Thicke unveils forward-looking energy policy for agriculture

Francis Thicke, the Democratic candidate for secretary of agriculture, announced a "comprehensive energy policy for agriculture" that would increase the use of renewable energy in the agriculture sector, with a focus on systems that "put profits in farmers' pockets." Corporate agriculture interests have often demonized environmentally friendly energy policies as bad for farmers, but Thicke points out that farmers are currently vulnerable to volatile energy costs. I've posted his full statement on the energy policy after the jump, but I want to highlight a few parts:

As a state, we currently have no plans for how to power agriculture beyond fossil fuels, leaving us vulnerable to the effects of escalating and widely fluctuating energy prices. In 2008, oil prices rose to $147 per barrel, but within seven months fell to less than $34. This wild fluctuation whipsawed agriculture. Fertilizer and fuel prices tripled; corn prices spiked and fell sharply; ethanol plants went bankrupt.

Oil economists tell us that repeated cycles of price spikes followed by precipitous price falls are the future for energy costs as long as we are dependent on fossil fuels.ii  Even the U.S. military warns that oil prices will rise greatly, and we should expect oil shortages in the near future.iii

Our current biofuel production is not targeted to secure the energy future for agriculture. We use about a third of our corn crop to produce ethanol, but use it for cars driving on highways, not to power agriculture. Iowa farmers are selling corn as an energy crop at cheap commodity prices while paying high retail prices for the fuel needed to power their farms.  Biofuels today make only a dent in total U.S. fuel needs,iv but could go a long way toward making agriculture energy self-sufficient.

Thicke also advocates stronger policies to encourage wind energy production, not only looking at the total megawatts generated, but at wind energy systems that would create wealth for farmers and rural communities:

Today, 20 percent of the electricity generated in Iowa comes from wind power. That is good. However, the next generation of distributed wind systems holds promise to put more of the wealth created into the pockets of farmers and increase the amount of wind energy that can be distributed through the existing electrical grid.

When farmers lease out land to put corporate-owned wind turbines on their farms, they still pay retail rates for the electricity they use to power their farms. In other words - like with biofuels - farmers sell cheap and buy high.

The next generation of wind power should be mid-sized wind turbines on farms all across Iowa, so the wind that blows over the farm will power the farm, and the wealth created will be retained on the farm. This kind of distributed wind power has several advantages:

  1. The wealth created by the wind turbines is retained by the landowner and stays in the local community,

  2. The electricity generated is used locally, avoiding the need to build new transmission lines, and

  3. Distributed wind turbines will more fully utilize wind fronts as they move across the state, compared to when most wind farms are located in a few places in the state.

Policies the Legislature could enact to hasten the development of mid-sized wind turbines on farm across Iowa include mandatory net metering for all Iowa electrical utilities and feed-in tariff (FIT) policies. FIT policies have been used successfully in Europe to encourage the rapid expansion of solar-powered systems.

I urge the Iowa Legislature to adopt a FIT policy targeted to small and mid-sized wind turbines that are owned by Iowa farmers and landowners. The FIT policy would require electrical companies to pay a high rate of return per kWh for the initial years of the lifetime of targeted wind systems. That will allow farmers and landowners to pay for the wind systems during those initial years. After the specified initial time period, the rate of pay will drop to wholesale rates. That will allow the power company to buy cheap, green energy for the remainder of the lifetime of the turbine, and allow the farm wind turbine to continue to generate electricity to power the farm and to serve as a profit center for the farm.

Feed-in tariffs have been successful in many other places, and there's no reason not to use them in Iowa. Getting the policy through the Iowa legislature would be an uphill climb no matter which party was in control, however.

