Saturday, 10 May 2014

Getting PEI Into the Energy Game

There has been no agriculture policy more controversial than turning food into fuel. It’s been driven by a strange mix of objectives, the desire by the United States after Middle East misadventures to lessen its need for foreign oil, and a misdirected effort early on to “green up”  transportation fuels.  It’s in the spotlight again following the release of the latest IPCC report on the dangers of climate change, and the desperate need to cut back on carbon emissions from fossil fuels.  The report argues that a minimum of 40%  of emissions has to be cut by mid-century to avoid catastrophe. It argues that there is about fifteen years left to bend the emissions curve downward. Given the political, cultural and economic realities we live with, this is an enormous task. I think farmers can and should play an important role in finding solutions.

The worst part of the first generation of so called bio-fuels was the use of corn as the feedstock for ethanol production. The U.S. government created huge incentives to produce corn, and the limited soybean-corn rotation has become a gold mine for mid-Western farmers. It increased grain prices here on PEI too, and added to the financial hardship facing livestock farmers who had to buy the costly feedgrains.

The trouble with corn is that it has to be “cooked” first to turn the carbohydrate into sugars that can be distilled into alcohol. That means burning natural gas, dimming much of its green halo. Sugar beets and sugar cane are more efficient because they don’t require this first step. Even better are ethanol production methods using cellulose from wood waste, or perennial grasses like switch grass.  Neither are used for food, but can benefit farmers too, allowing them to profit from an energy crop grown on marginal land not suitable for anything else. More recently smart energy researchers have been pushing the idea of turning grasses and straw not into liquid fuel, but into pellets which can be burned for space and water heating, even electricity production. Link that with hybrid and electric engines,  and the circle gets closed again. Farmers make some much needed income from marginal land,  and carbon emissions from fossil fuels are cut.  

The other bio-fuel that’s had unintended consequences is bio-diesel. It’s a mixture of crushed oil seed like soybeans mixed with diesel. It’s helped Europe reach carbon reduction targets, but at the expensive of millions of acres of what had been domestic food production in South America. 

I think there are two other productive ways local farmers can contribute to, and benefit from reducing carbon emissions.  One is carbon sinks. Perennial pastures, woodlots, soak up carbon dioxide as they grow. There have been tentative steps to pay landowners to maintain these carbon sinks, the other side of a carbon tax ledger, and that should be expanded.

The other idea is particularly important for PEI.  It needs a little explanation. There are huge financial benefits from royalties for provinces with oil and gas reserves that allow energy companies to explore and produce.  It’s made Newfoundland and Saskatchewan have provinces, and Alberta the envy of every other provincial treasurer.  The economic salvation from royalties pushes broke provinces like New Brunswick to promote fracking, and the environmental risks that go along with it. 

Think about this. Why can’t there be a proper royalty regime developed for renewable energy too.   Royalties are nothing more than a jurisdiction getting a piece of the action from digging something out of the ground.  Now, with advanced wind turbines, having a good wind regime is no less important to producing energy. And it’s renewable, the resource doesn’t deplete, it’s there forever. Then a province like PEI with no oil and gas reserves gets to play by the same rules as everyone else. Then New Brunswick can look at tidal and wind power and say these can bring us back to solvency too.

The IPCC report says the much lower cost of renewables is the biggest development since its last report. Now rather than challenging people to pay much more for fossil fuels to save the planet, the report says renewables are competitive, in some cases cheaper. Throw in a carbon tax which even oil companies say is necessary, and renewables look even better.  Even the playing field on royalties too,  and provincial governments can make better policies.

And many of those wind turbines will end up on farmland, one more opportunity for farmers to lower carbon emissions, and make some money.

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