Archive for December, 2010

Minnesota, US continue wetlands restoration in cooperation with farmers, landowners

The US saw a record jump in enrollment of new land in the federal Wetlands Reserve Program (WRP) and Minnesota farmers and land owners continued to take part in the program.

Land owners enrolled over 272,000 acres in the (WRP) in fiscal year (FY) 2010, the highest single-year enrollment in the program’s history. This is a 52 percent increase over FY 2009 when 179,000 acres were enrolled. There are now more than 2.3 million acres enrolled in WRP nationwide.

“This is an excellent program and Minnesota farm producers have been at

the forefront of participation–we’ve gotten nearly 120,000 acres of sensitive, marginal lands into these wetlands restoration contracts now,” said Greg Schwarz, a farmer in LeSueur and president of Minnesota Corn Growers Association. “The key to this program is that it’s voluntary, and land-owner driven. As farmers, stewardship of the land is one of our primary goals. We know which acres, in balance, would better serve as wildlife habitat than for crop production. This program recognizes that it isn’t the farmer’s burden alone to make these land use changes, but that the general public can support this in order to make it a reality.”

In Minnesota, NRCS concluded 74 WRP contracts in the year that ended September 30, to return 8,375 acres to wetlands. The average contract covered 113 acres, and the average contract amount was $189,821. In total, Minnesota landowners received $14 million in compensation for longterm placement of marginal agricultural lands in the program. Participation in 2008 and 2009 was even higher, and officials anticipated more acreage enrollment in Minnesota in 2010, but the failure of a bonding bill limited the ability of the state to share the cost this year.

Officials agree that farming and conservation have to work in balance, and that turning productive acres into wetlands doesn’t make sense.

“We all eat, and we all benefit from farming’s contribution to Minnesota’s economy,” said Tim Koehler, assistant state conservationist with the Minnesota field office of National Resource Conservation Service. “These WRP contracts, which pay on average $2,000 per acre in Minnesota, reflect the public benefit of restoring fragile, non-productive land to its original wetlands state.”

Schwarz noted, “The stronger prices we’ve seen over the past few years have helped in this process of sorting out productive areas from marginal areas. In the past, the farm program offered set aside programs as a way to keep production from outstripping demand as much as it was to meet environmental goals. The current strong markets assure that more of the acres that go into programs like this really belong there.”

While the program is land owner driven, Koehler noted that applications are prioritized, in order to maximize benefit.

“It’s better to go along wildlife corridors and have areas that are somewhat to have contiguous areas, rather than 30 acres in the middle of 20 square miles of farmland,” said Koehler.

Prairie Potholes along the migratory waterfowl flyway are favored–the area that cuts a diagonal swath from Detroit Lakes down to Albert Lea. The river environments in southeast corner of the state also rate highly in WRP scoring, according to Koehler.

It’s estimated that the US once had 220 million acres of wetlands and currently has about half that amount. The current program caps WRP easements at just over 3 million acres, which leaves about 700,000 more acres that can be enrolled. Natural resource scientists argue that wetlands serve functions of water absorption (flood prevention), and enhance water quality. The issue becomes all the more critical as urban areas across the nation continue to expand impervious surfaces–paved roads and lots, and building rooftops, where open land previously absorbed water. An estimated 30 percent of the seven county Twin Cities metropolitan area is impervious.

We can’t repeal the laws of nature

(letter blogposted to Brainerd Dispatch)

Not content with two budget busting measures — extensions of tax cuts and unemployment benefits — in its latest compromise bill, Congress has included billions for ethanol from corn and cellulose. 

Corn-based ethanol blenders will receive about $6 billion in 2011 for blending the 12.6 billion gallons mandated by the Energy Independence and Security Act of 2007(EISA). This is more than the market can use which led to EPA’s unpopular permission for blending 15% ethanol in gasoline.  EISA also requires 250 million gallons of cellulosic ethanol in 2011. That has been lowered to 6.6 million by the EPA, as there are no effective production facilities for that product.

We have a Congress that has mandated more of one biofuel, corn ethanol, than the market can consume, and it has mandated 35 times more of a second biofuel, cellulosic ethanol, than industry can supply.

