example, roads, temporary irrigation 
for establishment) to those lands and (2) the restrictions inherent in 
the 2008 Farm Bill that limit and protect unique native habitats such 
as native sod, which would include rangelands that have never been in 
crop production.
    There would be both positive and negative indirect impacts from the 
establishment of dedicated energy crops which would flow through the 
rest of the economy. While payments for the establishment of dedicated 
crops is estimated to be $11 billion and the matching payments 
component of BCAP is expected to create an estimated 280,000 jobs, the 
costs associated with land use changes required to meet the demand for 
dedicated energy crops and crop residues may bring a decline of $3.2 
billion and a loss of 41,000 jobs. Overall, the total economic impact 
from implementation of Alternative 2 is anticipated to be positive with 
an estimated $88.5 billion in economic activity throughout and the 
creation of nearly 700,000 jobs.

Biological Resources

    As with Alternative 1, provided established provisions, standards, 
and guidelines (that is, BMPs similar to those used in CRP conservation 
plan) are followed and the BCAP conservation plans, forest stewardship 
plans, or equivalent plans, are adapted to resource conditions, 
Alternative 2 would have no significant negative impacts on vegetation 
or wildlife. Conversion may have both negative and positive impacts. 
The loss of forest land (for example, NIPF converted to herbaceous 
cropland) or native grasslands, not native sod (for example, CRP acres 
planted to native grass that have expired and gone back into 
production) would decrease the habitat quality for several wildlife 
species; however the effects would be limited given the minor amount of 
conversion anticipated from these land types. Yet, as described in 
Alternative 1, many of the dedicated energy crop options have a higher 
habitat quality than traditional crops. The types of impacts to 
wildlife during the establishment of dedicated energy crops would be 
similar to those described in Alternative 1; yet, with the potential to 
occur at a much broader scale. Again, the scale of this impact is 
dependent on the types and amount of land converted to dedicated energy 
crops. Negative impacts to large mammals, small mammals, reptiles and 
amphibians, and invertebrates are not expected to be significant. 
Similarly, impacts to birds are not expected to impact population 
densities. However, the largest potential negative impact to grassland 
birds would occur during conversion or harvesting activities. Provided 
these activities do not occur during the PNS, and the small portion of 
grasslands in potential BCAP project area locations, impacts to 
grassland birds are minimal.

Air Quality

    Implementing Alternative 2 on a broader scale would reduce overall 
direct carbon equivalent emissions during perennial dedicated energy 
crop

[[Page 66002]]

growth. Total energy use was approximately one to two percent higher in 
most years due to the indirect energy requirement for increased 
equipment manufacturing. Direct energy usage was either neutral or 
decreased over time. The effects of fugitive dust emissions during the 
establishment phase would be similar to those of Alternative 1. After 
establishment, fugitive dust emissions would decrease due to the 
alteration of cropping systems to perennial species. In the long term, 
these effects would be on a regional scale and would be positive. 
Indirect impacts are similar to those of Alternative 1. Site-specific 
mitigation measures and BMPs as described in Alternative 1 would reduce 
potential impacts to Air Quality under Alternative 2.

Soil Resources

    Alternative 2 would result in reductions at both the local and 
regional level of soil erosion due to the transition from traditional 
crops to perennial vegetation used for dedicated energy crops. As 
indicated in the modeling results, dedicated energy crop production 
would increase production cropland by approximately 50 million acres 
under Alternative 2, with that acreage being shift from traditional row 
crops and cropland pasture, rather than natural landscapes, native 
habitats and forests. Overall, the shift toward more perennial 
vegetation on production croplands from traditional annual row crops 
would provide benefits to soil quality and soil carbon sequestration. 
Perennial crops, and the use of corn stover and wheat straw, would 
shift away from conventional tillage to no tillage practices. This 
shifting of tillage practices on an estimated 11 million acres would 
conserve approximately 40 million tons of soil each year over that of 
the No Action Alternative. As with Alternative 1, the biological 
diversity of the soil would also increase. As with Alternative 1, the 
use of BMPs would further reduce the potential for soil loss. Provided 
established conservation standards, provisions and guidelines are 
implemented, Alternative 2 would have no significant negative impact on 
soil resources.

