2002 Farm Bill Makes History with New Energy Title
The 2002 Farm Bill’s Energy Title is being hailed as a victory for farmers, the rural economy and the environment. Title IX of the Farm Security and Rural Investment Act of 2002, approved by congress and signed by President Bush in May, provides $115 million to assist farmers and ranchers in developing renewable energy projects and making energy-efficiency improvements. Another $290 million will fund new biomass energy research, biodiesel fuel education and the existing Commodity Credit Corporation subsidy program for the production of biodiesel and ethanol, bringing the Energy Title’s totalFarmer harvesting the wind appropriations to $405 million through 2007.
The Energy Title is new territory for Federal farm legislation, reflecting the growing importance of farms in our nation’s energy system. A coalition of Midwestern farmer, environmental, and rural economic development groups, including Windustry, worked hard to frame the energy provisions and gather broad-based support. At his signing ceremony, President Bush acknowledged the growing importance of farms in the nation’s energy system, saying “Farming is the first industry of America - the industry that feeds us, the industry that clothes us, and the industry that increasingly provides more of our energy.”
The money allocated for clean energy in the farm bill could be a tremendous boost for farmers and rural communities interested in developing wind energy. Under the new bill, the United States Department of Agriculture (USDA) will have $115 million over five years to make low-interest loans, loan-guarantees and grants to farmers, ranchers, and rural small businesses to purchase and install renewable energy systems and make energy-efficiency improvements. The money will be available to those who demonstrate need under criteria to be established by the USDA. The grants cannot exceed 25 percent of the cost of a project, and a combined grant and loan or guarantee cannot exceed 50 percent of the cost of a project. The USDA will consider a variety of factors, including the type of renewable energy system, the quantity of energy likely to be generated, the environmental benefits, and the reproducibility of the system when determining the amount of a grant or loan.
The new legislation should help encourage wind projects in states like North and South Dakota where huge wind resources have barely begun to be developed. Herb Manig, Executive Vice President of the North Dakota Farm Bureau, said, “The Energy Title comes at a timely juncture as our nation's consumers are increasing their demand for "clean" forms of energy, and as our nation's farmers struggle with abundant crops and low market prices. Not only will it assist farmers with their own needs for energy efficiency, it can help farmers develop and market alternate forms of energy. It will help protect our environment, reduce our dependence on foreign oil, and bring greatly needed income to agricultural producers.”
Other sections of the farm bill, including the Rural Development Title and the Conservation Title, also have provisions that should prove to be beneficial to wind. The Conservation Reserve Program (CRP), a voluntary program for agricultural landowners that encourages land conservation, was amended to allow wind turbines and biomass harvesting on CRP lands. Wind projects will be subject to USDA approval based on site location and consistency with the soil, water and habitat goals of the CRP program.
Under the Rural Development Title, renewable energy systems were made eligible for grants under the Value-Added Grant Program and the Consolidation Farm and Development Act was amended to allow loans and loan guarantees for wind systems and methane digesters.
The Energy Title is a relatively small portion of the overall bill (it allocates $405 million over six years, while the full bill is estimated at $190 billion over ten years) and has not gain nearly as much attention as the increased crop subsidies and the conservation measures. However, it might be the bill’s most important provision for the future of American agriculture.
“The Energy Title is one of the strongest components of this bill. It builds on the stuff we’ve been working on, making the nation’s energy supply domestic, diverse, decentralized and renewable,” said Larry Mitchell, Chief Executive Office of the American Corn Growers Association. While the rest of the farm bill increases subsidies for traditional crops, the Energy Title creates an opportunity for farmers to diversify and supplement their incomes.
According to Tom Sloan, Vice Chair of House Utility Committee, Kansas House of Representatives, creating new sources of income for farmers also might help preserve family farms and the rural way of life. “Wind Power is an exciting new industry and if there is an annual income from wind turbines then it’s more incentive for the youngest generation to remain on or return to the farm - which really changes the demographics of rural counties.”