The Minnesota Legislature has enacted a similar energy pipe dream, requiring Xcel Energy to get 25 percent of its energy from wind in 2020. Texas has three times the wind capacity of any other state. It is forecasting 1 percent of Texas electric grid power from wind through 2015.

Passing legislative laws is easy. Repealing the laws of nature and physics is not so easy.

Our Take:
There is no law of nature that says cars driven by Minnesotans have to operate on oil from Saudi Arabia, Venezuela, or even Canada.

While we would argue that free trade is often a great benefit in developing the global economy, and that it lifts up individual regions through participation in that competitive global economic environment, we think Americans are starting to wake up and realize we may have given away the store through this unrestrained approach to trade.

Energy is one of the worst areas of trade imbalance facing the United States and it’s one that not only puts our economy at risk, but our national security as well–the fact that every time we pull up to pump–even when we are buying Canadian-sourced gasoline, we are supporting the world oil market and enriching nations that are actively promoting our destruction.

Through incentives and EISA we are breaking the monopoly of oil and limiting the transfer of wealth to Russia, Iran, the Persian Gulf nations, and Hugo Chavez’ Venezuela.

We import nearly two thirds of our oil–that is dollars and jobs that are gushing out of our economy. By building ethanol and biodiesel we not only support two small industries, but we infuse the entire economy through the jobs and revenues in renewable energy production. Even more important we are building the intellectual and monetary capital to continue to invest in energy innovation.

Ethanol is the first building block in the foundation of a future of domestically produced, biomass-based renewable energy–sourced from the farm, from the forest and even from municipal waste streams. Not only does bioenergy obey the laws of nature, but it’s growing use and our decreasing dependence on fossil energy will continually reduce our adverse impact on nature, while creating jobs and economic activity that can’t be moved to Mexico or China.

Producers can customize Corn College experience

Corn College will be a daylong educational experience that can be tailored to the needs of each farm producer, to assure they come away with information they’ll be able to put to use right away in their marketing and planning for the 2011 crop year.

The event takes place December 17th, 2010 at South Central College in North Mankato. University of Minnesota Extension and South Central College have joined Minnesota Corn Growers Association to sponsor the event, which will run from 8:00 am to 3:00 pm and consists of a series of in-depth and hands-on concurrent sessions.

“We are very pleased to be able to work with these educational institutions to bring our producer members the finest educational experiences available for farm operators,” said Greg Schwarz, a farmer in Le Sueur, Minnesota, and president of Minnesota Corn Growers Association. “Education is one of the keys to the prosperity of farmers now and into the future. Our competitiveness with other regions and with farm producers of other nations depends on our continuous improvement of our yields and the quality of our product. Education is what can keep us out in front.”

Online registration is available at: http://www.regonline.com/CornCollege , where attendees can put together the courses they want for the day, and registration before the event saves $10. Admission is $50 at the door. Preregistration is recommended as class and lab space is limited.

Corn College participants can select course on pest management, crops and soils, grain storage and economics, and nutrient management, offered by the following faculty of the University of Minnesota:

Jeff Gunsolus, U of MN Weed Scientist, will cover picking the right herbicide for the right weed at the right time. Dean Malvick, U of MN Plant Pathologist, will host a lab on corn diseases and their management. Ken Ostlie, U of MN Entomologist, will address performance, options, and choices to consider when selecting transgenic insect traits.

Jeff Coulter, U of MN Corn Agronomist, will lead a lab on corn staging, stand establishment, and the impact of stress on crop yield. John Lamb, U of MN Soil Scientist, will run a hands-on computer lab exercise using the NRCS web soil survey.

Ken Hellevang, North Dakota State University Extension Engineer, will lead a lecture on key features to consider when selecting a grain drying and management system. In addition, he will provide recommended storage management strategies to maintain grain quality during short and long-term storage. Dave Bau, U of MN Ag Business Management Educator, will demonstrate using a spreadsheet to calculate your personalized 2011 corn break-even price.

Dan Kaiser, U of MN Soil Fertility Specialist, will conduct a hands-on lab demonstration on corn nutrient deficiencies and toxicities. Jeff Vetsch, U of MN Southern Research and Outreach Center Soil Scientist, will demonstrate different planter attachments and fertilizer delivery system options to improve corn yields.