Water Quality and Quantity

    The direct and indirect impacts to water quality under Alternative 
2 would be similar to those described in Alternative 1. However, as the 
amount of acreage converted from traditional crops to perennial crops 
increases, the benefits to both water quality and quantity increase. 
The same mitigation methods described in Alternative 1 would reduce 
potential impacts to water quality. Adherence to established 
conservation standards, provisions, and guidelines ensures Alternative 
2 would have no significant negative impact on water quality.

Recreation

    Under Alternative 2 there could be localized positive or negative 
impacts on wildlife habitat, but they are expected to be small due to 
the relatively small amount of land converted to energy crops. The 
impacts to recreation involving wildlife are expected to be small 
locally and also not significant at the regional or national level.

Mitigation Measures and Best Management Practices

    In addition to the required BCAP conservation and/or forest 
stewardship plan (or the equivalent), all project sponsors and 
producers must follow all environmental rules and regulations as 
required through participation in other USDA programs. Each project 
proposal will be subject to NEPA analysis prior to approval. A BCAP 
Environmental Screening worksheet must be completed for each contract 
offer. This worksheet would provide the necessary environmental 
information to FSA so they can accurately and expeditiously complete an 
environmental evaluation, consistent with FSA's regulations on 
environmental quality found at 7 CFR part 799, for enrollment of a 
particular site in BCAP. This worksheet can also be used in conjunction 
with the BCAP conservation and/or forest stewardship plan (or the 
equivalent) to develop methods/activities that could mitigate any 
potential minor site specific environmental effects for individual 
producers applying to the program while still meeting the overarching 
goal of BCAP and NEPA. Prior to execution of the BCAP Project Area 
contract, NRCS or an authorized technical service provider (TSP) would 
complete a site-specific environmental evaluation that would reveal any 
protected resources on or adjacent to the proposed program lands. When 
sensitive resources, such as nesting birds, wetlands or cultural 
resources are present or in the vicinity of the proposed lands, 
consultation with the appropriate regulatory agency would occur. 
Specific mitigation measures necessary to reduce or eliminate the 
potential localized negative impacts to those sensitive resources would 
be identified. If the environmental evaluation concludes that species 
or critical habitat protected under ESA are potentially present, and 
the proposed conservation activity on the land is determined to have 
negative impacts and no alternatives exist, it is not likely the land 
would be eligible for that activity. Any mitigation measures and 
practices approved through conservation planning would be periodically 
monitored by USDA to determine the success and compliance with those 
measures.
    If through completion of the environmental evaluation, it is 
determined that there is no potential for the proposed BCAP activity to 
significantly impact the quality of the human environment, the 
environmental evaluation serves as FSA's documented compliance with 
NEPA as well as the requirements of other environmental laws, 
regulations, and Executive Orders (EOs).
    However, if after completion of the environmental evaluation it is 
determined that protected resources could potentially be adversely 
impacted, consistent with FSA's internal guidance, then no further 
action can occur until the BCAP applicant completes an EA. EAs would be 
required when the results of the environmental evaluation are unclear 
as to whether the proposed activities would significantly impact the 
quality of the human environment.
    If the EA determines that there could be a significant effect on 
the quality of the human environment then a proposed BCAP project area 
or site specific EIS could be necessary. These EISs and all EAs would 
be tiered to this PEIS consistent with 40 CFR 1508.28.

Socioeconomics and Land Use Effects

    To mitigate the socioeconomic effects of BCAP, the final rule 
provides that the eligibility for payment of vegetative wastes, such as 
wood wastes and wood residues, collected or harvested from both public 
and private lands will be limited to only those that would not 
otherwise be used for a higher-value product. This specifically 
excludes wood wastes and residues derived from mill residues or other 
production processes that create residual by-products that are 
typically used as inputs for higher value-added production. 
Additionally, industrial or other process wastes or by-products, such 
as black liquor or pulp liquor that is a waste by-product of the pulp 
and kraft paper manufacturing process, would not be included in the 
definition of biobased products because they are not significantly 
composed of organic or biological products collected or harvested from 
land. The final rule also continues the exclusion of commercially-
produced timber, lumber, wood, or other finished products that

[[Page 66003]]

otherwise would be used for higher value products. Also, urban wood 
wastes have been excluded as specified in the 2008 Farm Bill.

