Wednesday, July 30, 2008

Defining Offsets

Below is a story about the National Farmers Union's recent efforts to gin up visibility and support on Capitol Hill for offsets in the next climate bill. While I applaud their efforts for bringing needed focus to the offsets issue, it is dangerous to tie all of agriculture -- and the fate of offsets, to the Chicago Climate Exchange (CCX) model. That model does not contain the rigor in either project design or measurement that will be required under a mandatory climate market.

The danger of being too closely associated with the CCX is that all those groups who campaign against offsets -- saying they are not real, not measured, and just another subsidy for agriculture, have a much easier time of making their case if offsets are confused with CCX pilot program credits. They are NOT the same thing and it is HIGHLY unlikely that the CCX model of generating offsets will be recognized in the new law.

How can I say this? To my knowledge, there is not one major environmental group that supports the way CCX defines ag ghg reductions/offsets. Not even groups that are very supportive of the concept of ag offsets in a carbon market -- and have put a lot of their own political capital on the line, would be supportive of a system like this.

It will be extremely difficult for any member of Congress to push an offsets title that has zero environmental support.

But beyond the politics -- lets remember, CCX was designed to be a voluntary market -- and it has worked well for what it was designed to be. Once you move into mandatory reductions -- and a program that provides credits to pollute -- which is what an offset will be, we are in a whole new world with new challenges that must be addressed.

If lawmakers get the idea that offsets = CCX, the battle to get the maximum market for agriculture will be made that much harder.


Environment & Energy Daily

CLIMATE: Farmers try to raise visibility of offsets for next warming debate
Allison Winter, E&E Daily reporter0 - 7/30/2008

Farmers are already trying to plant seeds on Capitol Hill for the next climate debate, in an attempt to grow their share of any future cap-and-trade legislation.

The National Farmers Union and key farm state senators met on Capitol Hill yesterday to tout the farm group's partnership with the Chicago Climate Exchange. NFU is sending out checks this weeks to more than 2,300 farmers and ranchers that participate in its carbon credit program, capturing carbon dioxide in their soil in exchange for payments from the carbon market.

The farm lobby wants to highlight its program to lawmakers, in the hopes that agriculture might get more consideration the next time a climate bill comes around. "We want to say, 'Here's something that is working," said National Farmers Union President Tom Buis after a briefing with reporters.

The group was largely preoccupied with the farm bill prior to this year's climate debate, but they are ramping up their presence for the next round on climate legislation. They want to make sure U.S. farmers have a major role in any cap and trade system. And they want a bigger piece of the pie for offsets than the Lieberman-Warner bill would have given them.

Lieberman-Warner put a 15 percent limit on offsets -- the amount of carbon reductions industry can buy from landowners who plant trees, erect methane digesters or practice no-till farming. Lawmakers with a heavy interest in agriculture, such as Sen. Debbie Stabenow (D-Mich.), had an amendment that would have greatly increased the share available for domestic offsets.

Stabenow and Sens. Dick Lugar (R-Ind.) and Ken Salazar (D-Colo.) all praised farmers' participation in carbon markets yesterday. Lugar is a carbon-trader himself. He planted black walnut trees on his Indiana farm to sequester an estimated 3,400 tons of carbon.

But Stabenow said agriculture continues to face a hurdle of proving that it can really reduce carbon. "The big debate is whether or not these are real offsets and can be measured," Stabenow said.

Some environmental groups, like the Natural Resources Defense Council, are skeptical of agricultural offsets. They say the long-term benefits of the offsets are dubious -- if a farmer decides later to till his 'no-till' plot, for instance, he can release much of the carbon he was previously paid to store.

The other major criticism is that offsets might not reduce the carbon in the atmosphere, especially if they are going to farmers who were already doing some of these practices on their land. NFU's program with the Chicago Climate Exchange does not pay farmers for any practice started prior to 1999, in an effort to address that criticism.

"I think there was this assumption, 'Well they're going to do it anyway,'" said Buis. "But if there isn't anything to encourage good behavior, they are going to have to incentivize it."

