EnergyFair81702Rev

Agricultural Energy:  Understanding Usage Anticipating Policy Directions: 

Agricultural Energy: Understanding Usage Anticipating Policy Directions Douglas G. Tiffany College of Agriculture, Food, & Environ. Sciences University of Minnesota Windy River Energy Fair August 17, 2002

Today’s Talk: 

Today’s Talk Minnesota Agriculture is Unique, Diverse, & Geographically-Dispersed. Review History of Farm Energy Efficiency Examine Minnesota Ag. Energy Use Farm, Transportation, Processings Discuss Implications of Kyoto Accord/Climate Change Debates--- Standardize Energy Review Ag. Policy - Energy Policy Link Suggest Farmer/Industry Responses to Change

Sharing Elements of Four Projects Today: 

Sharing Elements of Four Projects Today Project for ILSR and ME3 conducted with Barry Ryan, U of M Project for Industrial Commission of N.D. conducted with Dwight Aakre, N.D.S.U. Minnesota Grain Flow Project with Jerry Fruin for MN Grain Transportation Consortium My Previous Work on Biodiesel and Ethanol Production Economics and Policy Work

Minnesota Ag. Products: 

Minnesota Ag. Products

1996 Minnesota Cash Farm Receipts: 

1996 Minnesota Cash Farm Receipts

1996 North Dakota Cash Farm Receipts : 

1996 North Dakota Cash Farm Receipts

1996 South Dakota Cash Farm Income: 

1996 South Dakota Cash Farm Income

Energy Efficiency in U.S. Agriculture 1978-94: 

Energy Efficiency in U.S. Agriculture 1978-94

Figure 5 -- U.S. agriculture has been using less energy since the late 1970s: 

Figure 5 -- U.S. agriculture has been using less energy since the late 1970s

Energy use in ag. has declined since 1978 due to replacement of gasoline-powered machines with diesel engines. : 

Energy use in ag. has declined since 1978 due to replacement of gasoline-powered machines with diesel engines.

Direct Energy: Fuel Consumed: 

Direct Energy: Fuel Consumed

Indirect Energy: Herbicide Substituted for Direct Energy : 

Indirect Energy: Herbicide Substituted for Direct Energy

Fertilizer: Indirect or Imbedded Energy: 

Fertilizer: Indirect or Imbedded Energy Anhydrous Ammonia 24.019 scf/lb. N Urea 33.384 scf/lb. N 28% Liquid N 28.437 scf/lb. N N in DAP 24.019 scf/lb. N P2O5 in DAP -0- scf/lb. N Muriate of Potash 6.834 scf/lb. K2O

MN On-Farm Energy Use--Crops: 

MN On-Farm Energy Use--Crops Crop Diesel Gas LP Elect NG Corn 9.37 1.15 9.58 35.63 3.945 Alfalfa 9.80 .81 -0- 37.23 .719 Soybean 7.43 .91 .75 27.50 .199 S.beets 28.92 2.00 -0- 100.75 2.950 Irr. Pot. 48.89 2.00 -0- 319.22 8.801 Dry.Pot. 24.18 2.00 -0- 205.27 2.931 Wheat 7.24 .89 .82 29.88 1.749

MN On-Farm Carbon Emissions from Crop Production (MT/A.): 

MN On-Farm Carbon Emissions from Crop Production (MT/A.) Crop Fuel Fert TotalMT./A Corn .0539 .0639 .1178 Alfalfa .0393 .0116 .0510 Soybean .0317 .0032 .0349 Sugar Beets .1477 .0478 .1955 Irrg. Potatoes .2182 .1426 .3608 Dryland Potatoes .1203 .0475 .1678 Wheat .0316 .0283 .0600

MN On-Farm Carbon Fees-Crops: 

MN On-Farm Carbon Fees-Crops Crop Fuel Fert Tot.@$100 Tot. @$265 Corn 5.39 6.39 $11.78 $31.23 Alfalfa 3.93 1.16 $ 5.10 $13.51 Soybean 3.17 .32 $3.49 $9.24 S.beets 14.77 4.78 $19.55 $51.79 Irr. Pot. 21.82 14.26 $36.08 $95.60 Dry.Pot. 12.03 4.75 $16.78 $44.45 Wheat 3.16 2.83 $6.00 $15.89

