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Liability issue bogs down energy bill: Dan McGuire discusses energy issues, GMOs and farm bill
(Saturday, April 24, 2004 -- CropChoice news) -- David Bennett, Delta Farm Press, 04/16/04:
On the wind power conference:
The conference was tremendous and was the largest wind power event ever in this country. Representatives from all over the world attended. Attendance was announced at 3,600, so it's the largest ever here.
Wind power is catching on. If we get the ball rolling, at least 6 percent of American energy can be supplied by wind energy by 2020 - that's very do-able. North Dakota alone has the resources for tremendous wind energy.
The largest wind farm in the country - perhaps the largest in terms of output, in the world - is to be built east of Bloomington, Ill. They want to erect as many as 267 wind turbines there. A developer wants to build 400-foot turbines on 2,200 acres and should have the project completed by 2006.
Here's the deal, though: for the project to go on, we need Congress to extend the federal production tax credit for renewable energy. It's imperative Congress take care of this.
On the energy bill:
There's a boom-and-bust cycle in the wind energy industry. The production tax credit for wind energy expired last Dec. 31.
Unfortunately, the energy bill is bogged down and everything is on hold. New projects won't get going until that tax incentive is renewed.
I spoke with D.C. lobbyists about this yesterday, and they said it doesn't appear an energy bill will pass. While there's strong, bipartisan support for renewable energy programs, those aren't the problem.
The fight is over the House's refusal to remove MTBE liability protection from their version. MTBE is a fuel additive made from petroleum. There is evidence that MTBE leaches into the water supply and is a carcinogen. Because of concern from municipalities around the country, the MTBE lobbyists got a liability exemption put into the House energy bill to protect against future lawsuits. That protection isn't in the Senate version, but that's the hold-up on the House side. So the MTBE debate is holding up all manner of things important to agriculture and rural areas.
Regardless, we're hoping and working for a three-year extension, at least, for the renewable energy tax credit. The concern is both parties seem to be trying to extract maximum political advantage out of the renewable resource issue. Given this is an election year everything is up in the air.
More turbines going in:
There are now schools using wind energy as an educational opportunity as well as saving money for the district. In Manlius, Ill., there's a school putting a turbine in that will save at least $100,000 annually. That's money in the district's pocket and can't help but benefit the students' educational opportunities. What a progressive, fantastic idea. Turbines are a great economic boost for rural communities.
Regarding GMO corn and pollen drift:
Pollen drift and cross-contamination of conventional varieties by GMOs has become an important issue for our export markets, and we need to be talking about it. We've been warning about this for quite a few years.
The European import market has been lost to the U.S. The year before bio-tech corn was introduced we had 2.7 million metric tons - right at 100 million bushels - of corn exported to the EU. Now, we have zero tons sent there. Yet, the EU is still projected to import as much as 4 million tons - just not from the U.S. In 2004, about 35 million of the 80 million corn acres planted were GM.
We calculate that cumulatively the loss of corn exports to the EU since bio-tech corn has been grown adds up to between 500 million to 700 million bushels. If you were to take that amount off the ending stocks, the current strong corn prices would be at least $1 higher. And another fact to consider: when the EU refused our corn, other nations were inspired to increase their corn production.
On the current world corn market:
Right now, we're looking at a global stocks-to-use ratio that is very tight - perhaps the tightest in decades. But, remember, if we have normal production for a couple of years, we could be right back to $1.80 corn or, maybe, $1.50.
The worldwide drought and resulting reduction in grain production has led to strong demand. This year, ethanol is gobbling up as much as 1.4 billion bushels of corn. We need that. Our country needs to be looking at home-grown energy alternatives so we're more dependent.
On potential of cuts in farm programs:
Out of D.C, I'm hearing that substantial cuts in the farm program are being discussed in Congress and in the Bush administration. These cuts are being discussed in regards to alleviating the federal deficit. They need to look at the deficit, but in places other than agriculture.
Agriculture across the nation needs to get to their elected officials. We need them to know cutting farm programs is a non-starter. Rural American needs to be apprised of the possibility.
The impression that farm program spending goes to farmers is a big myth. Perhaps 20 percent ends up in farmer pockets. All of us in agriculture, because we see relatively strong prices currently, don't need to be diverted away from important issues. Putting faith in achieving strong prices as a result of a drought - or Mother Nature's management - isn't the most sound farm policy. A couple of years ago, we had below $4 beans and $1.80 corn. We could get back to those prices very quickly if we have a couple years of normal production. We need to think about that and keep planning ahead.
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