Farmers look at growing energy as new 'crop'

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Agricultural producers are slaves to markets, weather, soil conditions and a dozen other variables that contribute to the instability of ranching and farming profits. But, the Rocky Mountain Farmer's Union is pushing a plan that links sustainable rural economies to the production of sustainable energy.

"Rocky Mountain Farmers Union has historically supported renewable energy in all its forms from ethanol to wind and solar," said John Stencel, RMFU president.

The RMFU hosted a community meeting to discuss the potential for rejuvenating rural economies by diversifying into the production of renewable energy "crops."

Harvesting two cash crops is the goal. The first being whatever the landowner is currently producing -- alfalfa, wheat, hay, cattle or sheep. The second would be a "crop" of renewable energy -- whether it be crop by-products for biomass fuel or leased area for a wind generators.

The creation of what Tom Potter with the New Center for Rural Economic and Energy Development calls "farm fuels" empowers rural producers to control their own economy.

Farm fuels include wind power, solar power, and biofuels.

"With effort, we can change an otherwise predictable future," Potter said.

New energy technologies, new energy markets and new energy opportunities can be used to pull rural economies out of the crisis into which drought and market conditions have pushed them.

"It really is time to look at straightforward alternatives to what we have been doing," he said.

This new focus can mean a revenue source and the creation of new jobs.

The Crisis

In September of 2002, the Colorado Commissioner of Agriculture warned that as many as 50 percent of farms and ranches are expected to be lost in this year. Those remaining in business can expect to earn less than $10 a day for their labor, management and investment.

According to the 2002 Community Indicators Report for the Yampa Valley, the average agricultural income is $2,410 a year and the number of agricultural jobs in Moffat County has fallen from 655 in 1970 to 572 in 2000.

There also is expected to be a 30 to 40 percent foreclosure rate on rural portfolios, the impacts of which will cascade to touch granaries, trucking companies, restaurants, grocery stores and hardware stores.

"We're looking at whole communities winking out of existence," Potter said. "We're talking the loss of a sustainable rural lifestyle at stake here."

The potential

As new technologies emerge and new infrastructure is built, the cost of renewable energy is plummeting and becoming more competitive with traditional coal and natural gas generation. Where wind power cost 7 cents to 11 cents per kilowatt hour in 1990, it's now down to 3 cents to 5 cents and is expected to get into the 2-cent range by 2007, making it equal to, or less in some cases, to the cost of natural gas.

"It's economically competitive without the subsidy," Potter said.

Even the cost of the infrastructure is falling. A windmill for residential use can be purchased for as little as $1,300. The cost grows substantially when the size increases to generate power on a utility scale.

Colorado is one of 10 states in the nation's "renewable energy corridor" in that it has high potential for wind, solar and biomass production. It ranks 11th for wind power, is in the top five for solar potential and has a strong standing in the production of biomass. Biomass is organic matter that is grown on a renewable basis and burned for energy.

"No other state compares with us in terms of renewable energy potential," said Mark Schofield, organizer with the Western Colorado Congress.

There are problems with developing that potential, he said. There are cost concerns, interconnection issues and a problem with the source's intermittence.

"The wind doesn't always blow and the sun doesn't always shine," Schofield said," yet, these are facts that can be calculated for."

Also, though the power is free, the infrastructure is a hurdle.

There also are benefits, particularly to the agricultural sector.

"When you think of any investment, it's good to diversify and that's true with energy, too," Schofield said. "This is a great way to hedge against fossil fuel price increases."

The alternatives

Most of Moffat County isn't suitable for wind generation, but there are several patches with Class 3 and 4 winds, which are considered high enough for personal or utility use.

There are 17,000 square miles of Class 4 or better wind sites in Colorado.

Transmitting wind- or solar-generated power to market has always been a concern, but Potter estimates there will be a way to use distribution lines instead of transmission lines to get that power to market within the next two years.

And that's a key element to making wind generation profitable in Moffat County.

"The problem in Moffat County is the big power lines are all full up," landowner T. Wright Dickinson said. "We can't push any more energy through them. How feasible are utility scales for rural Moffat County without building more power lines?"

