Missouri-based MFA Oil Company, a farmer-owned cooperative, has partnered with Aloterra Energy to form a biomass venture.
This MFA press release says the new company, MFA Oil Biomass LLC, will pay about 1,700 family farmers to grow miscanthus for use as a biomass fuel and possibly ethanol in the future:
[T]he 2008 Federal Farm Bill created the Biomass Crop Assistance Program (BCAP), a federally‐funded initiative that encourages the development of renewable energy sources. MFA Oil Biomass will synergistically combine the benefits of growing miscanthus as a renewable energy source with the BCAP incentives that encourage farmers to grow a biomass crop.
“After researching several biomass crops, including switch grass and giant reed, we decided Miscanthus giganteus provided the best opportunity for creating a viable energy source,” explains MFA Oil Co. President Jerry Taylor. “As good fortune would have it, Aloterra had done its own research and had come to the same conclusion.”
“Initially, we plan to pelletize the miscanthus output for power generation,” says Scott Coye‐Huhn, director of business development for Aloterra Energy. “However, the possibility of using it to produce ethanol in the future is vast, since it is projected to produce three times more gallons of ethanol per
acre than corn.”
The first priority for MFA Oil Biomass is to secure BCAP funding. Under current guidelines, BCAP will reimburse farmers up to 75 percent of planting costs and pay an annual rent payment while farmers wait for their crops to mature. Once the crops mature, farmers will be eligible to receive two years of matching payments for their tonnage, up to $45 per ton beyond the selling price. Land that is currently in the Conservation Reserve Program (CRP) is excluded from the program.
So far, MFA has signed up about 250 farmers to grow more than 12,000 acres of miscanthus and hopes to eventually have that number up to 150,000 acres.