Biological Resources

    As specified in the 2008 Farm Bill, a conservation plan or forestry 
stewardship plan (or equivalent plan) is a fundamental component for 
ensuring appropriate and sustainable agricultural practices for 
specific programs. Consistent with accepted BMPs (for example, for CRP 
and associated programs), a BCAP conservation plan or forest 
stewardship plan (or the equivalent) that includes appropriate 
conservation practice standards and sustainable agriculture practices 
must be developed before implementation to reduce the negative impacts 
to biological resources. Dedicated energy crops should be chosen based 
on local ecosystem characteristics to minimize potential disturbance to 
native wildlife species and vegetation by providing habitats comparable 
to those found in natural habitats. Sustainable agricultural techniques 
should be used, if possible, to reduce negative impacts to biological 
resources. Specific county Natural Resources Conservation Service 
(NRCS) conservation practice standards, as well as State or county 
specific technical notes and specific guidance on mitigation measures, 
should be incorporated in the conservation plan and forest stewardship 
plan or equivalent. Applicable NRCS conservation practice standards 
should be followed on lands where conserving wildlife species is an 
objective of the landowner or forest stewardship plan. Site-specific 
environmental evaluation on the project site in conjunction with either 
informal or formal consultation with the appropriate USFWS office would 
protect species included on the endangered species list. Use of BMPs 
such as washing vehicles upon leaving and entering a work area would 
minimize the potential to spread invasive or noxious plant species.
    Other eligible crops, such as animal wastes, food and yard wastes, 
and algae, have site-specific requirements in regards to potential for 
environmental effects. To lessen potential effects associated with 
animal wastes, appropriate guidance from State and Federal regulatory 
agencies concerning confined animal feeding operation practices and 
standard industry practices associated with animal production should be 
followed to ensure that collection of materials does not adversely 
impact localized vegetation and wildlife resources through secondary 
effects associated with water and air quality.

Air Quality

    BMPs associated with dedicated energy crop production include the 
use of limited and no tillage components, which decrease the potential 
for fugitive dust emissions associated with exposed ground cover. Also, 
all producers would follow local air quality regulations, which may 
define other BMPs associated with agricultural activities, including 
transportation and chemical usage.

Soil Resources

    BMPs associated with dedicated energy crop production include the 
use of limited and no tillage components which decreases exposed ground 
cover and allows for greater retention of topsoil through perennial 
root systems. Other eligible crops, such as animal wastes, food and 
yard wastes, and algae, have site specific requirements in regards to 
potential for environmental effects. To lessen potential effects 
associated with animal wastes, appropriate guidance from State and 
Federal regulatory agencies concerning confined animal feeding 
operation practices and standard industry practices associated with 
animal production should be followed to ensure that collection of 
materials does not adversely impact soil resources through secondary 
effects associated with water and air quality.

Water Quality and Quantity

    Algae production, due to the specialized nature of the 
demonstration practices currently in effect, should move to minimize 
the use of potable water supplies, where feasible, to reduce effects on 
water consumption. BMPs for dedicated energy crop production that 
reduce the amount of agricultural chemicals used for production would 
benefit water quality through reduced transport in runoff. Also, the 
use of limited or no tillage cropping systems reduces the potential 
transported sediments by leaving ground cover on site and through the 
stability associated with perennial root systems. Agricultural 
irrigation systems are generally becoming more efficient, allowing for 
an overall reduction in irrigated water uses, and the inclusion of more 
dedicated energy crops with lower water demands and higher water use 
efficiencies would benefit water quantity by reducing the levels 
necessary for production.

Recreation

    Given the site specific nature of the BCAP project areas and the 
practices best suited to those conditions, effects to the abundance of 
wildlife for both consumptive and non-consumptive uses would vary. 
Practices that encourage more foraging habitat for game species could 
induce changes in relation to decreased traditional row crop fields; 
however, changes to pasture of hayland could indicate small adverse 
effects. As such, operators should be encouraged to comply with the 
goals for wildlife habitat enhancements associated with the 
conservation plans and forest stewardship plans, at the recommendation 
of the technical advisors (that is, NRCS and U.S. Forest Service).