Potter said he expects developing technology to eventually provide a solution, but transmitting the power produced may not even be necessary.

"It's my opinion that in Colorado there are buyers now who will pay for the green tag of that power without getting the use of that power at all," Potter said.

Green-tagged energy is a credit that can be traded for credits for other energy sources.

Wind power can by used by the landowner for personal use, sold to a local utility or transmitted to a premium market.

It is growing in popularity as a secondary income to farmers and ranchers who allow space-saving turbines to be placed on their property and receive a lease payment of $2,000 to $4,000 a year per turbine. The placement of turbines does not prohibit any other use of the land, including farming.

"You are all potential harvesters of this type of energy and there are people who will pay for it," Potter said.

The production of farm fuels is another remedy to an economic crisis. Biodiesel -- fuel created from seeds rich in oil -- is mixed with diesel fuel, but studies have shown it has potential to stand on its own. And most seeds grown for biodiesel fuel are hardy and drought resistant.

Sunflower and canola are both biodiesel crops, but mainly sold for food oil because the revenue generated from food oil is higher than if it were used as a base for biodiesel.

Not so with mustard seed, which has been shown to be a profitable biodiesel crop.

Blending the vegetable oil with alcohol creates biodiesel, which in most ways is equivalent to Number 2 diesel.

"You've got a waste product and have a consumer market willing to pay more for it," Potter said.

The market for biodiesel fuels is in farm and other diesel equipment, mass transportation systems and in urban markets as premium-priced "green energy."

Tests have shown using a full mixture of biodiesel fuel made engines run smoother, created no black smoke and caused no engine problems in cold temperatures.

A by-product of biodiesel production, glycerin, is in demand for pharmaceutical and cleaning products.

Bioethanol also is a crop that can mean an economic shot for rural communities. Bioethanol is derived from beets, corn, barley, wheat, corn stover, forest thinning by-products, waste sugar and alcohol. It is currently a fuel additive at about 7 to 10 percent, but millions of "flex fuel" cars, vans, SUVs and trucks can run on a mix that is up to 85 percent bioethanol.

Bioethanol is created through a fermentation and distillation process.

"It creates more jobs to harvest new energy crops and new jobs to process and distribute that harvest," Potter said. "What it really comes down to is what's the alternative?"

The solution

Turning renewable energy crops into cash takes a lot of work, Stencel said. Many times it depends on the cooperation of many, which is why RMFU supports and assists in the formation of cooperatives -- the combination of many producers to mass produce a certain product and sell it was one entity.

RMFU will help with the creation of a feasibility study and business plan and product research and development strategies, with the goal of readying the business for financial assistance.

"We'd certainly help you get to a point where you can get financial backing," Stencel said.

He recommends these steps for forming a cooperative:

1. Hold an organizational meeting.

2. Conduct a feasibility study.

3. Report the study findings to potential co-op members.

4. Prepare a business plan.

5. File articles of incorporation and bylaws.

6. Secure financing for the co-op.

7. Recruit members for the co-op.

8. Organize the board.

9. Hire management.

10. Begin the business.

"Opportunities belong to the bold," Stencel said.

The benefits of diversification in rural agricultural economies are vast, Potter said. Income to county governments is based on the capital invested, but each wind turbine, for example, generates approximately $12,000 in taxes. Other benefits include income to rural landowners, income to farmers and ranchers who are getting a better return from the land and the creation of rural jobs.

"Because of the dire economic straights we're facing in agriculture, we're looking at any and all alternatives," Stencel said.

Christina M. Currie can be reached at 824-7031, Ext. 210 or by e-mail at ccurrie@craigdailypress.com.

Break box

For more information

  • Rocky Mountain Farmers Union:

www.rmfu.org

  • Western Colorado Congress:

www.wccongress.org

  • New Center for Rural Economic & Energy Development:

Contact Tom Potter at (303)283-3528 or by e-mail tom.potter@rmfu.org

www.cres-energy.org

  • USDA Rural Development:

www.rurdev.usda.gov

  • Sustainable Energy For Economic Development:

http://www.me3.org/projects/seed/

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