Most federal legislators want to enact fiscal incentives to produce more biofuel crops, particularly cellulosic ethanol. But in an era of fiscal belt-tightening, the question remains — how?

If South Dakota Republican Sen. John Thune has his way, there will be incentives for farmers to produce switchgrass, fast-growing trees and other cellulosic crops and to deliver them to an emerging network of cellulosic ethanol plants.

Cellulose is the woody fiber that accounts for a plant’s hardness.

While virtually every bioenergy specialist readily concedes the vast potential for cellulose, the challenge has been finding a way to break down this woody fiber into sugar to make the ethanol. Until now, the technological hurdles have been high and costly, forcing most energy entrepreneurs and venture capitalists to opt for corn, which, for now, is a more convenient ethanol source.

Under Thune’s bill, the U.S. Department of Agriculture would target feasibility studies to biorefineries with the best prospects for success. The USDA’s formula would be based on the likelihood of construction of a biorefinery, the local potential for bioenergy crop production, the number of farmers likely opting to raise these crops and the biorefinery’s economic impact.

The bill likely would fund 10 to 12 feasibility studies, costing about $50,000 each. If a project is approved, farmers then would be entitled to enroll enroll eligible land in the program.

During the contract’s first five years, while biorefinery construction ensues and the cellulosic crop is established, farmers would receive a cost share and a per-acre rental payment. Once biorefinery production begins, rental payments would end and farmers then would receive matching payments of $45 for each ton of delivered biomass for the next two years.

Thune is convinced that incentives such as these are the only way for cellulose to attain its potential as the basis for the next generation of renewable fuels. In fact, Thune believes this sort of jump start is essential “if we are serious in this country about reducing our dependence on foreign oil.”

In the view of Mark Hall, the Alabama Cooperative Extension System’s renewable energy expert, that’s just what the industry needs — a jump start. If one or more of these jump starts ultimately succeeds and cellulosic biorefining becomes a common practice, Hall says Alabama farmers could reap huge benefits.

“Alabama constitutes a treasure trove of cellulosic energy when we finally figure out how to capitalize on this type of energy,” Hall says, citing the state’s long growing seasons and usually ample rainfall as key factors.

Even in periods of prolonged drought, as Alabama is experiencing now, cellulosic crops would be more adaptable than the crops commonly grown in the state.

“It will grow when we get rain, but it won’t die when the rain stops,” Halls says.

In addition to offering more cropping options, cellulosic crops such as switchgrass will put Alabama farmers in a more ideal economic position.

“Americans have been used to cheap food and high energy prices for a very long time,” Hall says.

From the farmer’s standpoint, cellulosic crop production would turn the current status quo inside out — not necessarily a bad thing, Hall says. Instead of raising feedstocks for cheap commodities, he says farmers would begin growing crops for one of the most expensive commodities on the market — energy.