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The New Harvest: Biofuels and Wind Power for Rural Revitalization And

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The New Harvest: Biofuels and Wind Power for Rural Revitalization And THE NEW HARVEST: Biofuels and Windpower for Rural Revitalization and National Energy Security PREFACE This report is a product of The McKnight Foundation-Energy Foundation Upper Midwest Clean Energy Initiative. Funded by The McKnight Foundation of Minneapolis, Minnesota, this initiative is focused on helping the Midwest become the world leader in state-of-the art wind power and advanced technologies for producing biofuels—liquid fuels from crops and agricultural waste. Managed by the Energy Foundation, this initiative supports policy analysis, model policy development, and decision-maker education efforts that advance clean, renewable energy technologies. The goal is to bring the rural economic development, oil security, and environmental benefi ts of such clean energy technologies to the Midwest, and, by example, to the world. For more details and grant guidelines, see www.ef.org THE NEW HARVEST: Biofuels and Windpower for Rural Revitalization and National Energy Security Patrick Mazza, Research Director, Climate Solutions/ Harvesting Clean Energy Network Eric Heitz, President, Energy Foundation © November 2005 This document may be reproduced without permission for any educational, non-commercial, purpose. Acknowledgements: The authors would like to thank the numerous farm, energy, national laboratory, and university experts who provided comments on this paper. THE NEW HARVEST TABLE OF CONTENTS INTRODUCTION: Growing U.S. Agriculture into a Leading Energy Producer ...5 CHAPTER ONE: The Energy Security Challenge ......................10 CHAPTER TWO: Biofuels—The New Gasoline .........................14 CHAPTER THREE: Wind Power—A Profi table New Crop ...................31 CONCLUSION: A New Opportunity for America’s Farmers ..............47 Cover Photos: Top: Getty Images, Mohave Desert wind farm, left center: DOE/NREL, Jim Yost, Corn stover ready for harvest bottom right: DOE/NREL, Warren Gretz, Harvesting Iowa switchgrass Graphic Design: KLH Design, www.klh-design.com Printing: Lithtex Northwest, 100% recycled paper 4 Biofuels and Windpower for Rural Revitalization and National Energy Security INTRODUCTION: GROWING U.S. AGRICULTURE INTO A LEADING ENERGY PRODUCER Providing liquid fuels and electric power from American farmlands is a win-win-win for rural economies, national energy security, and the environment. Rural America needs new economic development opportunities. At the same time, America faces the challenge of obtaining the affordable, reliable, and clean Royal Raymond’s Eastern Oregon wheat and cattle energy needed for economic growth. Global ranch now also produces a harvest of wind power. oil supplies are stressed, increasingly costly Credit: Don Cresswell, East Oregonian and, coming substantially from volatile regions, subject to both natural and human- caused disruptions. Natural gas, which has development produces new income streams provided clean electrical power generation for farm communities and, by displacing oil over the past decade, has recently tripled in and natural gas imports, improves U.S energy price. Fast-growing economies like China and security. Renewable electrical power India are increasing world-wide oil and gas generated by wind farms and clean biofuels demand, suggesting that oil and natural gas derived from crops, now just niche players prices will not return to their low 1990 levels. in the U.S. energy picture, can provide a And with only three percent of world oil and signifi cant share of American energy demands. natural gas reserves, America has no These advanced clean energy technologies long-term prospect to produce its way—through can make the Ag-Energy sector a new engine drill rigs or off-shore oil platforms—out of of economic growth, tipping rural economies dependence on increasingly tight world from economic stress to prosperity. This paper energy markets. outlines the promising new technologies—and America’s rural landscape is the place to policies to rapidly commercialize them—that substantially address both rural economic can grow a new Ag-Energy harvest that benefi ts and national energy challenges. Clean energy the whole nation, especially farm communities. 