Grassroots voice heard at MCGA pre-resolution meeting

Delegates from more than three dozen county corn grower organizations gathered Thursday, Dec. 2 and put together a variety of potential additions to the Minnesota Corn Growers Association policy book for 2011.

These new resolutions will be polished into final form and approved at the MCGA annual meeting, which takes place during MN Ag EXPO, Monday and Tuesday, January 17 and 18 at Jackpot Junction Resort and Casino in Morton.

Because ethanol still provides a cornerstone for farm prosperity in Minnesota, a number of resolutions focused on helping farm-based energy industries continue to grow.

The federal Volumetric Ethanol Excise Tax Credit (VEETC) is set to expire on Dec. 31, and given the uncertainty that it will be reauthorized, a resolution supporting mandatory use of ethanol, as provided in the Energy Independence and Security Act of 2007, be maintained regardless of whether these VEETC payments continue to flow to fuel blenders. Farmers favor incentive-based programs as the most effective way to build markets or encourage actions with a perceived public benefit. But lacking VEETC, America should nevertheless not back away from its commitment to increase alternatives to imported oil.

Looking more particularly at Minnesota, delegates voted to keep a resolution on the books supporting the continuation of ethanol producer payments. At this point most of the ethanol plants have obtained the support that the state promised these businesses for undertaking the risk of pioneering the ethanol industry. Reauthorizing or replenishing funding for the program could potentially encourage expansion of ethanol production in Minnesota, which MCGA supports. Minnesota currently produces a billion gallons of ethanol fuel, much of which is exported out of state and is a major boost to the Minnesota economy.

Another resolution seeks to short-circuit a potential conflict of interest in state agencies: to assure that funds that proceed from fines levied against ethanol producers flow into the state’s general fund, rather than to the operating fund of the Minnesota Pollution Control Agency. Currently, MPCA receives those funds directly, and the proposed resolution expressed the sense that this creates an unhealthy incentive to authorize fines.

As more government programs seek to take agricultural land out of production for environmental benefit, MCGA delegates argued for more deliberation and planning in government’s approach to such land set-asides–to assure that no localities bear an unfair burden. A resolution calls for such set asides to require a fiscal impact assessment that will determine where funds for the purchase and upkeep of land will come from and show the impact on local tax revenues and local economic activity.

Concerns continue to grow regarding how government conducts meetings across the range of units of government, and state and regional agencies. A resolution supports measures that will ensure the maintenance of Minnesota’s open meeting laws. The resolution proposes several measures, including requiring that all meetings allow not only written but also verbal submissions for the record, and requiring the video recording of all government meetings, to assure fair and accurate reporting of the outcome of these meetings in official minutes because this has a bearing on how these government units handle the issues reviewed at these meetings.

Obama, republican leaders meet–no word on needed energy legislation

Washington (Platts)

Republican leaders in the US Congress said after a private meeting with President Barack Obama that they plan to focus on tax issues before legislators adjourn for the year, but did not mention plans for pending energy legislation.

Obama, McConnell and Boehner also said it was crucial for Congress to pass a spending bill to keep the government operating beyond this Friday, when a stop-gap spending measure is slated to expire.

But none of the men said anything about using the lame-duck session to pass several energy-related bills that renewable-energy advocates have long urged Congress to take up. One such program, administered by the Treasury and Energy departments, provides developers up-front cash grants in lieu of after-the-fact tax credits to build wind farms, solar facilities and other renewable-energy projects. The so-called 1603 program, which has been wildly popular with clean-energy developers, is slated to expire at the end of 2010.

Last Monday, more than two dozen senators from both sides of the aisle urged McConnell and Senate Majority Leader Harry Reid to use the lame-duck session to extend the 1603 program for two years.

Another key program set to expire at the end of the year unless Congress acts is the Volumetric Ethanol Excise Tax Credit, or VEETC, which provides fuel blenders with a 45-cent tax credit for every gallon of ethanol that they blend into gasoline. Earlier this month, a host of senators from corn-producing states urged Reid to find a way to extend the soon-to-expire tax credit. The senators, led by Iowa Democrat Tom Harkin and Missouri Republican Christopher Bond, said the VEETC is crucial for weaning the US off of foreign oil.

