Revitalizing The Farm Economy Via Renewable Energy Development

From BioCycle
Journal of Composting &Organics Recycling
October 2001, Page 27

2002 FARM BILL
REVITALIZING THE FARM ECONOMY VIA RENEWABLE ENERGY DEVELOPMENT
How bioproducts and biomass can be vital parts of the solution to meet our nation’s energy needs, mitigating global climate changes and revitalizing our rural communities.
Jeremy Ames and Carol Werner

A NEW sustainable economy is slowly emerging, an economy which will rely increasingly on renewable sources of energy such as wind, solar, geothermal and biomass. Farmers can be at the forefront of this revolution; utilizing the commodities they grow, and even the waste streams they now must dispose of, in innovative new ways to produce power, transportation fuels, and a new generation of biobased products and chemicals. Linking agriculture and renewable energy is key to diversifying our energy market, protecting our environment, and revitalizing rural America — truly a “win-win-win” opportunity that is good for American farmers and good for the country.

Increasingly, we rely on imported oil to produce the fuels that power our nation, including our farms. Currently the United States imports more than 50 percent of its oil, which accounted for approximately one quarter of the 2000 trade deficit at over $100 billion. At this level of dependence, we have little control over oil prices, which consumers have seen fluctuate unpredictably in recent years. World production of oil is predicted to peak between 2010-2020, which will lead to sharp price increases in years to come. Yet if the full environmental and social costs were factored into the market price, oil would be considerably more expensive.

Agriculture can be an important part of the solution to meeting our nation’s energy needs, mitigating global climate change, and revitalizing our rural communities. The benefits of bioenergy were recognized in Title III of the Agricultural Risk Protection Act of 2000 and Executive Order 13134 which set the goal of tripling the use of biofuels and biobased products by 2010. By utilizing the renewable resources on America’s farmland, we can generate electricity, fuel our vehicles, and create a variety of products, all of which can provide new revenue streams to farmers.

Tremendous untapped renewable resources exist throughout the country. Biomass, defined as any organic matter available on a renewable basis, is one such resource. Burdensome waste streams can be converted into revenue streams, including crop residues, animal manure, forestry residues, and segregated organic municipal wastes. Over one billion tons of waste are produced annually by the farming sector.

Another method of biopower production is the anaerobic digestion of animal manures. Animal wastes, particularly in large-scale livestock operations, are usually stored in “lagoons,” which often leak and contaminate groundwater, and release vast amounts of methane, a natural by-product of decay and a very potent greenhouse gas (GHG). Anaerobic digesters are a viable alternative, wherein the manure is stored in an enclosed tank to facilitate its partial digestion by anaerobic bacteria. The methane emitted is captured and burned to produce on-farm heat, and in larger scale operations, electricity that can be sold on the grid. The solid by-products of anaerobic digestion are ideal for fertilizer or for the production of biobased products.

BIOFUELS AND BIOBASED PRODUCTS

As explained in an accompanying article in this section on renewable energy, biofuels — such as ethanol and biodiesel — can be mixed with petroleum fuels in smaller percentages and used in standard engines, or be used in higher percentages as stand-alone fuels in modified engines. Research is being conducted to bring down the costs of utilizing cellulose, a complex molecule found in the cell walls of all plants, to produce ethanol. This would allow conversion of crop residues, forestry residues, segregated organic municipal wastes, and energy crops into ethanol. According to the Argonne National Laboratory, cellulosic ethanol could achieve over a 100 percent reduction in GHG emissions compared to petroleum, because less energy is needed to produce the feedstock (little or no cultivation and few inputs) and the CO2 emitted is reabsorbed by plants, making the process a closed carbon cycle. Cellulosic ethanol could be produced throughout the country, creating new revenue streams for farmers — just as the starch ethanol market has in the Midwest — while allowing us to lessen our dependence on foreign oil and reduce our GHG emissions.

Biodiesel is a relatively new biofuel. It can be produced from soybean oil, other oilseeds, or even waste oils (e.g. restaurant frying oil). According to the Department of Energy, biodiesel reduces GHG emissions up to 80 percent on a life-cycle basis. In addition, biodiesel contains no sulfur. Like ethanol, biodiesel production can provide a new revenue stream for farmers while meeting multiple environmental and energy goals.

Just as petroleum revolutionized the lives of Americans in the last century, biomass can do the same in this century. Essentially any product that can be derived from petroleum can also be produced from biomass. This includes chemicals, polymers, adhesives, textiles, packaging materials and any number of other products. Producing biobased products in conjunction with biofuels and other useful coproducts in a “biorefinery” facility, similar in concept to a petroleum refinery, can lower production costs. Biorefineries can be established by farmer-owned cooperatives, creating new revenue streams for farmers, and new jobs for rural communities.

POLICY RECOMMENDATIONS

Many opportunities exist for integrating renewable energy development into the 2002 Farm Bill. But for farmers to utilize their renewable resources, they must first know what those resources are, their extent, and economic value. Partnerships should be formed with state and local governments and universities to do regional Renewable Resource Assessments. Farmers must be provided education and technical assistance, given access to the local electrical grids, and be provided with the initial support needed to get these ventures off the ground. Research and development must go forward to bring down costs, and discover new innovative and economical ways to produce energy and products from agricultural commodities and waste streams. At the same time, there must be ongoing market development work done for these products.