In addition to the farm lobby, Environmental Defense and other groups are big proponents of offsets as a way to promote conservation, reward private stewardship and reduce carbon. GOP presidential hopeful John McCain supports the use of unlimited domestic and international offset projects for industry compliance (E&ENews PM, May 12).

Offsets are also less expensive than forcing industry to cut its emissions on its own. U.S. EPA and Energy Information Administration studies have shown unlimited offsets could lower the climate program's costs by as much as 71 percent.

The National Farmers Union started its program two years ago. The group is an aggregator for carbon contracts to allow small landowners who would not qualify on their own for the climate exchange's 5,000 ton minimum. NFU identifies farmers who want to participate, enrolls them in the climate exchange and sells their offsets as a group.

Since it began in late 2006, the program has traded more than 86 million tons of carbon offsets and generated $8 million for producers. More than 2,000 farmers participate -- almost half of them in North Dakota, the first state where NFU started the program. Buis said interest continues to grow, mostly by word of mouth.

"What we find is after the checks go out the first year, people go to the coffee shop and tell their neighbors and it grows," Buis said. "We haven't put on a wild marketing program. This is mostly word of mouth."

Friday, July 25, 2008

Geologic vs Biological Sequestration of GHG

The article below is talking about geologic sequestration, not to be confused with soil carbon sequestration. The difference? Geologic seq (often referred to as Carbon Capture and Storage or CCS) refers to capturing CO2 and pumping it underground into geologic formations (underground caves, caverns, mines, etc) and permanently trapping it there. Soil carbon seq, or biological seq - refers to using plants and roots to convert CO2 into carbon, and storing the carbon in the soil as part of the soil.

A key point to note: If geologic sequestration is found too have too many complicating factors -- or is too expensive to become commercialized, than there may be even more demand for biological sequestration and agriculture offsets in the carbon market.

Environment & Energy Daily

Long-term effects of carbon [geologic] sequestration concern lawmakers
(07/25/2008)Katherine Boyle, E&E Daily reporter

Capturing large amounts of carbon dioxide emissions from power plants in order to fight global warming may be feasible in the future, but members of the House Energy and Commerce Committee are nervous about unintended consequences.

At an Environment and Hazardous Materials Subcommittee hearing yesterday, Democrats and Republicans alike said they were concerned burying carbon dioxide (CO2) beneath the ground could be risky and cause new environmental problems.

Rep. Hilda Solis (D-Calif.), for instance, is worried about the effects earthquakes could have on buried carbon stores, particularly in California along the San Andreas Fault. "We're preparing for a big California earthquake," Solis said. She questioned the corrosive properties of CO2 as well and asked what might happen when it is combined with lead or arsenic.

Subcommittee ranking member John Shadegg (R-Ariz.) reminded the panel of the gasoline additive methyl tert-butyl ether (MTBE), which was used to reduce tailpipe emissions but later found to contaminate large quantities of groundwater. "It would be a grave error to move forward with technology that would replace one environmental problem with another environmental problem," Shadegg said.

"That is the framework in which the American people will view whatever we do at this point," he added.

Shadegg also questioned how well the United States has examined environmental damage from carbon injection used to force oil and natural gas out of the ground.

Rep. Joe Barton (R-Texas) suggested EPA should focus more attention on CO2 conversion. "It yields more baking soda than we'll probably need, but it's dramatically easier to store" than gas or liquid, he said.

'Ace in the hole'

Newly appointed subcommittee Chairman Gene Green (D-Texas) questioned how carbon sequestration could affect groundwater reclamation from saline aquifers, if the water in those aquifers could be purified.

This week, U.S. EPA released its proposal to regulate the underground injection of carbon dioxide by power plants and other industrial pollution sources.

EPA's proposed rule is aimed at protecting drinking water sources during and after the geologic sequestration process. In carbon capture and sequestration, CO2 is captured from fossil-fuel power plants, industrial facilities or other sources and then compressed. At the sequestration site, CO2 is injected into deep subsurface rock formations via one or more wells.

