Energy and Climate- Solutions from the Land
Nuffield Australian Farmers ConferenceMarch 8, 2010
Ernie Shea25x’25 Project Coordinator
Formed through a grant from the Energy Future Coalition
Organized to explore agriculture and forestry’s role in energy production
Evolved to now include a diverse collection of agricultural, forestry, conservation, environment and business organizations and leaders
25x’25: a National Alliance
New Energy Future
Fossil fuel resources are finite and diminishing
Global energy consumption is increasing (nearly 60% by 2030)
The world population is growing (9.1 billion by 2050)
Fast-developing economies like India and China are demanding more resources
Greenhouse gas emissions are increasing (World carbon dioxide emissions expected to increase by 1.9% annually between 2001 and 2025)
By the year 2025, America’s farms, ranches and forests will provide 25 percent of the total energy consumed in the U.S. while continuing to produce safe, abundant and affordable food, feed and fiber.
Our Vision:
25x’25
This is a food, feed, fiber and fuel vision, that is economically viable for our society.
With emerging technology we can produce multiple commodities.
2004 2025
5.74 QuadsRenewable Energy
99.7 QuadsTotal EnergyConsumed
31.7 QuadsRenewable Energy
127.0 QuadsTotal EnergyConsumed
25x’25 is a BIG goal:
We will meet this goal by:Producing transportation fuels
Harnessing wind energy
Converting biogas emissions
Capturing solar, hydro, and geothermal energy
Providing biomass for generating heat and power
25x’25 Future
A 25x’25 Energy Future Means:
$700 billion in annual economic growth
4-5 million new jobs
100 billion gallons of domestic biofuels
15.45 quads of renewable electricity
1 billion ton reduction in GHG emissions
Governors’ Endorsements
State Legislature Resolutions
Passed by Congress as part of HR6
Signed into law by President Bush on December 19, 2007
25x’25 is now a national renewable energy goal!
Critical Challenges & Opportunities• Biofuel pushback
• Sustainability issues
• Woody biomass contributions
• Role of agriculture and forestry in a reduced carbon economy
Copenhagen Statement
“Forestry and agriculture are where poverty reduction, food security and climate change come together and must be addressed in an integrated fashion”……
(key message to negotiators from the ag and forestry communities, COP 15, Dec. 14, 2009)
25x’25 Carbon Work Group
Charge: analyze agriculture and forestry’s role in a reduced-carbon economy and develop recommendations for how each sector can capitalize on efforts to reduce and capture carbon and greenhouse gas emissions.
Areas of Focus
Ag and forestry impacts and opportunities;
Mechanisms to manage GHG emissions;
How ag and forestry could best participate in emerging carbon markets; and
Guiding principles and policy imperatives
Carbon Work Group Key Findings
• Agriculture and forestry are uniquely positioned to deliver low-cost, near term and valuable solutions from the land:
–Energy and national security–Economic development–Environmental services–Energy efficiency
• Under the right policy platform agriculture and forestry have much to gain from this opportunity.
Ag and forestry- responsible for 7 percent of total U.S. GHG emissions
Electric Power Industry
34%
Transportation28%
Industry19%
Agriculture7%
Commercial6%
Residential5%
U.S. Territories1%
Source of U.S. GHG Emissions by Sector
Electric Power Industry
Transportation
Industry
Agriculture
Commercial
Residential
U.S. Territories
Source: EPA 2007
Have the potential to offset 10 - 25 percent of total annual U.S. GHG emissions
Ag Reduction OpportunitiesSequestration
Conservation tillage and crop rotations Cover crops Grazing practices Biochar
Avoided emissions Biofuel production Thermal bio-power and bio-heat Renewable electrical power
Emission reductions Manure management Fertilizer practices
Carbon Policy Imperatives
Economically viable
Include emission reductions, biological sequestration and avoided emissions
Be outcome oriented and technology neutral
Must be enforceable and allow ag and forestry to deliver reductions
Recognize early actors
Primary Challenges• Costs
– Changes in operating practices– Tracking and selling offsets– Increased input cost (esp. fuel and fertilizer)
• Getting the correct enabling policy in place• Development of viable markets• Informing ag and forest sectors of opportunities,
challenges, alternatives and consequences• Shaping our own destiny
America is on a path to a low-carbon energy future that aims to:
improve national security
strengthen the economy
contribute positively to the quality of life
provide a cleaner environment
What is taking us there?