The Environmental and Energy Study Institute (EESI) in Washington, D.C. provided policy recommendations for the 2002 Farm Bill in a report issued in early September. The following are some of those recommendations for existing programs:

Conservation Reserve Program — CRP is the largest of the Farm Bill conservation programs, with a current enrollment cap of 36.4 million acres (equivalent in size to the state of Iowa). Its mission is to preserve land vital for soil conservation, water quality protection, and wildlife habitat. EESI recommends adding renewable energy production to those goals that would: Permit the growing of biomass crops, and the harvesting of biomass, for the production of biopower, biofuels, and biobased products, on CRP lands with an appropriate reduction in rental payments. The rental reduction should not be so high as to cancel any incentive for a farmer to undertake a biomass project.

Natural Resource Conservation Service — NRCS manages most of USDA’s conservation programs, and provides farmers with technical assistance to better manage their natural resources.EESI recommends that NRCS give a higher priority in awarding Environmental Quality Incentives Program (EQIP) contracts to producers who propose to convert animal waste operations over to anaerobic digestion systems for the capture and burning of biogas to produce heat and electricity.

Rural Business-Cooperative Service — RBS provides financial and technical assistance to establish and sustain agricultural cooperatives. EESI recommends that the mission of RBS should explicitly state that farmer owned cooperatives are a crucial component of renewable energy development and that it provide grants and loan guarantees to establish cooperatives or expand existing cooperatives to undertake wind, biopower, biofuel, and bioproduct development projects; and Give priority funding to proposals that aim to produce several marketable products in the same integrated facility, such as a biorefinery.

Biomass Research and Development Initiative — A multiagency effort to coordinate and accelerate all Federal biobased products and bioenergy research and development, as outlined in the Biomass Research and Development Act of 2000 and Executive Order 13134. EESI recommends that the Farm Bill fully fund the Biomass Research and Development initiative at its authorized level of $49 million a year, as authorized in the Biomass Research and Development Act; and Extend the initiative from 2005 to 2010, conducting a review in 2005 to determine which areas of research have proved the most promising.

Land-Grant Universities — These public institutions should expand the mission of the Cooperative Extension Service (CES) for the development of renewable energy resources on America’s farmland. The universities should provide funding to CES for education and technical assistance to farmers and farmer-owned co-ops for development and marketing of renewable energy resources, including biomass, wind, solar and geothermal. The CES should also conduct outreach to the general public on the societal benefits of developing these resources.

The proposed Sun Grant Initiative would create a network of regional centers at the Land Grant Universities to coordinate and fund research and outreach for the development of biopower, biofuels and biobased products.

The CES should work in close collaboration with the Regional Biomass Programs, sponsored by the Department of Energy. Together, the organizations should provide assistance to farmers for growing, handling, and processing energy crops and waste streams for the production of biopower, biofuels and biobased products. Where possible, the two organizations should share resources, staff and expertise.

NEW PROGRAMS

EESI also recommends that some new programs related to renewable energy be developed as part of the 2002 Farm Bill. These include:
Renewable Resource Assessment — Provide grants within the Fund for Rural America or other programs to state and local governments, universities, or the CES to do renewable resource assessments on agricultural lands. Farmers, cooperatives, and economic development agencies cannot develop their renewable energy resources without first identifying the kind, extent, and economic value of those resources. Using national assessment data conducted by the National Labs as a guide, state and local governments can inventory their regional renewable energy resources. These should include wind, solar, geothermal, and biomass, including waste streams. The information should be available to the public. Funding should also be provided to do the necessary environmental assessment before developing an identified resource.

Renewable Portfolio Standard — Establish a national Renewable Portfolio Standard that will require 20 percent of power generated in the United States by the year 2020 to be derived from nonhydro renewable energy sources. This ensures a market for renewable power, critical to the development and use of renewable energy across the country and on America’s farms.

Renewable Fuels Standard — Establish a national Renewable Fuels Standard that would require an increasing percentage of transportation fuel sold in the United States to be renewable biofuels, such as ethanol and biodiesel. The RFS should contain a credit trading system to allow refiners, blenders, and retailers to buy and sell credits from each other to meet their content goals. The RFS should also contain an incentive to expand the production of cellulosic ethanol.

Carbon Sequestration Pilot Projects — Atmospheric carbon can be sequestered in the soil and plant biomass. Carbon sequestration can play a role in helping mitigate global climate change. However, present technologies for measuring and monitoring carbon storage in soils and plant biomass are in their infancy. EESI recommends that the USDA conduct a series of carbon sequestration pilot projects throughout the country, with the goal of better quantifying the level of carbon stored, the degree to which variability, saturation and permanence play a role in sequestration. These projects should work with private farmers and foresters to determine which practices and technologies have the greatest potential, and should examine both the planting of crops and trees and agricultural practices such as no-till agriculture. The Forest Service should continue its work in this area, and provide technical assistance and expertise to private foresters.

Establish Federal Purchasing Programs — Executive Order 13134 and the Agricultural Risk Protection Act of 2000 set the goal of tripling the use of biofuels and biobased products in the United States by 2010. We recommend establishing a purchasing requirement for all federal government agencies and contractors that sets increasing percentages for purchase of biofuels and biobased products consistent with the above goals. We also recommend a federal Renewable Portfolio Standard requiring agencies to purchase no less than 10 percent nonhydro renewable power by 2010, and 15 percent by 2015.

Carol Werner, executive director, and Jeremy Ames are with the Environmental and Energy Study Institute (EESI) based in Washington, D.C. (www.eesi.org) This paper is excerpted from an EESI Policy Report on the 2002 Farm Bill. Founded in 1984 by a bipartisan group of Members of Congress, EESI is a nonprofit, nonpartisan organization with the mission of promoting development of public policy options that will sustain people, the environment and natural resources. Carol Werner is on the editorial board of BioCycle. The report can be found online at www.eesi.org/publications/farm bill policy paper.pdf

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