Cumulative Effects--Socioeconomics and Land Use Effects

    Cumulative effects to socioeconomic conditions and land use would 
be highly dependent upon the location of the BCAP project areas and 
level of funding; however, overall the benefits associated with the 
establishment and production of dedicated energy crops should outweigh 
the losses associated with the land use shifts from traditional row 
crops. With limited funding, BCAP projects areas would be few and would 
be anticipated to provide local positive effects to the socioeconomic 
conditions from the conversion to dedicated energy crops; however, the 
effects would be balanced through the losses associated with input 
suppliers for traditional crops under Alternative 1. The limited 
funding assumption and the county acreage limitation would not induce 
national level changes in agricultural prices.
    Under Alternative 2, the greater funding for BCAP could create 
numerous BCAP project areas with the potential to affect national crop 
prices. Alternative 2 would encourage greater regionalization, which 
could encourage more land use changes to dedicated energy crops, where 
traditional row crops only produced marginally positive income streams.
    Also, the Matching Payments component has encouraged the use of 
woody biomass as a feedstock for many of the BCFs qualified during the 
NOFA period. More than 3.1 million tons of biomass was from woody 
resources during the NOFA period (85.6 percent of total biomass 
collected). Only 4.3 percent of woody resources were derived from 
Federal lands, with the remainder from non-Federal lands. During the 
short term, these resources could be an important source of

[[Page 66004]]

feedstock, until the sustainable harvest of dedicated energy crops 
would be available.

Biological Resources

    Changes to vegetation structure and type could cause potential 
negative cumulative effects on native fish and wildlife through 
fragmented, degraded, or destroyed habitats. Cumulative effects to 
wildlife would be localized and site-specific as not all species are 
harmed by conversion of land to more intensive uses. While the 
footprints of the areas considered under conversion are relatively 
small (less than one percent of the area inside the 50-mile buffer), 
potential impacts may occur if land configuration and relative location 
of converted areas combined with existing habitat fragmentation 
patterns has a multiplicative effect on the overall regional habitat 
fragmentation values. The establishment of new crops in areas 
previously fallow or cropped with a different style of agriculture may 
cause direct mortality and range shifting at the local scale of 
wildlife. The use of BMPs and environmental assessments would prevent 
and minimize significant impacts; however, fragmentation is 
unavoidable. Cumulative impacts to vegetation would occur from the 
conversion of native pastureland or native vegetation to dedicated 
energy crops. The cap on the amount of acreage that may be used for 
dedicated energy crops under Alternative 1 (that is 25 percent in any 
single county within the 50-mile radius) also is designed to reduce 
these impacts. Similarly, because of the limited funding that would 
only provide for a limited number of BCFs, the amount of land that 
potentially would be converted is negligible.
    Direct impacts to wildlife would occur by conflicts with haying 
machinery that may result in mortality. Under Alternative 1, direct 
impacts are expected to occur during the establishment and harvest 
stages of BCAP crops; yet, these impacts are expected to be short-term 
and localized. These habitat changes would impact such aspects as food 
availability, type and quantity of cover for escape and breeding, and 
the availability of adequate nesting sites. Wildlife in lands adjacent 
to the dedicated energy cropland may either be positively or negatively 
impacted depending on the habitat quality provided by the biofuel 
crops.
    Cumulative effects through implementation of Alternative 2 would 
lead to direct and indirect impacts to vegetation and wildlife at a 
regional scale. As with Alternative 1, direct impacts are not expected 
to impact wildlife at a population level; however, the significance of 
indirect impacts are dependent on potential land use changes. The 
quantity and habitat quality of any land converted from native grasses, 
forest land or pastureland for dedicated energy crops would determine 
the level of cumulative impacts. Under Alternative 2, depending upon 
the level of land use changes, the cumulative impacts to vegetation and 
wildlife could be significant.
    No cumulative impacts under the No Action Alternative would occur 
as the program would not convert land from one use to a dedicated 
energy crop.

