A Push to Turn Agriculture and Farm Waste Into Fuel
Despite federal and state programs to convert corn into ethanol and soybeans into biodiesel to fuel cars and trucks, the United States has never before regarded farming as a primary energy producer.
That changed when Congress in August passed the climate provisions of the Inflation Reduction Act, which provides $140 billion in tax incentives, loans and grants to replace fossil fuels with cleaner renewable energy that lowers emissions of carbon dioxide.
Along with the wind and the sun, the raw materials needed for a significant portion of that energy come from agriculture — alcohol from fermenting corn, and methane from the billions of gallons of liquid and millions of tons of solid manure produced by big dairy, swine and poultry operations.
Despite pushback from environmental groups concerned about increased pollution from farm waste, developers across the country see opportunities to build ambitious renewable energy projects to convert crops and agricultural wastes to low-carbon energy.
“There is not a single renewable energy producer in the country that is not looking at or already taking steps to install new technology, expand their facilities, or thinking about building new plants in response to the federal tax incentives passed last year,” said Geoff Cooper, the president and chief executive of the Renewable Fuels Association, an industry trade group.
In January, Avapco, a biofuel company that operates an ethanol refinery in Thomaston, Ga., about 60 miles west of Macon, was awarded an $80 million grant by the Department of Energy to build a plant capable of producing 1.2 million gallons of jet fuel a year from wood chips. And on a 2,500-acre site near Hennepin, Ill., Marquise Energy is collaborating with LanzaJet, which makes low-carbon fuel, to build an ethanol and biodiesel plant to produce aviation fuel for jets taking off from Chicago’s two major airports.
The emphasis on energy production is a big shift in American farm policy that started in the early 1970s when Earl Butz, the secretary of agriculture during the Nixon administration, encouraged farmers to plant “fence row to fence row.” Mr. Butz’s summons to produce enough food to feed America and the world, say authorities, converted farms from family-managed businesses to an industry dominated by commodity-producing, export-focused corporations.
The government’s plan to turn agricultural products into energy is intended to increase economic output, said John E. Ikerd, professor emeritus of agricultural economics at the University of Missouri.
“This new change to energy and carbon sequestration significantly expands the size and intensity of agricultural production,” he said. “You know, people can only eat so much.”
But environmental groups are wary about the additional waste the effort might produce. Phosphorus and nitrogen discharges from U.S. farms are “the single greatest challenge to our nation’s water quality,” according to the Environmental Protection Agency. More acres of corn, the most heavily fertilized crop, and more manure from larger livestock and poultry operations could increase nutrient pollution.
“The federal government, in the name of climate action, is dumping billions of dollars into an already poorly regulated industry,” said Emily Miller, a staff attorney for Food and Water Watch, a national environmental group.
One of the newest projects is on a 245-acre field just outside tiny Lake Preston, S.D. Last September, Gevo, a Colorado developer, broke ground for Net-Zero 1, an $875 million refinery to turn corn into low-carbon jet fuel.
Gevo says its “farm-to-flight” project will release 80 percent less carbon dioxide to the atmosphere than ethanol made by a conventional plant. A wind farm will power the plant, which will turn 35 million bushels of corn from about 100 South Dakota growers into 65 million gallons of jet fuel a year.
The production practices, including the equipment used to capture carbon from air emissions, will offset the carbon released in jet engine exhaust, said Patrick R. Gruber, the company’s chief executive. “This will be the cleanest ethanol plant in the world with the lowest carbon footprint,” he added.
None of it would be possible without government support. Virtually every phase of Net-Zero 1 production, and a good portion of its revenue, benefits from tax incentives, grants and direct payments for low-carbon renewable energy and the nearly $20 billion that Congress has approved since 2021 for the disposal of carbon dioxide. When the plant begins production in 2025, it will qualify for a clean fuel tax credit of $1.75 a gallon, plus an $85 tax credit for every ton of carbon dioxide it disposes of in deep subsurface caverns.
That’s not all. Congress also directed $40 billion to the Department of Energy for loan guarantees to finance innovative carbon-reducing projects. Gevo expects the department to approve a $620 million loan guarantee to pay for 70 percent of the Net-Zero 1 construction costs.
And in September, the Department of Agriculture awarded Gevo a $30 million grant to pay its corn growers a bonus if they use “climate smart” growing practices to produce their crops.
In neighboring Iowa, Greenfield Nitrogen is developing a $400 million plant near Garner to produce 96,000 tons of zero-carbon fertilizer from ammonia — a compound of nitrogen and hydrogen.
In addition, nearby wind farms will generate the electricity needed to separate hydrogen from oxygen in water molecules, part of the process of creating zero-carbon fertilizer from ammonia. The Inflation Reduction Act authorized a $3 tax credit for every kilogram of this “green hydrogen.”
Three dollars may sound small, but it can add up quickly, said Linda Thrasher, a co-founder and the president of Greenfield Nitrogen, who explained that 176 kilograms of hydrogen is needed to produce a metric ton of ammonia. “That’s $528 per ton of production, which is very lucrative and is a game changer for the green ammonia industry,” she said.
Thousands of large livestock operations are also poised to take advantage of the tax benefits and subsidies. The American Biogas Council, an industry trade group, counts 2,300 biodigesters in operation in the United States that convert organic wastes to methane to burn in power plants or be used as transportation fuel. With tax credits in the new climate law, the council envisions the installation of 15,000 more, including 8,600 on large dairy, hog and poultry farms.
Roeslein Alternative Energy, a Missouri company, is building six biodigesters at large cattle and swine operations in Iowa and Missouri to produce methane for transportation fuel and electricity. The construction, paid for by the company, is part of an $80 million carbon-reducing demonstration project funded by the Department of Agriculture to produce methane from manure mixed with prairie grasses planted on marginal lands.
The $14 million expansion of an existing biodigester is underway on Bryan Sievers’s cattle farm in Scott County, Iowa. “It’s a new pathway for mixing conservation farming and energy production that farmers will adopt as fast as society accepts it,” he said.
Gevo executives assert that farms focused on producing energy will be a factor in reducing carbon from agriculture, which now accounts for 10 percent of U.S. greenhouse gas emissions. The contracts Gevo is developing with corn growers in South Dakota are intended to keep carbon in the ground by reducing the use of commercial fertilizer, increasing soil fertility and reducing erosion.
“We’re going to cause people to evolve,” Mr. Gruber said. “Some are already doing a great job. We want them to do better. How? By rewarding them for doing better.”
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