Production: Cow-Calf: 

Production: Cow-Calf

MN On-Farm Livestock Energy Use: 

MN On-Farm Livestock Energy Use Species Diesel Gas LP Elect. Dairy(15,000#) 34.50 3.00 16.50 600.00 Turkey(hd.) .10 .01 .50 1.24 Sw.Farrow(lit.) 9.55 1.11 4.06 148.25 Sw. Finish(hd.) 1.11 .11 .34 12.38 Beef Cow(hd.) 6.37 .74 1.62 59.25 Beef Finish(hd.) 4.78 .46 1.08 39.38

MN Farm Livestock Carbon Emissions from Fuels and Energy: 

MN Farm Livestock Carbon Emissions from Fuels and Energy Species MT/ Unit Dairy Cow (15,000 lb.) .2550 Turkey (hd.) .0014 Swine Farrow (litter) .0686 Swine Finishing (hd.) .0067 Beef Cow (hd.) .0359 Beef Finish (hd.) .0254

If Carbon Permit Fees Were Collected in Kyoto Framework:: 

If Carbon Permit Fees Were Collected in Kyoto Framework:

The Kyoto Accord : 

The Kyoto Accord U.N. Committee of the Parties-3 12/97 COP-4 Meeting in Buenos Aires 11/98 U.S. signed treaty to reduce greenhouse gas production to 7% below 1990 levels between 2008 and 2012. Administration position assumes “permit trading”,credits for “carbon sinks” Treaty never submitted for ratification—concern about China & India Dropped from further Consideration at Beginning of Bush Admin.--- No Senate Support--- Considering Other Mechanisms

Carbon Permit Fees: the Range: 

Carbon Permit Fees: the Range $100/ mt of carbon---- Administration Position----assumes international trading of carbon emissions $265/ mt of carbon---- produced by Wharton Econometric Forecasting Associates ( WEFA )--- assumes no international trading or credits for carbon sinks (EIA model concurs)

Alternative Carbon Permit Fees: 

Alternative Carbon Permit Fees $100/MT $265/MT Diesel Gal. $.3020 $.8003 Gasoline Gal. $.2640 $.6996 LP Gas Gal. $.1600 $.4240 Natural Gas Mcf $1.620 $4.293 Electricity kWh $.02732 $.07239 Coal Ton $50.36 $133.45

MN Farm Lvstk. Carb. Permit Fees: 

MN Farm Lvstk. Carb. Permit Fees Species @$100/mt @$265/mt Dairy(cwt.) $.17 $.46 Turkey(hd.) $.14 $.37 Sw.Farrow(lit.) $6.86 $18.17 Sw. Finish(hd.) $.67 $1.78 Beef Cow(hd.) $3.59 $9.51 Beef Finish((hd.) $2.54 $6.74

MN Farm Agg. Carb Permit Fees: 

MN Farm Agg. Carb Permit Fees @$100/mt @$265/mt Corn $88.4 Mill. $234.2 Mill. Soybeans $20.8 Mill. 55.0 Mill. Dairy $16.4 Mill. 43.6 Mill. Wheat $15.4 Mill. 40.7 Mill. _________________________________ Total $200 Mill. $529.5 Mill.

Carbon Permit Fee Per Farmer: 

Carbon Permit Fee Per Farmer @$100/mt @$265/mt MN $2297 $6086 ND $4065 $10,772 SD $2541 $6,732

Research Challenges for Policies Tied to Carbon Sequestration : 

Research Challenges for Policies Tied to Carbon Sequestration Determine Appropriate Carbon Sequestration Rates for Specific Soil-Tillage Regimes for Crops. Determine Equitable Level of Credits for Crops and Tree Plantings.