“We cannot afford to continue to send billions of dollars every year to unstable oil-producing countries, not to spend additional billions to protect those investments,” they wrote in a letter to Reid.

Congress also appears poised to adjourn for the year without passing any significant legislation related to BP’s massive oil spill earlier this year in the Gulf of Mexico. The House passed a bill earlier this year that would bar BP from acquiring new leases in the Gulf of Mexico because of its safety record, but the measure has languished in the Senate. The Senate also failed to act on a House-passed measure that would make oil companies liable for unlimited spill-related economic damages, a huge shift from the current liability cap of $75 million per company.

–Brian Hansen, brian_hansen@platts.com

Our Take:
Washington appears to have blinders on, focusing too narrowly and missing an important opportunity.

Both 1603 and the VEETC are jobs bills. Plain and simple. We don’t have the figures for wind and solar development, but we know that national studies show 400,000 jobs depend on the ethanol industry and the VEETC credits that keep ethanol flowing to the consumer are crucial to keeping those people employed. Some 20,000 of those jobs are here in Minnesota, where ethanol generates an estimated $6 billion in annual economic activity.

The VEETC credit primes the pumps and encourages a vast amount of economic activity–the $4 billion in payments results in economic activity that brings $15 billion into federal, state and local government coffers.

This is not the time to pull the plug on a program that ensures so many jobs. Ethanol has proved itself a vital component of the farm economy and reductions in its production would impact the entire spectrum of jobs from finance industry, to transportation, agribusiness and manufacturing. The additional revenue seen on the farm, from stronger commodity prices and from returns on ethanol ownership, are dollars that go right back into purchasing farm equipment, and buying goods and services on Minnesota’s small town Main Streets.

Let’s keep rural America strong, by keeping the VEETC incentive in place.

Ethanol Tax Credit Expiration Getting Ever Closer

(posted by Andy Eubank, Hoosier Ag Today)

NCGA is also hoping congress acts on the VEETC, or Volumetric Ethanol Excise Tax Credit, before it expires on Dec. 31. The President of NCGA, Bart Schott from North Dakota, told Hoosier Ag Today recently he still has hopes of an extension this year.

“I do, and I liken it to a light bulb on the farm that is sometimes dimmer and sometimes brighter, but the switch, the light bulb has never gone off,” he said. “We think that light is getting brighter right now with VEETC. All the ethanol groups are working together messaging one voice, and we’re getting some help from the White House on the tax extension and how to go about it. So I think right now the climate is pretty good to get the extension passed.”

…Every day there is a bigger squeeze on time available for the extension, which is why some are suggesting congress should grant the extension now and debate modifications to tax credits later. A recent study by the Delaware company Entrix says expiration of the credits could mean the loss of thousands of Hoosier jobs.

Schott also told HAT he would love to see an aggressive move to blender pumps in Indiana. His state has more than doubled ethanol consumption in the last year after 76 new blender pumps were installed starting last October. That growth was initiated by a $2 million biofuels blender pump program in which corn growers, the North Dakota Department of Commerce and others collaborated.

http://www.hoosieragtoday.com/wire/enews/01079_schottveetc_194538.php

Our Take:
We hope the help from the top, and the strength of the coordinated effort by ethanol and farm groups is enough to get this done in time. The time is short before the end of the year, when VEETC lapses. In the current job environment, it’s a setback no ethanol-producing state can afford.

Also, we hope state legislatures and the federal government pay attention to North Dakota’s experience–investment in blender pumps will pay off in immediate increases in ethanol use. Part of the success of that venture is that the VEETC discount is often passed along to the consumer, making ethanol economically attractive. Add that to the fact that ethanol is the right thing to do for our nation’s energy security and economy (keeping dollars and jobs here instead of shipping energy dollars and jobs overseas), and the right thing to do for the environment.

Renewing VEETC is one thing the lame duck session can do that won’t be lame at all.

