If the Bay region can take the lead in developing the "next generation" of biofuels, it may be able to help farmers, forest owners, rural economies and the Chesapeake, all at the same time, according to a new report.

The report envisions a future in which farmers will grow towering stands of biomass-producing plants or fast-growing trees and sell those products to refineries that produce biofuel which will, in turn, help wean the nation from imported oil.

Meanwhile, the extensive root systems of certain biomass plants will absorb nutrients and stabilize sediment that would otherwise reach streams, and ultimately, the Bay.

Likewise, forest land owners could supplement their incomes by selling "slash"-branches and other debris left after harvest. In some areas, that material is simply burned as a means of disposal. The extra profit could help keep forest land from being sold.

"Today, the Chesapeake Bay region has an unprecedented opportunity to take the lead in a new era of energy production that could produce a wealth of positive impacts for our economy, farms and families, as well as our forests, rivers and the Chesapeake Bay," summed up the report, "Next-Generation Biofuels: Taking the Policy Lead for the Nation," which was produced by the state of Pennsylvania and the Chesapeake Bay Commission.

Its assessment was echoed by speakers at a Chesapeake Bay summit on cellulosic biofuels that met Sept. 4 in Harrisburg, where the report was released.

"I don't know of another group around the United States that is so organized at this level," said Chris Somerville, director of the Energy Bio Sciences Institute at the University of California-Berkeley, a national leader in biofuels research.

The Earth receives 10,000 times more energy from the sun each year than all of human energy uses, Somerville said. The trick is finding a way to harness it. Biofuels is one of those ways, but Somerville cautioned they are "just one of many technologies that we need to put in place to really address the issue."

Biofuels, though, represent a unique opportunity to mesh a national priority-reducing reliance on imported oil-with Bay cleanup efforts.

"The Chesapeake Bay biofuels effort is very, very important, not just for this region, but for the entire nation," said retired Vice Admiral Dennis McGinn. Now a senior advisor to the American Council Renewable Energy and an international security senior fellow at the Rocky Mountain Institute, McGinn called the nation's reliance on oil as a "clear and present danger" which presents military, economic and diplomatic problems.

Besides what consumers pay at the pump, gasoline costs roughly another $2.50 a gallon in indirect costs, such as maintaining military strength required to secure oil supply lines, he said. Meanwhile, a million dollars leave the nation's economy every minute to purchase oil from foreign sources.

The move to biofuels is a "win- win-win" solution, McGinn said, because it reduces dependence on oil, improves energy and economic security and can help the environment. "We need to get started now," he said.

The first steps could come at this year's Chesapeake Executive Council meeting, set for Nov. 20. States have already agreed to develop biofuels action plans by mid-October that follow up on the 20 specific recommendations made the report.

The Executive Council is the top policy-making panel for the Bay cleanup and includes the governors of Maryland, Virginia and Pennsylvania; the mayor of the District of Columbia; the EPA administrator; and the chairman of the Chesapeake Bay Commission, which represents state legislatures.

"We've queued up a lot of ideas," said Ann Swanson, executive director of the Chesapeake Bay Commission. "But if leadership is really going to occur, then the states really need to step up to the plate and make these recommendations a reality."

Regionally, the emphasis on next- generation biofuels stems from concerns that arose last year when record-high corn prices, spurred in part by increased ethanol demand, caused a surge in corn planting in the watershed.

"First-generation" biofuels can come from a variety of grains, but the vast majority comes from corn, which can degrade water quality in rivers, streams and coastal waters unless aggressive action is taken to curb runoff.

Corn can lose more nitrogen than almost any other crop; up to 30 pounds or more per acre. Scientists say a sharp increase in corn production within the watershed could result in millions of additional pounds of nitrogen reaching the Bay, where it contributes to algae blooms and poor water quality.

That concern is not limited to the Bay. Scientists blamed nitrogen losses from the surge of Midwest corn production last summer for playing a role in this year's near-record "dead zone" in the Gulf of Mexico, which covered 8,000 square miles.

Corn-based ethanol also takes so much energy to plant, harvest and distill that it provides little more energy than it takes to produce. Studies vary, but generally indicate that it also provides little, if any, net reductions in greenhouse gas emissions. The commission's first biofuels report, published in 2007, reported that a gallon of corn ethanol, when compared to gasoline, represents a 22 percent reduction in greenhouse gas emission, compared with cellulosic ethanol at 91 percent.

Those issues drove interest both in the region, and nationally, toward using next-generation material for ethanol and other biofuels, which can often be grown with less environmental impact and produce more fuel per acre. Most of that emphasis is placed on cellulosic sources for ethanol such as perennial grasses, crop residues and woody material, although next- generation biofuels may also come from sources such as manure and even municipal waste.

Converting cellulosic sources to biofuel requires extra steps in production compared with corn, which makes it less cost-effective, but hundreds of billions of dollars of research is under way which aims to change that in the next few years.