Transportation: Dairy Bulk Truck: 

Transportation: Dairy Bulk Truck

Transportation: Diesel Consumption Rates: 

Transportation: Diesel Consumption Rates Semi-Trailer 75.6 Ton-Miles/Gal. Rail Unit Train 260 Ton-Miles/Gal. River Barge 680 Ton-Miles/Gal.

Minnesota Ag.Transportation: 

Minnesota Ag.Transportation % of Statewide Total Transport Fuel Corn 26.6% Milk 23.1% Soybeans 14.9% Sugarbeets 12% Spring Wheat 12%

Agricultural Processing: 

Agricultural Processing

Summary: Minnesota Processors: 

Summary: Minnesota Processors Coal -Sugarbeets, the most @ 440,000 T./yr (.06T. Coal/Ton Sugarbeets) (Approx. 1 Ton of Coal/ Acre of SB) Natural Gas -Dairy Processing 7.3 million Mcf -Soybean Processing 4.8 million Mcf -Sugarbeet Processing 4.4 million Mcf

Processor Energy (cont,): 

Processor Energy (cont,) Electricity -Soybeans use 195 Million Kwh -Dairy uses 161 Million Kwh -Wheat Milling uses 125 Million Kwh

Most Affected:: 

Most Affected: Processing of Sugarbeets Processing of Soybeans, Milk, Wheat, Corn wet-milling General Rule: When livestock or microbes do the processing, then less exposure to carbon permit fees. When industrialized processing, then more exposure.

Considering the Agriculture-Energy Policy Nexus: 

Considering the Agriculture-Energy Policy Nexus

Farm Level: Energy Savings: 

Farm Level: Energy Savings Variable Vacuum Pumps, Milk Coolers Reduced Tillage, Better Diesels On-farm energy audits Improve Accuracy of Nutr. & Manure Applicat. Retire Older, Gas-Powered Trucks Computerized Sensors on Grain Dryers Better Electric Motors Are Available Buildings-- Insulation, Ventilation Systems Reduce Irrigation Energy Requirements, (at peaks) Use High Forage Diets for Ruminants

Dairy Highlights: : 

Dairy Highlights: High Farm Level Electric Use Good Opportunities To use Forages High Transport Charges Milk Drying Requires More Than Cheese Production

Produce Energy Crops: 

Produce Energy Crops Produce Biodiesel With Soyoil--- Energy Balance of 3.24 to one. Biodiesel Production with mustard oil may emerge. Produce Corn Ethanol Energy Balance of 1.34 to one. Ethanol Production from Cellulose is Emerging Consider Agro-forestry for carbon sequestration and energy crop with hybrid poplars.

Slide40: 

Mustard rotates w/ wheat, even dry-land wheat low water & fertilizer required suitable throughout the US w/ site specific breeding trials broad-leaf crop with high biomass potential power generation or ethanol production large tap root-- breaks up soil pans commercial crop today ~ 14,000 acres/year seed contain 25% to 40% oil oil can be 90% monosaturated--excellent for biodiesel crop provides rotation benefits for soil pests planted and harvested with wheat equipment Mustard Crops

Likely Responses; Transportation: 

Likely Responses; Transportation Better Diesels Enhanced Use of Rail and Barges Value-added Processing Closer to Site of Ag. Production

Likely Responses: Processors: 

Likely Responses: Processors Wheat Millers-- Current Use of Off-Peak Rahr Malting wants to use biomass. Soybean Crushers--- Use Off-Peak , Moving to Co-Generation Sugarbeets--Efforts to Reduce Coal Use Natural Gas is Attractive With Lower Emissions for Many Processors Ethanol Production from Potato Wastes

Keep Your Eye on This Issue:Expect Exciting Times with Energy Prices and Farm/Environmental Policy Until Cheap Fuel Cells Arrive in 15-20 years.: 

Keep Your Eye on This Issue: Expect Exciting Times with Energy Prices and Farm/Environmental Policy Until Cheap Fuel Cells Arrive in 15-20 years.

Further Interest in Topic? : 

Further Interest in Topic? Contact me: dtiffany@dept.agecon.umn.edu (612) 625-6715