Thicke rolled out his energy policy this morning in Des Moines. He has public events scheduled later today in Cedar Rapids and Waterloo, September 23 in Dubuque, Davenport and Iowa City, and September 24 in Council Bluffs and Sioux City. I hope the media will cover his ideas, because they have potential to make farming more profitable while reducing greenhouse gas emissions. It's too bad that neither the current Secretary of Agriculture, Republican Bill Northey, nor his predecessor, Democrat Patty Judge, took the initiative on reducing our agriculture sector's reliance on fossil fuels.

Statement of September 22, 2010

Thicke: Iowa agriculture vulnerable to volatile

oil market, must begin orderly transition now

Iowa Secretary of Agriculture candidate Francis Thicke (pronounced TICK-ee) today announced comprehensive energy policy for agriculture that shifts new public incentives to wind and biofuel systems that 1) Produce energy to power agriculture, 2) Are farmer-scale and farmer-owned, and put profits in farmers' pockets, and 3) are truly sustainable and renewable. His statement follows:

Iowa agriculture is highly dependent on fossil fuels. Oil prices - which set the pace for other fossil-fuels - will rise sharply as world oil production peaks.i Our agriculture is vulnerable because it is dependent on cheap oil, and we are at the end of the cheap-oil era. That is a prescription for disaster for Iowa agriculture.

As a state, we currently have no plans for how to power agriculture beyond fossil fuels, leaving us vulnerable to the effects of escalating and widely fluctuating energy prices. In 2008, oil prices rose to $147 per barrel, but within seven months fell to less than $34. This wild fluctuation whipsawed agriculture. Fertilizer and fuel prices tripled; corn prices spiked and fell sharply; ethanol plants went bankrupt.

Oil economists tell us that repeated cycles of price spikes followed by precipitous price falls are the future for energy costs as long as we are dependent on fossil fuels.ii  Even the U.S. military warns that oil prices will rise greatly, and we should expect oil shortages in the near future.iii

Our current biofuel production is not targeted to secure the energy future for agriculture. We use about a third of our corn crop to produce ethanol, but use it for cars driving on highways, not to power agriculture. Iowa farmers are selling corn as an energy crop at cheap commodity prices while paying high retail prices for the fuel needed to power their farms.  Biofuels today make only a dent in total U.S. fuel needs,iv but could go a long way toward making agriculture energy self-sufficient.

Producing Energy for Agriculture

Exciting biofuel technology is developing rapidly today to make bio-oil from plant biomass. Bio-oil can be turned into diesel fuel and gasoline, which can be used to power agriculture. One promising feature of bio-oil production is that it can be done on a much smaller scale than today's predominant model for biofuel production, which is the large-scale corn ethanol plant.

Purdue University researchers (and others) are working on mobile bio-oil production facilities in which bio-oil production systems can be taken to locally stockpiled biomass, instead of having to haul large volumes of low-density biomass to central processing facilities.  Small-scale production of bio-oil, and mobile bio-oil production facilities, mean that bio-oil production can be done at a scale that can be owned or controlled by farmers, so the profits of bio-oil production will go into the pockets of farmers.

Another advantage of the technology of bio-oil production is that any biomass material can be used as a feedstock. The ideal biomass source will be prairie plants or other high yielding perennial crops which - compared to annual row crops - provide greater protection of the soil from erosion and from leaching of nutrients to water resources. Also, using perennial crops for biomass avoids the energy costs of planting crops annually, and minimizes or eliminates pesticide and fertilizer needs. As a result, net energy production from perennials is greater.

How to Get There from Here

Iowa has invested a lot of public money in subsidies and tax credits for building corn ethanol plants, which has resulted in some economic development and expanded markets for corn. However, the ethanol industry expanded to the point that now the livestock industry feels threatened by how much corn is being diverted to ethanol production. Livestock commodity organizations have taken a stand against renewal of the Volumetric Ethanol Excise Tax Credit (VEETC) and the import tariff on foreign ethanol.v  Overbuilding of the ethanol industry also contributed to bankruptcy of many ethanol plants when market conditions became unfavorable. In short, the biofuels industry has gotten out of balance.