Right now, the report said, there are 55 pilot plants and early commercial ventures under construction in the United States focused on using cellulosic ethanol. Six are in Bay states, including three in New York, two in Pennsylvania and one in Maryland.

Next-generation biofuels are also being pushed by the National Renewable Fuel Standard, which was established in the energy bill Congress passed in 2007. It called for biofuels to supply 36 billion gallons, or 20 percent, of the nation's transportation fuel by 2022, and sets escalating annual targets for each year. This year, 12 billion gallons are to come from corn and similar products, and 950 million gallons are to come from next- generation biofuels.

But the proportion of next-generation biofuels in the mix increases each year, All biofuel growth after 2015 is expected to come from cellulosic ethanol.

At the Executive Council meeting last year, Pennsylvania and the Chesapeake Bay Commission pledged to take the lead in exploring the region's potential for cellulosic biofuel production. Their report was developed with input from a 22-member advisory panel drawn from state and federal agencies, agricultural groups, the biofuel industry, conservation organizations and universities.

It concluded that the region has a big advantage because it has little investment in current corn-based ethanol facilities. That makes it is easier to invest in technologies that turn cellulosic material into fuel.

Further, it is located close to refineries where the ethanol can be blended with gasoline, and close to major East Coast markets. The six states in the Bay watershed use 13.3 percent of the gasoline, 11.8 percent of diesel fuel and 43.3 percent of home heating oil consumed in the nation.

The region's climate and soils are also conducive to growing a wide variety of "feedstocks" for biofuel production. Potential feedstocks include perennial grasses such as switchgrass, which only need to be planted once yet can be harvested annually. They also need little if any fertilizer, resist drought and have extensive root systems that control erosion and absorb nutrients.

A report from the commission last year, "Biofuels and the Bay," estimated that growing 300,000 additional acres of corn to meet ethanol demand could result in 5 million additional pounds of nitrogen runoff a year.

But converting 300,000 acres of farm land to switchgrass, primarily from hay fields and pastures, could reduce nitrogen runoff by 8.3 million pounds. A million acres of switchgrass could reduce nitrogen runoff by 25.4 million pounds.

Other potential cellulosic material includes corn stover (stalks and other plant parts left after harvest), forest slash (limbs and other woody material left after harvest), miscanthus (an extremely fast-growing perennial grass native to Asia), and fast- growing trees such as poplars and willows.

The ability to use agricultural byproducts and grow crops of perennial grasses on marginal farmland has the potential to "move farming in the region from a chronically low-margin sector of the local economy into an area of sustainable growth and value-added opportunities," the report said.

A move to cellulosic feedstocks could also provide new incentives to farmers that would help the Bay. The stems of wheat and barley, which can be planted as a cover crop in the fall to absorb excess nutrients left by corn or soybeans, could also be used as cellulosic ethanol.

That would give an economic incentive to plant cover crops instead of relying on state or federal subsidies. "We're talking about very real economic returns that will motivate farmers to plant winter cover crops," Swanson said.

Taking advantage of the region's position, the report said, requires a coordinated set of actions at both the state and regional level. That includes policies, including tax incentives, that encourage the development of cellulosic biofuels in the region and its use.

That also requires refineries for next-

generation ethanol, and adequate roads in rural areas to haul feedstocks to refineries and then to blending facilities where it is mixed with gasoline. Further, the report said, incentives are needed to encourage gas stations to install "blender pumps," which allow drivers to select higher mixes of ethanol.

The report said incentives are needed for gas stations to install such pumps along selected transportation corridors to ensure the availability of higher blends of ethanol for new flex-fuel vehicles, which can burn mixtures of up to 85 percent ethanol, rather than the standard 10 percent. Such a corridor is being created along Interstate 65 from Indianapolis to Mobile, AL.

State legislation can require that certain percentages of the ethanol used in gasoline come from cellulosic ethanol, and provide incentives to people who buy cars that burn higher mixes of ethanol. A new Pennsylvania law, for instance, increases the proportion of ethanol that must come from cellulosic material as in-state production goes up.

The report suggested that state agencies lead the way by converting their fleets to vehicles that can burn higher blends of ethanol.

But efforts should encourage all next-generation biofuels, not just ethanol. The report noted that helping farms and others to install burners that use biofuels not only produces energy, but encourages farmers to ramp up feedstock production that could eventually help supply ethanol refineries. Pennsylvania already has a program "Fuels for Schools and Beyond," which does just that.

Biofuels could have some downsides, the report cautioned, and state and regional efforts are needed to ensure those efforts are addressed. Some nonnative species used for biomass could become invasive and crowd out native plants, so research is needed to determine whether some plants should be avoided.

Protocols are needed to ensure any land converted to biomass production does not lead to environmental problems.

"If perennial grasses are grown on highly erodible lands, we need to be sure that they are not exacerbating the erosion, but rather are serving the beneficial purposes that we think they can provide," said Bill Matuszeski, a consultant who worked on the report and the former director of the EPA's Bay Program Office. "But anything you are going to be cultivating on highly erodible lands, even if it is a perennial crop, requires some care in making sure that you are not exacerbating erosion problems."

