Power companies enlist farmers in war against global warming
Copyright 2000, The Indianapolis Star
Sunday, March 26, 2000
By Norm Heikens, The Indianapolis Star
Hancock County, Indiana, farmer Jeff Phares has long regarded himself as a conservationist, but utilities want him to do more.
Power companies are offering to pay Phares and other farmers to till their fields less frequently in order to control, of all things, global warming.
"It's a great idea," Phares said. "Farmers are constantly looking for ways to cut their costs and enhance their income."
Crops breath in carbon dioxide, a byproduct of burning coal, oil and other fossil fuels — and trap the carbon in plant tissues, primarily in the roots.The transfer tucks carbon away in the ground where it won't absorb the sun's heat and wreak havoc with the atmosphere.
Unless the soil is disturbed by tillage, that is.
Tillage opens the soil to air, which speeds decomposition of the roots and other dead vegetation. Carbon released during decomposition slips out of the soil and back into the atmosphere.
Utilities hope the so-called carbon credits they're signing with farmers will buy time until they can find more environmentally friendly power sources.
Utilities were looking into the credits even before the 1997 Kyoto, Japan, global conference on atmospheric warming. The United States signed the pact but the Senate stopped short of ratification.
People familiar with the trend say several factors are motivating utilities to consider the credits.
Anticipating tightening emission standards, utilities see the credits as an avenue to meeting future regulations and as a public relations forum on which they can extol their green credentials.
Utilities also are buying up the credits in anticipation of one day selling them as they increase in value.
Nations that did ratify the treaty are pushing ahead with efforts to slow release of greenhouse gases and recapture carbon and other emissions.
Midwestern power generators have come under intense criticism from Eastern states for emissions those states say are harming surface water and forests.
Cinergy is looking into buying carbon credits on cropland, said senior environmental scientist Eric Kuhn.
But the Cincinnati-based utility has leaned toward forest projects because scientists know less about the potential for cropland to capture carbon.
"Many people feel that issue will be unresolved for years," Kuhn said.
Trees and crops aren't the only alternatives scientists are considering.
Ideas range from stashing carbon in abandoned oil wells to stimulating ocean algae to consume massive amounts of carbon dioxide.
In the meantime, the vast expanses of Midwestern corn fields could be tapped quickly.
IGF Insurance, a crop insurer owned by Indianapolis-based Goran Capital Inc., late last year brokered a Canadian utility consortium's purchase of $700,000 in carbon credits from Iowa farmers.
At an average price of $1.50 per acre, the contracts covered the equivalent of farmland across three average-size Iowa counties.
Without divulging specifics, Goran chief executive Alan G. Symons said signatures are expected this spring on other, much larger contracts with foreign and domestic utilities.
IGF recently began pitching the credits to farmers in Indiana and other states in which the company operates.
The Midwest "will be a huge player in carbon credits," Symons predicted.
So new is the concept that it's unfamiliar to many Hoosier farmers. And some aren't impressed with the $1.50 price in Iowa.
They scoff that the price is worth less than a single bushel of corn.
Arlene Freeman, who farms 200 acres near Morristown with her husband, Tom, frets the contracts would prevent stirring the soil in emergencies, such as smoothing tire ruts created in rainy harvests.
"I wouldn't want to lock myself into it. There are so many things that can happen," Freeman said.
More important, Freeman would want at least $10 an acre to compensate for production losses associated with continuous no-till.
Carbon credits are an evolving business.
Utilities and landlords are scrambling to establish prices, and Symons thinks that once the idea catches on with utilities, the price will soar.
To better analyze credits, buyers and sellers need more accurate information about the capacity of fields to hold carbon. Indiana is the second state after Iowa to launch county-level meetings to gather information for augmenting existing soil maps.
Conservation officials this spring plan to meet with long-time farmers who recall drainage projects and crop rotations that might affect capacity of soils to hold carbon.
Soil conservationists are hopeful that carbon credits will encourage more no-till.
Said Jerry Talbert, a consultant to the National Association of Conservation Districts: "We look at it in the conservation community as one of the best opportunities in a generation to further conservation goals."