“The Energy Title establishes energy policy as an integral part of agricultural policy which will create a bigger market for farm-based energy that will benefit rural communities,” said David Benson, farmer and Nobles County Commissioner in Southwest Minnesota.
Windustry is looking forward to the speedy implementation of the Farm Bill and will work to ensure that the Energy Title provisions foster clean and economically advantageous renewable energy for rural communities and for the nation. You can follow the process on a new USDA website: www.usda.gov/farmbill.
Where is the Wind?
The first step toward developing wind energy is finding where the best wind is. New wind resource maps are now available from Wind Powering America: www.windpowermaps.org/windmaps/states.asp
* Idaho (released April 2002)
* Montana (released April 2002)
* Oregon (final version TBA)
* Washington (released January 2002)
* Wyoming (released April 2002)
* Selected Portions of California, Nevada and Utah (released March 2002)
Wind resource maps are available for many other states from: www.eren.doe.gov/windpoweringamerica/where_is_wind.html.
Links to new maps are also available from the Renewable Energy Atlas of the West project at: www.energyatlas.org. This project is working to compile information on wind, biomass, solar and geothermal resources from eleven western states into a single Geographic Information Systems (GIS) database.
Progress on Capital Hill
Senate passes Renewable Portfolio Standard
In April, the U.S. Senate passed an Energy Bill that includes a Renewable Portfolio Standard (RPS), a provision requiring ten percent of electricity generation in the United States to come from renewable sources by 2020. A national RPS is the single most powerful way to vastly expand the market for wind energy. The House energy bill passed last year does not contain an RPS and the two bills have yet to be reconciled.
Production Tax Credit
In other good news for wind, congress renewed the Production Tax Credit (PTC) for wind energy in March as part of a long-delayed economic stimulus package. The inflation-adjusted 1.5 cent-per-kilowatt-hour tax credit for electricity generated with wind turbines was extended through 2003, allowing hundreds of wind projects to get back on track. The PTC is critical to making wind projects economically viable. A provision to extend the credit through 2006 is part of the energy bill passed by the Senate in April. A national RPS and a longer-term extension for the PTC are essential elements for growth and financial stability in the wind industry. Where do your state’s representatives stand on renewable energy development?
June 21-23, 2002 -- Midwest Renewable Energy and Sustainable Living Fair, Custer, Wisconsin. Contact: Midwest Renewable Energy Association at (715) 592-6595 or visit www.the-mrea.org.
July 13, 2002 -- Sustainability Fair 2002, Livingston, Montana. Rotary Park next to historic Depot Center downtown. Contact: Jody Allen at (406) 222-0730 or firstname.lastname@example.org.
August 12-23, 2002 -- Wind Energy Workshop, Carbondale, Colorado. A hands-on workshop to learn everything from how to measure the wind to designing a system to doing an actual installation. For more information, contact Solar Energy International at www.solarenergy.org.
November 21-22, 2002 – Minnesota Wind Conference, Minneapolis Minnesota. Save the date for a conference on reaching Minnesota’s Renewable Energy Objective.
Windustry builds collaborations and provides technical support to create an understanding of wind energy opportunities for economic development. Windustry is affiliated with the Institute for Agriculture and Trade Policy.
Windustry Evolves and Expands
Windustry has doubled in size this spring with the hiring of a new Program Associate, Sarah Johnson. She is a former intern at Minnesotans for an Energy-Efficient Economy and holds a degree in geology from Carleton College in Northfield, Minnesota. Also, Windustry’s office has officially moved to the Institute for Agriculture and Trade Policy in Minneapolis. With this expansion, look for more frequent newsletters and updates to our website.
Wind Farmers Network
The purpose of the Wind Farmers Network is to bring together a broad range of landowners, farmers and ranchers to exchange their experiences in wind development and educate others who would like to begin farming the wind. If you would like to join the network, please send your contact information and a brief sentence describing your wind energy interests to Windustry or join online at www.windustry.org/about/join.htm. Your information may be shared with other wind farmers within the network only. The network is currently under development.
Click on the link below for a pdf version.