Air Quality

    In general, the maturation of the biofuels and bioenergy industries 
should result in significantly positive energy balance in relation to 
first generation biofuels and bioenergy supported by grain feedstocks 
and fossil fuels. With a limited level of BCAP funding that would only 
provide for two commercial-scale facilities, the range of potential 
cumulative effects would be broad depending upon the location of the 
facilities. However, it was estimated that the BCAP program would 
generate net energy savings and greater soil carbon sequestration as 
lands are converted to dedicated energy crops. The effects were 
estimated to only be locally or regionally significant and not 
nationally significant.
    Cumulatively, under Alternative 2, the unlimited funding of the 
BCAP to support all scales of BCFs could lead to national level 
effects, such as a decline in soil carbon sequestration due to an 
increased use of crop residues to meet the Energy Independence and 
Security Act of 2007 (EISA) volume requirements. It could be surmised 
that under Alternative 1, to meet EISA requirements there would be a 
greater use of first generation biomass (that is, corn) and second 
generation biomass (that is, agricultural crop residues) than from 
Alternative 2, given the potential funding difference between the two 
alternatives. This would indicate that the greater use of crop residues 
for biofuels feedstock could reduce soil carbon levels below currently 
seen in traditional row crops where the crop residues remain. However, 
in the analysis it was assumed that EISA targets could not be met under 
Alternative 1 as indicated by the anticipated waivers for production 
under the base scenario.
    Overall, it was indicated that soil carbon would increase under 
Alternative 2, as traditional row crops were replaced with perennial 
dedicated energy crops; however, in combination with EISA requirements 
for advanced biofuels percentages, traditional sources (for example, 
corn and crop residues) would be required in combination with BCAP 
project areas to meet the overall demand. It was estimated that there 
would be benefits from the conversion of lands associated with total 
carbon flux and overall energy use, but there would also be negative 
effects from the greater use of residues, which would generate 
additional GHG emissions and reduce soil carbon sequestration. In the 
longer term, as more acreage is planted to dedicated energy crops and 
regionally competitive crops (that is, SRWC), there would be some off-
set from the anticipated soil carbon losses associated with residue 
removal and use.
    Overall, the discussion of the EISA RFS2 program within the BCAP 
PEIS, including the characterization of indirect land-use impacts and 
GHG emissions, is appropriate given the limited overlap between the two 
programs. While both programs generally support the Administration's 
goals to expand domestic bioenergy production and consumption and 
decrease reliance on fossil fuels, BCAP supports a broader range of 
bioenergy conversion technologies as well as biobased products, which 
the RFS2 does not incentivize.

Soil Resources

    The implementation of BCAP would generate positive effects from a 
reduction in soil erosion and increased soil carbon sequestration from 
the conversion of Title I crops to perennial dedicated energy crops. 
The conversion to a perennial dedicated energy crop provide greater 
soil retention due to anticipated cropping practices and the plant 
structure holding soil in place.
    Under Alternative 1, with the limited BCAP funding, the benefits 
associated with reduced soil erosion would be only locally significant 
and would provide for positive changes to water quality, soil organisms 
biodiversity and overall biological diversity.
    Under Alternative 2, depending upon the level of agricultural crop 
residue use to meet EISA requirements, the effects could be either 
insignificant or significant, cumulatively. When combined with the U.S. 
Forest Service measures to increase woody biomass utilization for 
bioenergy, there may be short term increases in soil erosion from 
forest lands in some regions; however, these should be minimal if 
harvest and management BMPs are implemented per the forest stewardship 
plan or the equivalent, and all applicable Federal, State, and local 
harvest regulations.

[[Page 66005]]

Also, in some regions, soil erosion on forest lands would be 
insignificant due to the species and understory cover provided. The 
increased use of crop residues is anticipated to lead to changes in 
cropping practices, which should provide greater soil cover by standing 
crop residues and reduced tillage practices to promote residues use.

Water Quality and Quantity

    The conversion to a perennial dedicated energy crop provides 
greater water use efficiency than traditional row crops such as corn. 
This conversion would be anticipated to limit runoff from agricultural 
fields and potential need for irrigation past the initial establishment 
period. Under Alternative 1, with the limited BCAP funding, the 
benefits associated with increased water quality and decreased water 
quantity would be only locally significant and would provide for 
positive changes. Under Alternative 2, depending upon the level of crop 
residue use, the effects could be either insignificant or significant, 
cumulatively. The implementation of BCAP would generate positive 
effects from (1) a potential reduction of irrigated cropland acres, (2) 
greater water use efficiency on non-irrigated and irrigated acreage, 
and (3) a general reduction in agricultural chemical use from the 
conversion of Title I crops to perennial dedicated energy crops.
    The majority of water consumption associated with corn-based 
ethanol is from irrigation to grow the crop. A potential reduction in 
the amount of irrigated acres would reduce the total water consumption 
to produce ethanol. Also, studies have indicated that conversion of 
biomass at co-generation or combined heat and power (CHP) power plants 
for electricity is more efficient in the reduction than conversion into 
transportation fuels. However, water consumption for this use should 
also be considered. Other studies indicate that traditional liquid 
biofuels used as a fuel source for power generation are the most water 
inefficient when compared to traditional fuels, such as natural gas, 
which was the most water efficient.

