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Chris Clayton DTN Ag Policy Editor

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Wednesday Oct 21, 2009

UT Study Shows Huge Biomass Revenue Potential

The New York Times reports Wednesday that President Obama will give a speech focusing on climate change and green energy Friday at the Massachusetts Institute of Technology.

http://www.nytimes.com/…

The climate bill, starting on Friday, will begin to get serious emphasis in policy discussions again. The Times states Obama's speech will be pegged to the release also on Friday of an EPA economic analysis of the Senate-proposed bill, the Clean Energy Jobs and American Power Act, or CEJAPA.

Also on Friday, and the Times didn't have this (snort), the University of Tennessee will release a study on Renewable Energy Standards and how those standards will impact agriculture. The report is being done for the 21st Century Agriculture Policy Project and will be released in Washington on Friday. According to the findings, Renewable Energy Standard policies "are expected to create a large new market for biomass from the agricultural and forestry sectors, and as a result, to have a positive effect on farm income, according to the study. Under a 25% RES policy in 2025, the study projected that increases in gross receipts range from $9,419 per farm in Florida, $11,283 per farm in Colorado, $16,028 per farm in North Carolina and $43,229 per farm in Kansas."

To note here, I wrote about a Missouri biomass farmer cooperative in early September that is selling biomass to coal plants in the state because of a Renewable Energy Standard in that state. The farmers are not only making money selling the biomass, but taking advantage of a new USDA program that matches payments of up to $45 per ton as well.

The House climate bill has a national 20 percent RES by 2020. The Senate bill right now has a 15 percent RES standard.

Further, "Preliminary results from the study also show that increased demand for biomass feedstock is substantial under all RES policy cases considered. However, the size of the new market will vary by state and by level of the RES targets typically resulting in a larger market for biomass," The University of Tennessee study states.

But adding $43,229 income per farm in Kansas by 2025? Well, nobody's capping anyone's future there!

The full report will be released Friday at the Capitol with representatives from the National Farmers Union and National Milk Producers Federation, along with other agricultural organizations. The study was done by the Bipartisan Policy Center.

http://bipartisanpolicy.org/…

Also, on Oct. 27, I'll be hosting a free webinar on climate legislation. If you are interested in registering, go to. http://bit.ly/…

I can be found on Twitter at chrisclaytonDTN.

Posted at 08:16AM CDT Oct 21, 2009 by Chris Clayton

Comments (1)

Chris: I greatly respect your opinion and your expertise, but in this case I would invite you to investigate the cost side of agriculture as well. Under cap and trade, the cost for capital equipment, energy, herbicides, seeds, fertilizer, and transportation will be rising so significantly that it will swamp the potential for revenue increases. Furthermore, the weakness of the economy brought on by this legislation will crater the demand for the very biomass upon which you are basing your revenue assumptions.

Posted by tom vogel at 03:22PM CDT Oct 22, 2009

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Blog Home Pages

	November 2009
S	M	T	W	T	F	S
1	2 GOP Ranking Members Caution Boxer on Climate Bill Classifying Carbon Subsidies in Trade	3 Farm Bureau Opposes House Health Care Bill	4 Soybean Growers Spell Out Climate Bill Concerns	5 Climate, Windmills and Checkoffs on the Agenda	6 NFU Urges Passage of Health Care Bill	7
8	9 Rules Coming for SURE	10	11 Climate Not Changing in Senate	12	13 Senators on Allowances, Obama in Japan	14
15	16 USDA, DOJ Meetings Set	17 Lincoln Gearing up For 2010 Campaign Oklahoma Pushes Wind Revolution	18 Biofuel Policies on the Table in December	19 Farm Bureau Praises Delays on Climate Bill	20 Growth Energy Wants CA Carbon Rule Revisited	21
22	23	24	25	26	27	28
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