Proposed EPA permitting requirements address well location, construction, testing, monitoring and closure. The goal is to prevent CO2 from migrating into underground water supplies. If the gas infiltrates drinking water, it could push other substances that occur underground naturally, like salt, into the drinking water source. It could also create a corrosive carbonic acid that could lead to CO2 leaks (E&E Daily, July 21).

Benjamin Grumbles, EPA's assistant administrator for water, emphasized that the EPA proposal is only meant to address drinking water concerns.

He predicted carbon capture and sequestration could reduce greenhouse gases by 15 percent to 55 percent over the next century. "Geologic sequestration may not be a silver bullet, but it may be our ace in the hole," he said.

Scott Klara, director of the Energy Department's Strategic Center for Coal, said DOE is working with universities, private partners, regions and states to ensure geologic sequestration will be a safe and viable way to reduce greenhouse gas emissions. DOE is working with regional partners on pilot projects to learn more about the technology needed.

"The ultimate success of sequestration will hinge, in part, on our ability to measure the amount of carbon dioxide stored on a site, prevent environmental impacts and mitigate" any harmful effects, Klara said. Another essential aspect is determining whether adequate storage space exists throughout the United States and Canada, he added.

Tuesday, July 22, 2008

Broad Support Emerges for Offsets

Apologies for my long absence on this blog. During early June, there was a vote on the climate bill and my energies were diverted into working on that. For any of you that follow politics, you know that sometimes in order to maintain the trust of those you are working with -- you just can't share everything publicly in real time.

But, now I'm back to providing as much good info as I can on the ag offsets issue - so please check back often.

Below is a letter with some very impressive signers in support of good offsets policy within a climate bill. This letter came about after the strong efforts of Senators Stabenow, Brownback, Crapo and others who pulled together an amendment that would have created strong offsets policy within a climate change bill.

As you can see by those signing the letter, a strong coalition has finally formed to champion good offsets policy within mandatory climate change legislation. Bravo to the groups who rolled up their sleeves and jumped in to shape what could be agriculture's third or fourth largest market: carbon.

Now it is important that the coalition remain together and continue to work with staff in the Senate and the House so that when a bill comes up and passes in the next Congress, agriculture's interest will have been fully accounted for.

June 12, 2008

The Honorable Debbie Stabenow
United States Senate
Washington D.C. 20510

Dear Senator Stabenow:

We are writing to thank you for your leadership
in promoting the key
benefits thatoffsets, particularly
agriculture and forestry offsets, can
provide in
addressing greenhouse gas emissions reductions. Offsets

projects are critical to ensuring that any legislation to
address global
climate change can achieve meaningful
environmental results in a
cost-effective manner. In
addition to these economic benefits of
emissions offsets
projects, they can help drive new technologies and

services, and provide extensive environmental benefits.

Your amendment to the Climate Security Act (S. 3036)
a useful framework for developing offsets policy
that will
engage agriculture and forestry interests,
utilities and industry
seeking to reduce their emissions,
entities that finance and develop
offset projects, and
environmental groups. We look forward to
continuing to
work with you and your staff to craft a robust,

sustainable, offsets policy that efficiently reduces costs
and maintains environmental integrity.


Agricultural Carbon Market Working Group

American Farm Bureau Federation

American Farmland Trust

American Soybean Association

Business Council for Sustainable Energy

Carbon Offset Providers Coalition

--Blue Source

--The Carbon Neutral Company


--Greenhouse Gas Services, a GE AES venture

--Kolibri Group

--MGM International

--N.serve Environmental Services

Coalition for Emission Reduction Projects

--American Electric Power
--Blue Source

--Deutsche Bank

--Duke Energy



--El Paso Corporation

--Environmental Credit Corp
--Equator Environmental
--First Climate

--Leaf Clean Energy Company

--MGM International


--Stark Investments

Deere & Company
The Dow Chemical Company


Duke Energy


Environmental Defense Fund

FPL Group

General Electric

National Association of Conservation Districts

National Barley Growers Association

National Association of Wheat Growers

National Cattlemen’s Beef Association

National Corn Growers Association

National Farmers Union

National Milk Producers Federation

The Nature Conservancy

NRG Energy