Recreation

    Impacts to recreation could be positive or negative based on the 
locality for BCAP project regions. However, they would be small 
regionally and nationally under either alternative and would not 
substantively or cumulatively change the recreational aspects of 
participation in wildlife activities.

Basis for the Decision

Proposed Action

    Alternative 2 is selected as the alternative to implement the 
Proposed Action. Alternative 2, the Selected Alternative, complies with 
the 2008 Farm Bill, provides FSA flexibility in terms of program 
implementation and development of a sustainable industry, and is the 
most balanced approach to achieving long-term program goals, while 
being consistent with the intent and language of the 2008 Farm Bill. 
The No Action Alternative was used as an analytical baseline. 
Alternative 1 provided for a targeted application of the BCAP; however, 
this alternative was restrictive in the types of potential sized 
facilities that could participate in the program, thus limiting the 
overall scope.
    The broader scope of implementation, as analyzed under Alternative 
2, would have the potential to open new non-agricultural lands (that 
is, NIPF) into dedicated energy crop production, which, if the effects 
were unmitigated could create losses of biodiversity at a regional 
scale. However, conversion from non-agricultural lands should be minor, 
since modeling results indicated that the majority of the cropland for 
dedicated energy crops would be converted from traditional row crops 
and pastureland. Also, the use of the BCAP conversation plan and forest 
stewardship plan (or the equivalent) would avoid and mitigate those 
effects through appropriate BMPs and sustainable practice approaches. 
No significant impacts would occur from implementation of the Proposed 
Action and no adverse cumulative impacts are expected. Potential 
negative impacts would be minimized by employment of site-specific 
environmental evaluations prior to contract approval, BMPs, 
incorporation of practical mitigation measures in the BCAP conservation 
plan or forest stewardship plan (or the equivalent), and, if indicated, 
EAs would be tiered to the Final PEIS for those areas requiring further 
NEPA analysis prior to contract approvals, consistent with 40 CFR 
1508.28.

BCAP Components

    BCAP is divided into two distinct components as specified in the 
2008 Farm Bill. The Matching Payment component was determined to be 
largely mandatory and non-discretionary in nature. Implementation of 
the Establishment and Annual Payment component required an exercise of 
discretion by the Secretary of Agriculture. The separation of the two 
components in the 2008 Farm Bill and the mandatory nature of the 
Matching Payments allowed for the NOFA to be used to initiate that 
component before final rule-making on the entire BCAP. An appropriate 
comment period and inclusion of the reference to the BCAP Establishment 
and Annual Payments components PEIS, which included the Matching 
Payments component in the cumulative effects analysis, made inclusion 
of the Matching Payments component as part of the alternatives analysis 
for BCAP PEIS unnecessary per standard, as such with the publication of 
the Final BCAP PEIS, this analysis including the cumulative effects 
would be complete. The range of reasonable alternatives, given the 
geographic scope of the analysis, provided valid consideration of the 
scale of the program with unlimited funding authorized for both the 
Matching Payments component and the Establishment and Annual Payments 
component of BCAP in the 2008 Farm Bill.

Geographic Scale and Approach to the Analysis

    The geographic scale of potential BCAP project area sites 
encompasses the entire United States and its territories and as a 
result land use changes, farming practices, weather conditions, soil 
types, water resources, natural ecosystems, and economies vary widely 
at the site-specific level. Therefore, the PEIS assessed the potential 
impacts of implementing the Establishment and Annual Payments component 
of BCAP on a broad scale that required that certain assumptions be made 
to assess the impacts of the program.
    Since the BCAP supports the production of dedicated energy crops, 
the analysis focused only on the potential impacts associated with crop 
production and not the impacts associated with conversion of biomass 
into various types of energy (that is ethanol, electricity, burning for 
combined power and heat, etc.) since the intent of the program was for 
the successful establishment of dedicated energy crop production 
throughout the United States, which could be used in a myriad of end 
product components based on the facilities available to the producers. 
The PEIS evaluated the impacts of establishing a bioenergy crop (on 
BCAP eligible lands) and managing, and transporting to a BCF a specific 
crop from each of the three broad classes of cellulosic energy crops 
(woody crops, perennial herbaceous, and annual herbaceous). Hybrid 
poplar and willow (woody species), switchgrass (perennial herbaceous 
species), and forage sorghum (annual herbaceous species) were chosen

