Carbon Credits - or Farming in North Dakota

Courtesy of Anthony Watts I am posting this story from his Web Page (Watts Up With That) today, since it relates to the ongoing Carbon Credit discussion.

Simply put the National Farmers Union Carbon Credit Program sells the “credit” that farmers in, say North Dakota, create when they carry out various different farming practices that don’t generate as much carbon dioxide. For example if you practice “no-till” farming of corn and soybeans, then you don’t, obviously, use a tractor to till and thus don’t generate as much carbon dioxide. (By leaving the untilled soil and remaining material in the soil undisturbed so that it does not emit carbon dioxide, and methane and additional carbon dioxide are not emitted - coincidentally it is usually good farming practice since it reduces soil erosion and helps hold nutrients in the soil). Thus, for example, as Bloomberg points out, a farmer who does not till 800 acres can save 470 tons of carbon (dioxide). This then becomes a credit that can be sold, and is apparently currently worth about $3,000 a year.

Thus a site that generates a large quantity of carbon can buy these “offsets” from the farmers saving carbon, and set that against their own production. The North Dakota Farmers Union of some 3,900 members, apparently shared some $9 million last year, up from $2.6 million in 2007. However, if the farmers are doing this already, and for other reasons, that does not stop them selling the credit and taking the money. Except that Anthony gives the story of one farmer that has changed his mind. It is reproduced with his permission.




I have changed my mind about participating in the carbon credit program. And have resolved to give the money I received to St Jude’s Children’s Hospital.

Here is why.

Recently I sat in the fire hall with a few dozen farmers. We had been invited to hear how we can get paid for carbon credits.
The speaker explained how their satellites can measure the carbon in our land individually and how much money we could get. Then asked for questions.

I asked “what is the source of this money”?

The presenter said it comes from big companies that pollute.

I asked “where do they get this money”? He had no answer.

So I answered for him, asking, “won’t it come from everyone who pays their power bill”? He then agreed and said “that could be”.

I then said isn’t this about the theory of man made global warming? he said “we are not going to talk about that”. Here they are on the prairie soliciting land for carbon credits tempting us with free money.

I believe that agreeing to take their money means you agree with taxing cattle gas also, because methane is a greenhouse gas 20 times more powerful than carbon. I believe taking this money without considering its source makes us no better than the bankers who lent money to people, knowing they could not pay it back. Collecting their fees then selling the bad loans in bundles to someone else. They did not care where the money came from either.

Let’s be clear.

Carbon is not a new commodity! No new wealth is being created here! Is this the way we want to make a living? Let me ask you, what if their satellites determine that your land has lost carbon? You will get a bill, not a check, right? If you make a tillage pass you will get a bill for emitting carbon, is this not correct?

It is also a fact that this income will, in short order, get built into your land cost. You will keep very little and be left with the burden of another bureaucratic program.

Let’s be honest, we feel compelled to take this money because of the need to be competitive, however we also need to hold true to our values and lead by example that means placing our principals ahead of money.

No good citizen is opposed to using the earth’s resources wisely, however, wisdom means a person who has both intelligence and humility. In my view many of the proponents of man made global warming have the first and lack the second. We are able to exercise our freedom in this country because we have abundant, reliable and affordable power. It is ironic that we sat in front of the flag in that fire hall and considered trading our liberty for money.

I’ll leave you with a quote from Roy Disney:

“Decision making becomes easier when your values are clear to you”

P60. Pick Points

There seems to be a fair bit of chat in the blogs at the moment about the fate of the “cap and trade” legislation that has appeared in the House. It has drawn an editorial comment from the Houston Chronicle, and a column at U.S. News It is beginning to be viewed as only a first step, without likely passage this year. Kevin Drum feels that it is too weak to start with, open to abuse, and unlikely to get any stronger as it progresses through the process. On the other hand Grist is disappointed that it doesn’t deal with agricultural waste, the literal BS, which is specifically exempted. The intent is to have something to take to the Climate Change Meeting in Copenhagen in December, and the Huffington Post thinks it is better as a job creator than in dealing with climate change. At Climate Progress the feeling is that there aren’t enough votes to get it through the Senate. And Democrats from coal states are leary.

Despite the warm words for renewable energy, and the comforting thoughts of the legislature, in the real world companies out there trying to build market share are finding it tough going. Biofuel Energy is one of the latest that has to face this reality after losing $84 million in 2008, and without the needed margins between the prices of corn and ethanol, it is facing bankruptcy. The company produces some 230 million gal/year of ethanol. (15,000 bd). Renew Energy, another ethanol producer, went bankrupt in February. A calculation on relative profit has recently suggested that planting corn would yield $89 per acre, while soybeans would yield $108 per acre. Demand for corn is anticipated to exceed that which can be grown on 80 million acres this year, but the relative costs argue against planting corn after corn (as opposed to soybeans) and thus it is anticipated that less than 80 million acres will be planted. (Which will turn some of the economics around, but not favorably if you are trying to make ethanol).

Oops! The smooth relationship between Turkmenistan and Russia (er, Gazprom) seems to have just sprung a bump.

Ashgabat has expressed interest in participating in the US-supported trans-Caspian pipeline (TCP) project, which would become part of an export route to Europe that evades Russian control. But so far, Turkmen officials have made no firm commitments to the TCP route. The East-West spur is estimated to cost about $1.5 billion to build. The April 3 statement took repeated swipes at Russia, but gave no indication that Turkmen leaders were ready to embrace the US-backed TCP route. In not so subtle terms, the statement accused Russia of trying to bully Turkmenistan on energy-related issues.

It is not Gazprom’s week, since Moody has just lowered their debt rating, and with the slump in demand for natural gas, the company is talking about reducing its investment program. On the other hand it sold $350 million worth of bonds on Friday, and is now selling gas directly to Ukrainian industrial customers. However it is still expected that Turkmenistan will ultimately sign that contract with Russia.

After several months of falling numbers, the number of rigs exploring for oil and natural gas went up by 4 (to 1,043) this week, though it still fell a couple for natural gas (808 for natural gas, 224 for oil). Four wells, including three horizontals have just been completed in Illinois in what is claimed to be an innovative new layout (among other things the horizontals intersect the vertical) but the main plays continue to be in the gas shales. Even though activity in the Barnett shale, for example, has been cut 40% over last year, it still affects some 70,000 jobs, according to a recent report. Development is still going forward with the Marcellus Shale. Normally there would be some increase in demand over the summer, since about 25% of electricity is now fueled by natural gas, but with stocks high and lots of gas currently available, this may not help stop the falling gas price.

With the glut in natural gas, this may not be the best of times to note that Sakhalin finally shipped the first LNG cargo, bound for Tokyo on April 1, and (marking the change from Shell management) they toasted in vodka, not wine. The LNG market is revising some opinions about Shtokman and Norway would like to be considered as a place to build the tankers.