I do not support the abrupt ending of ethanol subsidies, as the livestock industry has proposed, because that will jeopardize both the markets for Iowa crop producers and the extensive investment of public money that went into building the ethanol industry. If the rug were suddenly pulled out from under the ethanol industry, it could implode.  Rather, I think we should look for middle ground that serves the interests of both the livestock and ethanol industries. I would urge the U.S. Congress to renew the tax credits for ethanol production, but look to phase them out over time, as the ethanol industry becomes self-sufficient.

Developing the Next Generation of Biofuels in Iowa

I propose that the Iowa Legislature end subsidies and tax credits for building new corn ethanol plants in Iowa so that when the next cycle of high oil prices comes, the ethanol industry has less incentive to go into another round of overbuilding. Instead, I urge the Legislature to redirect whatever public funds can be made available to the Iowa Power Fund for rapid development of the next generation of biofuel systems in Iowa that: 1) Produce fuel to power agriculture, 2) Are designed to be built at a scale that can be farmer-owned or farmer-controlled, so the profits go into the pockets of farmers, and 3) Are truly sustainable and renewable.

Developing the Next Generation of Wind Systems in Iowa

Today, 20 percent of the electricity generated in Iowa comes from wind power. That is good. However, the next generation of distributed wind systems holds promise to put more of the wealth created into the pockets of farmers and increase the amount of wind energy that can be distributed through the existing electrical grid.

When farmers lease out land to put corporate-owned wind turbines on their farms, they still pay retail rates for the electricity they use to power their farms. In other words - like with biofuels - farmers sell cheap and buy high.

The next generation of wind power should be mid-sized wind turbines on farms all across Iowa, so the wind that blows over the farm will power the farm, and the wealth created will be retained on the farm. This kind of distributed wind power has several advantages: 1) The wealth created by the wind turbines is retained by the landowner and stays in the local community, 2) The electricity generated is used locally, avoiding the need to build new transmission lines, and 3) Distributed wind turbines will more fully utilize wind fronts as they move across the state, compared to when most wind farms are located in a few places in the state.

Policies the Legislature could enact to hasten the development of mid-sized wind turbines on farm across Iowa include mandatory net metering for all Iowa electrical utilities and feed-in tariff (FIT) policies. FIT policies have been used successfully in Europe to encourage the rapid expansion of solar-powered systems.

I urge the Iowa Legislature to adopt a FIT policy targeted to small and mid-sized wind turbines that are owned by Iowa farmers and landowners. The FIT policy would require electrical companies to pay a high rate of return per kWh for the initial years of the lifetime of targeted wind systems. That will allow farmers and landowners to pay for the wind systems during those initial years. After the specified initial time period, the rate of pay will drop to wholesale rates. That will allow the power company to buy cheap, green energy for the remainder of the lifetime of the turbine, and allow the farm wind turbine  to continue to generate electricity to power the farm and to serve as a profit center for the farm.

Act Now to Avoid Crises

Energy costs will be a game-changer for Iowa agriculture. It is not a matter of whether energy prices will increase. It is a matter of whether we will have the foresight to plan ahead and create an orderly transition to less reliance on fossil fuels - or if we will be thrown into chaos, fuel shortages, and possible food shortages because we waited too long to make the transition.

FRANCIS THICKE BACKGROUND:

   Francis Thicke has been a full-time farmer for 27 years, is a scientist with a Ph.D. in agronomy/soil fertility, and has worked in the past at the USDA in Washington, D.C., where he served as National Program Leader for Soil Science. A frequently consulted national expert on agricultural sustainability, Thicke and his wife, Susan, own and operate an 80-cow organic, grass-based dairy near Fairfield, where they process milk on the farm into bottled milk, yogurt and cheese marketed locally through Fairfield grocery stores and restaurants. For additional information on his campaign for Iowa Secretary of Agriculture, go to www.ThickeForAgriculture.com.

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