Administration’s Energy Goals
Congressional Actions
EPA Actions
Supreme Court and Federal Appeals Court Actions
Congressional Action
• Waxman-Markey (June ’09)
• Kerry- Boxer (Sept. ’09)
• Stabenow “CEPA”
• Kerry-Lieberman-Graham bill
• Collins-Cantwell Cap and Dividend bill
• Energy- only approach
Unresolved Policy Issues
Carbon price mechanism
Renewable Energy Incentives (RES)
Transmission Upgrades
Definition of eligible biomass
Indirect land use issues
Costs and impacts to economy
Nukes and Clean Coal
Where are we?
• Renewable energy now 10.5 percent of total U.S. energy production
• Sheen on “bioenergy” solutions is fading;• Policy makers focusing on “ultra cleans”• Ag is a divided house; defensive strategies• Food, feed, fiber, energy and climate challenges
not being managed in an integrated fashion.• Lack a comprehensive national energy plan
What’s coming?
• Pressure to deliver sustainable energy solutions will increase
• Climate change challenges will escalate
• $2 trillion global clean energy market
• China is rushing to capture this market
• Emerging opportunity to be compensated for environmental services
Potential Gross Revenue
$24.69
$61.72
$3.53$8.82
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
$80.00
1% 3% 5% 7% 9% 11% 13% 15% 17% 19% 21% 23% 25% 27% 29%
Total Potential Revenue from Emission Reductions
(US $ Billion)
Percent of Total U.S. Emission Reductions from Agriculture and Forestry
Potential Gross Revenue for Agriculture and Forestry Sectors
Total Revenue @$35 a Ton (US $ Billion)
Total Revenue @ $25 a Ton (US $ Billion)
Total Revenue @ $15 a Ton (US $ Billion)
Total Revenue @ $5 a Ton (US $ Billion)
Source: EPA 2007
Carbon as a Revenue Crop
0
10
20
30
40
50
60
70
Rice Wheat Swine Soybeans Carbon* Milk and Dairy
Corn (grain) Cattle
Val
ue (b
illio
ns o
f Dol
lers
)
Data source: 2007 Census of Agriculture, USDA NASS Febuary 2009; *Carbon estimate based on 25x25 derivation of 20% x 7 billion tons/yr x $20 ton
Value of Agricultural Products
UT-25x’25 StudyUT-25x’25 StudyCrop Net Returns by Selected Scenario: Crop Net Returns by Selected Scenario:
2010 – 20252010 – 2025
Total Net Returns*, 2025Total Net Returns*, 2025Multiple Offsets / RCN Multiple Offsets / RCN Forage ReplacementForage Replacement
changes from baselinechanges from baseline
* Includes agriculture, livestock, forest residues, methane
Regional impacts of Cap-and-Trade Regional impacts of Cap-and-Trade predominantly positivepredominantly positive
Total Net Returns*, 2025Total Net Returns*, 2025Multiple Offsets / RCN Multiple Offsets / RCN Herd ReductionHerd Reduction
changes from baselinechanges from baseline
* Includes agriculture, livestock, forest residues, methane
However, regional impacts vary by However, regional impacts vary by livestock treatmentlivestock treatment
Points to Ponder
We are on a path to a low carbon energy future
Multiple drivers for change
Regulatory solution looming if Congress fails to act
Global Climate Change talks continuing
Ag and forestry are well positioned to deliver solutions to climate change
America wants and needs a new energy future that is:
cleaner
improves national security
strengthens the economy
contributes positively to the quality of life
Agriculture can contribute to these outcomes!
www.25x25.org