[[Page 66006]]

because they have the most widely available data; it is feasible that 
they can be established within the time frame of the program, and 
represent likely energy crops that would be grown for biofuels/
bioenergy across varied regions of the United States. These 
representative dedicated energy crops in no way represent the entire 
range of possible bioenergy crops that could qualify as an eligible 
crop under the BCAP. The production of switchgrass, forage sorghum, 
hybrid poplar, and willow utilize agricultural practices that are 
similar to those used in traditional crop agriculture with some 
variations in equipment and techniques. Production operations and 
multi-year characteristics for each selected bioenergy crop would vary.
    Although algae is an eligible crop under the Establishment and 
Annual Payments Program component of BCAP, it currently is not 
considered likely to be commercially feasible and suitable for 
inclusion in a BCAP project area by the end of fiscal year (FY) 2012, 
the expiration of the authority for BCAP. As such, algae as an eligible 
crop is briefly discussed, but is not included in the detailed analysis 
within this document.
    Additionally, existing forestry resources on NIPF would be eligible 
for the Annual Payments. These resources are identified by approximate 
locations throughout the United States through association with private 
forest lands as detailed within the Forest Inventory and Analysis data 
publicly provided by the U.S. Forest Service.

Model Development and Approach

    To determine the potential locations for BCAP projects based on 
prevailing economics of dedicated energy crop production, a model-based 
approach was used, which contained information on prevailing cropland 
uses, factors of production for an herbaceous energy crop (that is, 
switchgrass), factors for the use of crop residues as a bioenergy 
feedstock, and transportation costs. The model currently incorporates 
switchgrass and residues (crop and forestry) as feedstock for BCF. 
However, it is important to note that switchgrass can be seen as a 
generic dedicated energy crop which would represent the land use 
requirements implicit in the use of other energy crops for which data 
is not readily available. The use of switchgrass as a model crop 
representing other dedicated energy crops, could underestimate the 
production potential of feedstock that has a yield that could be 
significantly larger than switchgrass, and consequently underestimate 
the potential of specific regions of the country as candidate locations 
for potential BCAP projects locations. In an effort to address those 
shortcomings, the model was complemented with preliminary data in an 
effort to include poplars, willows, and forage sorghum as eligible 
crops.
    The analysis included prices for switchgrass ranging from $35 to 
$80 per dry ton. The $60 per dry ton analysis provided a good regional 
coverage of feedstock potential supply for herbaceous perennial and 
annual crops, and consequently was selected to perform the GIS analysis 
to locate the potential BCAP projects; while $70 per ton was needed for 
poplars and $90 per ton for willows. The analysis assumed that farmers 
or land owners would receive $45 per ton in payment through BCAP plus a 
match from the plant demanding the cellulosic feedstock. This 
assumption was made based on the information provided in the 2008 Farm 
Bill and the Matching Payments component of the BCAP NOFA. It was 
assumed that producers would receive this matching payment for two 
years from the first date of delivery of feedstock to a BCF.
    The model was developed to first determine approximate project 
locations based on the regional availability of feedstock and price 
levels. Then through the use of Geographic Information System (GIS) 
program and land use data at the county level, areas were identified 
that had the potential for higher feedstock concentrations. The 
analysis incorporated projected land use and proprietor income changes, 
government payment changes, along with an increase in transportation 
and the development of a dedicated energy crop. The approximate 
predicated project locations were developed for each of the proxy 
feedstocks analyzed. These predicted project locations were then used 
for each of the resource areas to determine potential impacts, both 
positive and negative, from the alternatives.
    Under Alternative 2, funding for BCAP was assumed to be unlimited 
and a driving factor was to produce enough biomass feedstock to meet 
the demands of EISA (that is, approximately 15 billion gallons of 
advanced biofuels). The analysis for Alternative 2 was conducted at 
both a regional and the national level. The analysis focused on the 
impacts to net farm income; farm prices; government payments; land use 
shifts; and direct, indirect, and induced economic impacts as a result 
of changes in the aforementioned variables. To model this, POLYSYS was 
used to estimate the quantity and price of feedstock necessary to 
achieve the EISA targets through 2023. To meet the Department of Energy 
(DOE) goals of $1.76 per gallon of ethanol and $51 per dry ton of 
herbaceous feedstock by 2012, the role, size, and funding of a 
potential expanded BCAP was estimated, based on the estimated prices of 
feedstock. The analysis assumed that farmers or land owners would 
receive $45 per ton in matching payments through BCAP in addition to 
payment from the plant demanding the cellulosic feedstock. This 
assumption was made based on the initial matching payments distribution 
as described in the 2008 Farm Bill and implemented in the NOFA. This 
analysis for Alternative 2, built on the models developed for 
Alternative 1, which analyzed a suite of specific potential project 
areas.

