by Adam Waldeck
Earlier this month, the Southeast Energy Alliance held its 2012 Southeast Ag-Energy Summit with a number of key stakeholders and representatives in an intriguing discussion and debate over the importance of affordable, reliable energy to the agricultural community, the challenges presented by renewable fuel and electricity, and upcoming legislative priorities for the region.
High-level officials included the incoming Georgia Public Service Commission Chairman Chuck Eaton Georgia Agricultural Commissioner Gary Black, Chief Environmental Counsel of the National Pork Producers Council Michael Formica, Charles Hall of the North Carolina Soybean Producers Association, Executive Director of the Alabama-based Partnership for Affordable Clean Energy Lance Brown and many others.
As the keynote speaker for the event, incoming Georgia PSC Chairman Chuck Eaton stated: “As a regulatory body concerned with future capacity, I am concerned with removing generation sources or choosing one source over another without a mind to the future cost. And scarcity of sources will only make for higher costs in the future.”
Additionally, Georgia Agricultural Commissioner Gary Black discussed the importance of energy to the agriculture industry. “Sometimes we think of agriculture being in yesteryear. But it is as technologically advanced an industry as any other. And energy production is an important part of that $70 billion industry.”
The first panel of the program focused on the energy needs of the agriculture industry. Several of the panel participants focused on the large energy needs of the agricultural sector.
“Twenty-five to 30 percent of our production costs are tied directly to energy,” said Larry McKenzie of the South Carolina Farm Bureau. “Farmers have to make decisions looking 20 years down the road. We need a strong national energy policy so that our farmers can have certainty to make decisions about their energy use.”
The panel also focused on ways in which agriculture producers can help contribute to energy production. Frankie Hall, policy director for Florida Farm Bureau said that often “the problems come when farmers try to interface with the public utilities and various policies like net metering. If our producers can’t get a fair price for the electricity they generate, they have little incentive to spend money installing the systems.”
Most of the panel agreed that most of the regulatory challenges to the energy industry stem from the federal level. “They key is to have the state and federal regulators work together in a collaborative effort, or else you won’t get anything done because one entity will always overrule the other,” said McKenzie.
Another panel focused on the challenges and opportunities associated with the Renewable Fuels Standard. Participants included Michael Formica of the NPPC, Charles Hall of the North Carolina Soybean Growers Association and Benita Dodd of the Georgia Public Policy Center. Formica and Dodd both noted the need to reform the current RFS and to better utilize some of the “safety valves” included in the legislation.
“We pushed for a safety valve in the 2007 RFS as a way to offset price impacts from the combination of the RFS and weather based events,” explained Formica. “We were told that there were waiver programs already included in the program. The EPA this month denied our waiver request, leaving livestock producers to find other ways to compensate for large increases in operating costs.”
Asked if he thinks there will be any legislation to repeal or reform the RFS in the next Congress, Formica was hopeful, but focused on EPA’s waiver authority. “As far as EPA granting a waiver, there will be another round of requests in 2013. EPA has admitted they see the economics of a waiver changing once we hit the blend wall in 2013,” he said.
“Much of the national debate over the RFS has circled around corn ethanol, but one aspect of the program that is working is the bio-diesel standard,” said Hall. He stressed the importance of recognizing that soy-based fuels operate on a different standard and have a different economic profile, one that is free from the negatives associated with corn ethanol. Because of that, “we would not want to see legislative attempts to remove the bio-diesel requirements of the RFS,” he said.
According to Michael Whatley, Executive Vice President of Consumer Energy Alliance (CEA), the success of the 2012 Ag-Energy Summit will lead to several more energy events in the future. “Given today’s dialogue on a number of key energy and ag issues – including the RFS – it is clear that a number of topics will require a meaningful and responsible discussion by our policymakers in 2013. We were pleased to bring together these key industry experts today and look forward to continuing the conversation on these important issues to promote an all-of-the-above approach to energy diversification.”
The 2012 Southeast Ag-Energy Summit, co-hosted by the Georgia EMC and the Georgia and Alabama Agribusiness Councils, brought together regional stakeholders including Agriculture Commissioners, Farm Bureaus, Agribusiness Councils, elected officials, energy consumer groups and producers from six states. Participants included representatives from: South Carolina Farm Bureau, North Carolina Soybean Producers Association, Georgia Chamber of Commerce, South Carolina Forestry Association, Duke Energy, the Tennessee Poultry Association and the National Pork Producers Council, among others.