Renewable Energy Put in the Spotlight

Three prominent players in the renewable energy space of the U.S. economy briefed Ag Council members on developments in the search for renewable sources of power and their implications for agriculture. The Council’s August Luncheon Meeting was hosted by the Federal Reserve Bank of Kansas City at its elegant headquarters. Francisco Scott, an economist in the Economic Research Department at the Kansas City Fed and moderator of the discussion, noted the Fed regularly incorporates agriculture perspectives in its policy deliberations. He also pointed out that the Kansas City Fed serviced more ag banks and counted more ag counties under its administrations than any of the nine banks in the Federal Reserve System. “The relationship between energy and ag prices has been stronger since 2005,” Scott said.

Panel member Chace Daley, Senior Vice President and Director of Energy Management at Oklahoma-based Farmers National Company talked about renewable energy developments from the perspective of landowners. In an amped-up sellers’ market, landowners “have nowhere to hide” from energy companies – traditional oil and gas and now wind and solar operations – that are hungry to acquire or lease land from farm operators. But, Chace advises farmers “to have a plan” as they structure deals with oil, gas and renewable energy companies. He warned that renewable projects, because of the time it takes to reach scale, are “inherently structured in a suboptimal manner for landowners.”

Lee Blank, CEO, Summit Carbon Solutions, described how his company is developing the largest integrated carbon capture, transportation and storage project in the world. It is partnering with 34 bio-refineries across the Midwest to capture CO2 that otherwise would be emitted into the atmosphere. The CO2 is compressed and transported through a newly constructed pipeline system to an injection site in North Dakota where it will be permanently and safely stored in deep underground geologic formations. Ethanol and agriculture can work together, Blank said, to add value across the supply chain that will have a positive economic impact on rural America.

Scott Fenwick, Technical Director, Clean Fuels Alliance America, promoted renewable energy, saying biodiesel, renewable diesel and sustainable aviation fuel will be recognized as mainstream low-carbon fuel options with superior performance and emission characteristics.” Fenwick forecasts ethanol use for on-road, off-road, air transportation, electricity generation and home heating applications will exceed 6 billion gallons by 2030. “That would cut over 50 million metric tons of CO equivalent greenhouse gas emissions annually.” With advancements in feedstock, CFAA claims use will reach 15 billion gallons by 2050.