Resource Specific Attributes

    Based on the model results, assuming unlimited funding for the 
Establishment and Annual Payments component, the Proposed Action would 
create a balance of the objectives and goals of the program (that is, 
create the framework for a dedicated energy crop production industry in 
the United States) with overall natural and human-built environmental 
benefits, while minimizing potential negative effects through a 
comprehensive project area proposal process and site-specific 
environmental evaluation of each contract holding.
    Overall, air quality; soil resources; and water quality and 
quantity; would have benefits from either alternative with Alternative 
2 providing for greater effects given the overall potential size of the 
program. It was estimated that there would initially be greater adverse 
effects, though not significant, during the establishment phases; 
however, after initial establishment there would be greater amassed 
benefits from a greater reduction in soil erosion, more soil carbon 
sequestration, and reduced irrigation demand for perennial dedicated 
energy crops, including SRWC over more land areas.
    Socioeconomic effects and land use changes would initially have a 
decline in economic activity within certain sectors (that is, services 
for traditional row crops) as a shift occurs into dedicated energy 
crops; however, a new equilibrium would be reached as those traditional 
row crop sectors convert into supporting dedicated energy crops. 
Through the analyzed period (2009 to 2023) the overall balance for 
socioeconomics and land use would be positive economic activity in 
excess of $88 billion with the potential for an increase in crop prices 
over the period by greater than 15 percent. There would

[[Page 66007]]

be the potential for regional effects to biological resources, however, 
it would be limited by the anticipated minor amount of conversion of 
non-agricultural lands (for example, NIPF converted to herbaceous 
cropland) and native grasslands, not native sod (for example, expired 
CRP acres that had been planted to native grass) to dedicated energy 
crops; however, those effects could be avoided and minimized through 
the use of accepted BMPs and BCAP environmental screening. On balance 
the Proposed Action, with the BMPs and practical mitigation measures 
associated in the BCAP conservation plan or forest stewardship plan (or 
the equivalent) in conjunction with project level NEPA analysis and the 
site-specific environmental evaluations prior to accepting contact 
holdings, would create a beneficial environment for the establishment 
of long-term dedicated energy crop industry in local and regional areas 
based on their unique dynamics, while growing those crops in a diverse 
and environmentally sustainable manner.

The Decision

    FSA would implement the Selected Alternative as described in this 
ROD. This alternative provides overall benefits to the environment, 
allows for flexibility in implementation, and follows the intent and 
language of the statute when compared to the other alternatives 
analyzed. FSA would ensure impacts are minimized by employment of 
appropriate practice standards in conservation plans and forest 
stewardship plans (or equivalent), site-specific environmental 
evaluations prior to each approved contract, and supplemental EAs or 
EISs for those areas requiring further NEPA analyses.
    After the publication of the Final PEIS on June 25, 2010, the later 
enactment of the 2010 Supplemental Appropriations Act (Pub. L. 111-212) 
on July 29, 2010, provided a limitation of funding for BCAP of 
$552,000,000 in fiscal year 2010 and $432,000,000 in fiscal year 2011. 
FSA does not have the authority to limit the scope of BCAP to a smaller 
or more restrictive program than the 2008 Farm Bill authorizes, except 
as may be needed to confine the program within these newly provided 
spending limits. Consistent with 40 CFR 1502.9, FSA has determined that 
a Supplemental PEIS may be required for changes to BCAP.

    Signed in Washington, DC, on October 19, 2010.
Carolyn B. Cooksie,
Executive Vice President, Commodity Credit Corporation and 
Administrator, Farm Service Agency.
[FR Doc. 2010-26872 Filed 10-22-10; 11:15 am]
BILLING CODE 3410-05-P
```