Likewise, if corn stover is being used as a source of cellulosic biofuels, care must be taken that enough of the stalk is left on the ground to prevent erosion and protect the soil.

A recent report from the Pennsylvania Department of Conservation and Natural Resources expressed concern about using slash from recent harvest sites because the removal of additional material could have significant adverse impacts on forest soils and wildlife habitat.

Any forests harvested specifically for biomass should leave enough material behind to perform those ecological functions, or it would jeopardize the long-term sustainability of the forest, the DCNR report said. It suggested that woodlands damaged by insect infestations or other natural events may be best suited for biomass removal. It also recommended against switching any existing forest land into biomass plantations.

The report, "Next- Generation Biofuels: Taking the Policy Lead for the Nation," can be found on the Chesapeake Bay Commission's web site at www.chesbay.state.va.us.

Recommendations from the Next- Generation Biofuels Report

Regional Actions

  • Coordinate regional efforts to secure federal funding for biofuels through the Farm Bill and other federal programs.
  • Coordinate regional input on U.S. Department of Agriculture conservation programs that promote sustainable feedstock production and harvest. For example, the region could promote efforts that open some conservation lands to biofuels production as long as conservation goals for that land would continue to be met.
  • Discourage the use of invasive nonnative feedstocks. The region should agree to a long-term protocol that discourages the introduction and use of invasive nonnative species as feedstocks for next-generation biofuels.
  • Encourage local or on-farm use of biomass. Using biomass for combustion and gasification at the local or farm level should be encouraged both as an energy source and to help build the regional market and infrastructure for cellulosic biofuels.
  • Develop a regional carbon trading strategy that addresses biofuels. For example, efforts are needed to better quantify the potential for various feedstocks to sequester carbon in this region so that farmers growing them receive credit in future cap-and-trade programs.
  • Coordinate as a region to affect national energy policy. The region's congressional delegation and state legislatures should collectively push to ensure that the nation's energy policy places emphasis on cellulosic biofuels, including subsidies that level the field with other fuels until they become cost-effective and can compete in the marketplace with petroleum fuels.
  • Establish a regional analytical framework for biofuels development that would analyze the region's potential for feedstock productions, limitations such as water supply, competing land uses, infrastructure needs, and other issues as well as potential economic benefits to provide accurate and reliable information to decision makers.
  • Establish a regional strategy to encourage greater use of higher blends of biofuels. This could include incentives to purchase vehicles that use higher blends and the installation of blender pumps, which allow consumers to select higher blends of biofuels.
  • Establish regional research priorities for next-generation biofuels for research institutions, such as quantifying potential nitrogen reduction and carbon sequestration capabilities of various fuels, as well as techniques to improve feedstock varieties.
  • Implement a regional outreach effort to promote next-generation biofuels to ensure that the national and global markets are aware of the advantages of the Chesapeake region to produce the next generation of biofuels, such as its the ability of its climate and soil to grow a diverse number of feedstocks.

State Actions

  • Communicate consistent messages about the benefits of next-generation biofuels to the public, including cellulosic biofuels, and the importance of their sustainable production to help counter public confusion about differences between biofuels.
  • Encourage winter cover crops as the first-generation feedstocks, such as hulless barley, during the transition to advanced biofuels as they can help reduce erosion and nutrient loss from fields and boost farm income.
  • Assure the broad and effective use of best management practices for growing and harvesting feedstocks to reduce environmental impacts and loss of habitat.
  • Establish or update state removal guidelines for crop residues and forest slash and provide incentives for their adoption. Crop residues such as corn stover and forest slash left after harvest hold great potential for cellulosic biofuels, but excess removal could impact long-term soil quality, erosion control, wildlife habitat and nutrient loadings to streams.
  • Provide incentives for creating and implementing forest management plans for any forest landowner who provides biomass or fast- growing trees for biofuel feedstock to help ensure long-term sustainability. Unique forests with important conservation, historic and social values should be preserved.
  • Encourage the sustainable production of next- generation feedstocks on abandoned or underused land such as reclaimed mine land or unused farm land. The extensive root structure of perennial plants allow them to grow on marginal lands with limited fertilizer and other inputs where traditional row crops would be difficult to maintain.
  • Ensure that the nursery and seed industry has adequate supplies of seed and plant stocks to support biofuel feedstock production.
  • Facilitate the production and purchase of biofuels through consumer incentives and infrastructure development. A viable biofuel industry requires adequate road systems to deliver feedstocks to refineries and biofuels to blenders. Blending pumps need to be made available at gas stations so consumers can purchase higher mixes of biofuels. States can provide incentives for the purchase of vehicles that use higher blends of biofuels, as well as purchase those vehicles for their own fleets.
  • States should make creative use of their economic development programs to support the development of feedstocks and refining facilities for next-generation biofuels.
  • Focus support on small, first-stage operations such as pilot plants for advance biofuels. Many existing federal programs focus either on research, or full-scale production.