Ethanol teams up with an American winner: NASCAR moves to E15 in 2011

Minnesota Corn Growers Association, National Corn Growers Association, Growth Energy and 100 other ethanol production companies and advocacy groups have banded together to become a major sponsor of NASCAR racing. The coalition will offer weekly prizes for every race in the three NASCAR national series, according to the racing body’s Chairman and CEO Brian France, who announced the ethanol promotion along with the ethanol coalition last Thursday via live video feed to 30-plus locations across the nation.

Minnesota State University-Mankato hosted Minnesota’s live video event, which drew together members of Minnesota Corn Growers Association, along with representatives of the state’s ethanol plants and other ethanol supporters. Rick Mummert, general manager of Poet Ethanol in Glenville, emceed the event. Kelly Marsczak of American Lung Association of the Upper Midwest also spoke at the event.

MCGA grower leader Tom Haag, Minnesota Corn Research and Promotion Council representative Jerry Demmer, and MCGA regional representative Dan Erickson all attended.

“This sponsorship of NASCAR is a great opportunity for MCGA to reach out to the American people, through one of our most popular sports series, to show everyone what it means to run vehicles on ethanol. This truly is a win-win for farmers, and for the American people. You still have to this day, people saying that no, ethanol cannot be put in my car, because it may hurt it. There will be a lot of fans who watch NASCAR and those fans will spread the good word that ethanol is good for the cars–it can be run in all cars,” said Erickson.

The race association views the move to E15, under its Green Flag program, as a win for NASCAR too: “American Ethanol’s new partnership with NASCAR is much larger and more ambitious than a typical sports sponsorship. Here we have an entire industry looking to NASCAR to communicate its message that America is capable of producing its own renewable, greener fuel. The entire NASCAR industry will benefit from American Ethanol’s multi-faceted support of NASCAR, as well as from thousands of farmers and members of the ethanol supply chain now serving as new ambassadors for the sport.”

Regional Rep Dan Erickson noted the phenomenon of strong fan loyalty in NASCAR, which translates to consumer choices: “People have their favorite drivers and they often purchase the brand of tires or motor oil used by their driver. We’re hoping the same kind of consumer loyalty will lead fans to see that if it’s good enough for America’s top stock car racers, they can run their own vehicles on ethanol.”

The National Association for Stock Car Auto Racing Inc. (NASCAR) is America’s top spectator sport — with more of the top 20 highest-attended sporting events in the U.S. than any other sport — and is the No. 2 rated regular-season sport on television. NASCAR races are broadcast in more than 150 countries and in 20 languages. NASCAR fans are the most brand loyal in all of sports, and as a result more Fortune 500 companies participate in NASCAR than any other sport.

“E15 is an enormous opportunity to reduce greenhouse gas emissions, create U.S. jobs, and strengthen national energy security by reducing our dependence on foreign oil,” said Tom Buis, CEO of Growth Energy.” There is nothing more American than NASCAR, and there is no fuel more American than ethanol. We are so proud that the bounty of American farming will be used in NASCAR racing.”

The E15 for all NASCAR events will be supplied by Sunoco, which has started its own brand-name E15 product.

Jeff Broin, CEO of POET, which is a network of 27 ethanol plants producing more than 1.6 billion gallons of ethanol annually, noted that ethanol is an American industry whose jobs will never be outsourced.

“Grain ethanol is at least 59 percent cleaner than conventional gasoline,” Broin said during the NASCAR announcement ceremony in Las Vegas. “Growth Energy has officially petitioned to increase the allowable blend of ethanol in transportation fuel for everyday American motorists from 10 percent to 15 percent, which would help create 136,000 new American jobs.”

NASCAR consists of three national series (the NASCAR Sprint Cup Series, NASCAR Nationwide Series, and NASCAR Camping World Truck Series), four regional series and one local grassroots series, as well as two international series. Also part of NASCAR is Grand-Am Road Racing, known for its competition on road courses with multiple classes of cars. NASCAR sanctions more than 1,200 races at 100 tracks in more than 30 U.S. states, Canada and Mexico. Based in Daytona Beach, Fla., NASCAR has offices in New York; Los Angeles; Charlotte, N.C.; Concord, N.C.; Conover, N.C.; Bentonville, Ark.; Mexico City; and Toronto.