Tuesday, December 9, 2014

Just in

Farm Bureau: Significant costs, no meaningful benefits with proposed power plant standard

Washington—EPA’s proposed standard for existing coal-fired power plants will not only jeopardize the reliability and affordability of electricity nationwide, but also punish farmers and ranchers, who are doing more than their part in supporting energy independence and reducing fossil fuel use, Farm Bureau said in recent comments to the agency.   
In the proposed rule, released on June 2, EPA is targeting a 30-percent reduction in GHG emissions (from 2005 levels) by the year 2030 from existing power plants.   

The biggest problem with EPA’s plan is the significant cost for utilities in complying with these planned rules.  Utility companies can and will pass these costs on to their customers, who will then pass the costs down the line.  That’s not an option for farmers and ranchers.  
“Farmers and ranchers are price takers, not price makers, so they lack the ability of many other sectors of recouping their costs by passing them onto customers,” Farm Bureau said. “Higher energy costs for farmers and ranchers mean higher farm input costs.”  

EPA projects the proposed standard will cause electricity prices to go up nationwide between 6 and 7 percent in 2020 and up to 20 percent in some areas. But these high costs don’t come with the benefit of meaningfully reducing carbon dioxide emissions on a global scale.   

“Imposing added energy costs on our own economy while other economies are not held to the same standard not only puts U.S. producers and consumers at a disadvantage, it serves little environmental purpose,” according to Farm Bureau.   

 The proposed standard is expected to eliminate an additional 54,000 megawatts of coal-fired electric generating capacity—greater than the entire electricity supply of New England. Most of these retirements are projected to occur within the next five years. Such a tight timeframe further increases the threat to electric reliability, which is a must for farmers and ranchers who use electricity to care for their animals, irrigate their crops and power many other essential tasks on their farms and ranches.   

Another big problem is that the proposed standard will drive up demand for natural gas, the principal feedstock in the production of nitrogen fertilizer, which many farmers rely on to grow crops. The cost of fertilizer could very well climb right along with the natural gas prices.   
Though this rule specifically targets existing coal-fired power plants, EPA’s assertion that it has the authority to regulate greenhouse gas emissions across the economy means manufacturers, refiners and many other sectors including agriculture could be in the agency’s crosshairs next.    

“Increases in other energy prices, fertilizer and machinery will hold negative consequences for agriculture while at the same time making U.S. farmers and ranchers less competitive internationally. In many cases, higher production costs due to increased energy prices lower net producer returns and farmers will respond by reducing overall production,” Farm Bureau warned.   

EPA in September 2013 released a related rule that addressed new power plants, proposing a standard of 1,100 pounds of carbon dioxide per megawatt hour.  This proposal would basically eliminate the approval of any new coal-fired powered plants in the future.  For farmers and ranchers in a large part of the country, coal supplies all or most of their electricity.  Coal is an inexpensive, abundant and reliable source of energy – the very type of electricity source that agriculture needs in order to remain viable and competitive.   

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