5 THE NEW HARVEST Abundant, economical biomass resources are available across much of the U.S. Credit: DOE/NREL Two new markets show the most promise for current Persian Gulf imports. This could be transforming America’s fertile and productive accomplished with only a modest increase farm belts into national energy suppliers: in cropland as part of a system that also generates the food and fi ber America needs. Biofuels made from grains and Advanced biofuels made from cellulose, of vegetable oils now supply around two percent which most of the plant world is constituted, of the nation’s light-duty vehicle fuel. Studies will unlock this promise. Cellulose offers by leading national research institutions show vastly larger and less expensive feedstocks that biofuels, when teamed with more effi cient than grains. With policies to commercialize vehicles and smart growth, could virtually the fi rst billion gallons of capacity on the replace gasoline use in light duty vehicles by ground by 2015, a burgeoning cellulosic 2050. That would displace nearly eight million ethanol industry could add $5 billion to barrels of oil daily, more than three times our farmer profi ts by 2025. 6 Biofuels and Windpower for Rural Revitalization and National Energy Security Map shows major U.S. land-based wind power reservoirs on the Great Plains and in mountainous regions. Credit: DOE/NREL Wind Power, still generating of U.S. power supplies by 2020. Key policies under one percent of U.S. electricity, is the include renewable energy standards, world’s fastest growing energy source with production tax credits, and policies to ensure vast, untapped potential. Rural landowners adequate transmission as the “road to are earning around $2,000-$5,000 per turbine market” for new wind power. The Great Plains annually leasing land to wind developers and have the largest land-based wind prospects, even greater returns are possible with local but wind farms now operate in 26 states ownership. Wind farms are also a tax revenue from Vermont to Tennessee to Oregon. and employment boon to rural counties. New research shows vast areas of the U.S. could The agricultural and environmental produce wind power at costs competitive with communities, sometimes at loggerheads, coal and natural gas electricity. With the right are converging on a vision for the farm sector policies, wind growth could provide 10 percent as a major energy producer. Farm leaders 7 THE NEW HARVEST “The development of alternative energy sources is not only signifi cant to the advancement of American agriculture, but also is vital to enhancing our nation’s security.” —American Farm Bureau Federation President Bob Stallman understand Ag-Energy represents a major Ag-Energy sector. From their beginning new market opening for U.S. agriculture. ethanol incentives have drawn vital support from the agricultural community. Recently “Renewable energy means new commodities, farm support for clean energy has witnessed a whether it’s ethanol, biodiesel, wind or signifi cant upsurge. Over the last two years a methane,” Iowa Farm Bureau Commodity long list of farm groups has stepped up to Services Coordinator Denny Harding says. support renewable energy policies, including “We look on energy as a growth sector for Farm Bureaus, Farmers Unions, and agriculture. The technology just keeps getting commodity groups.1 better. The economics are looking better all the time.” The American Farm Bureau Federation and National Farmers Union, along with commodity “When we look at what renewable energy groups representing corn, soybean, sorghum, can do for the rural communities we see it sunfl ower and canola producers rallied behind as a great economic development factor,” 2005 Energy Bill passage of a national Rocky Mountain Farmer’s Union President Renewable Fuels Standard (RFS). The RFS John Stencel notes. requires 7.5 billion gallons per year in the Colorado Farm Bureau National Affairs national fuel mix by 2012. At the state level Director Tracee Bentley comments, “Our farmers have united with nontraditional allies farmers are interested in diversifying, and such as environmentalists to pass such most of our renewable energy potential is policies as a Minnesota RFS, increased in on farm land.” 2005 to an unprecedented-for-the-U.S. 20 percent. Farm groups are central to national “Idaho would see a tremendous benefi t and state coalitions for the renewable energy from generating our own electricity with the standards, productions tax credits, and other abundant wind, geothermal and biomass policies to commercialize wind. resources we have right here,” Idaho Farm Bureau Federation President Frank Priestley But for the most part these efforts have taken says. “Not only are these clean, renewable place in different silos, and have focused on ways to provide for our future needs, but immediate policy gains rather than a longer- they will allow farmers and ranchers the term vision. Now many both from and beyond opportunity to receive benefi ts.” the farm community have sighted the opportunity to take farm-produced energy to Farm groups have long engaged in political the next level. For instance, the Ag-Energy efforts for public policies to build the 1 Farm Groups Pushing for Renewable Energy Standards, Harvesting Clean Energy Issue Brief, Climate Solutions, August 2004, www.harvestcleanenergy.org 8 Biofuels and Windpower for Rural
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