Clean Energy Blueprint Benefits Farmers and Rural Economies
By increasing renewable energy use, the Clean Energy Blueprint would provide an important economic boost to farmers, ranchers, and rural economies. The Clean Energy Blueprint includes a renewable portfolio standard, in which the U.S. would produce at least 20 percent of its electricity from renewable energy sources (wind, biomass, geothermal and solar) by 2020. Much of the nation's renewable energy potential is found on agricultural lands and in rural areas. Wind and biomass energy could become a new cash crop for farmers and ranchers, helping to increase and diversify income and to counteract swings in commodity prices. Renewable energy development would also provide a long-term source of jobs, income, and tax revenues for rural communities.
Over the next 18 years, we estimate that the Clean Energy Blueprint would:
- Stimulate over $60 billion (in undiscounted 1999 dollars) in new capital investment in renewable energy technologies in rural economies.
This investment would create tens of thousands of new high paying jobs in construction, manufacturing, and operation and maintenance of renewable energy facilities. For example, a Danish company recently opened a wind turbine blade manufacturing plant in Grand Forks, North Dakota, creating 130 new high paying jobs. This is equivalent to 20 percent of the jobs in the state's coal industry. New wind turbine manufacturing plants have also opened or been proposed in Illinois and Colorado. According to the US Department of Energy, generating 5 percent of the country's electricity with wind power by 2020 would create 80,000 new jobs. Wind power would provide 8 percent of the nation's electricity by 2020 under the Clean Energy Blueprint. - Double biomass energy use, providing billions of dollars in new income for farmers and rural communities.
Tripling US use of biomass energy could provide as much as $20 billion in new income for farmers and rural communities, according to DOE. Under the Blueprint, much of this new income would come from using agricultural residues and fast growing energy crops such as switchgrass (a perennial prairie grass native to the Midwest) to produce electricity. While most crop residues are left in the field to reduce erosion and recycle nutrients, some could be used to produce energy without harming the soil. Perennial energy crops, such as switchgrass, require less maintenance and fewer inputs than annual row crops, so they are cheaper and more sustainable to produce. In Chariton Valley, Iowa, farmers have planted over 4,000 acres with switchgrass to be burned in a large power plant near Ottumwa. If successful, the project plans to scale up to 50,000 acres, with 200 to 500 farmers producing 200,000 tons of switchgrass each year, supplying 5 percent of the plant's fuel, and earning profits of about $10 per ton or $40 per acre. - Generate over $7 billion (in undiscounted 1999 dollars) in property tax revenues for local communities.
Increased tax revenues could be used to build new schools, roads, and other public infrastructure. For example, a 35-megawatt wind farm in Culberson County, Texas, is providing about $120,000 per year in revenues for local schools over a 25-year period. In Iowa, about 250 MW of wind development is providing $2 million per year in property tax revenues for local communities. - Provide $1.6 billion (in undiscounted 1999 dollars) in lease payments to farmers, ranchers, and rural landowners from wind power development.
In the Midwest, wind developers are paying farmers $2,000 or more per year for each wind turbine installed on their land. Large wind turbines use only about a quarter acre of land, including access roads, so farmers can continue to plant crops and graze livestock right up to the base of the turbines. In a good year, that same plot of land could yield $90 worth of corn, $40 worth of wheat, and $5 worth of beef.
The Clean Energy Blueprint would capture these benefits by implementing the following renewable energy policies:
- A renewable portfolio standard would require all electricity providers in the US to increase nonhydro renewable resources from about 2 percent today to at least 20 percent by 2020.
- A public benefits fund would be created by a 0.2 cents per kilowatt-hour charge on electricity (about $1 per month for a typical family) to provide matching funds for state programs to encourage renewable energy development and energy efficiency.
- Net metering would make it easier and more affordable for farmers and ranchers to generate their own electricity from renewable energy systems.
- Production tax credits of 1.7 cents per kilowatt for 10 years would be extended and expanded to cover all clean, nonhydro renewable resources, including most biomass residues.
When combined with incentives and standards to increase energy efficiency, the Clean Energy Blueprint would save consumers (including farmers) $440 billion between 2002 and 2020. Increased energy efficiency and renewable energy use would help reduce the need for fossil fuels, thereby lowering energy prices and bills for all consumers. For example, by 2020, natural gas prices are 27 percent lower under the Clean Energy Blueprint than under business as usual, saving consumers nearly $30 billion per year.
The Renewable Energy and Energy Efficiency Investment Act of 2001 (S. 1333, Sen. Jeffords, I-VT) -- which also includes a renewable portfolio standard of 20 percent by 2020 -- would create even more benefits for farmers and rural economies. Renewable energy use would be 75 percent higher under S. 1333 than under the Clean Energy Blueprint, because higher electricity demand due to less investment in energy efficiency and combined heat and power plants means more renewable energy is needed to reach the targets.
