San Joaquin Farm Bureau Federation

By Craig W. Anderson

Statewide, agriculture is threatened by two new mandates, the first from Senate Bill 100 and a California Air Resources Board ruling that defies state law.

SB 100 requires that 50 percent of the electricity generated in California must come from eligible renewable sources by 2030. It also establishes 2045 as the deadline for all-renewable or zero-carbon power generation. Fossil fuels are out.

Eligible renewable fuels include solar, wind, biomass, geothermal, small hydroelectric, renewable methane, ocean wave, thermal and fuel cells using renewable fuels. While these energy sources are contributing to California’s energy grid, at this time they appear unable to provide all the energy needs of the state as they total between 17 to 40 percent of the state’s energy production, depending on the information source. 

For example, Biomass plants – that burn biomass (wood waste) for energy – continue to be idled because of expiring contracts with utilities for the purchase of electricity. 

According to FM Benchmark – a facilities management resource Internet site –without these plants to dispose of wood waste from the management of forests, agricultural and urban sources will be severely constrained. The plants typically need waste from all sources to operate effectively. At a time when drought conditions have dramatically increased the amount of wood waste, idling these plants is not a good idea, says FM Benchmark.

A provision in the law allows new technologies we haven’t discovered yet to be used to meet future needs while protecting the environment. "There are concerns across the board, perhaps the major one being the technology doesn’t exist to accomplish this goal in agriculture," said Bruce Blodgett, SJFB Executive Director. "This is another mandate for something without the means to achieve it." And there is no guarantee the means can or will be developed.

According to the US Energy Information Administration, some of the advances needed to achieve 100 percent clean electricity possible by 2045 include:

better weather forecasting technology;
declining costs of wind and solar have made them more affordable;
energy storage technology costs continue to decline;
targeting energy efficiency during times of the day when renewables are less abundant – during the night hours  – "will also help the grid operate more efficiently"; and
"new advancements in the ability of large and small electricity users to shift usage toward times when electricity is cheaper" will help matters.

However, nowhere is there a "safe harbor" for agriculture operations that must run 24/7 during the year, in particular during various harvests.

Karen Mills, CFBF senior attorney for energy policy, said the renewable energy decree will send energy prices higher. "The renewable requirements and connecting to the sources for renewable energy have required increases in transmission."

She also said that growing dependence on wind and solar energy – two mainstays of renewable energy – changes how customers are billed for their electricity. Time-of-use periods are particularly difficult for agriculture and with 4-9 p.m. now a peak period. "It’s really hard for ag use around that period of time," Mills said. "It’s mostly going to be how users will be charged for electricity which will drive how farmers are supposed to be using it."

Blodgett said the situation becomes "brutal when all things are considered together: SB 100, the water situation, the Sustainable Groundwater Management Act, and the new proposed CARB regulations. Rural communities will be hit hard by the renewable energy mandate." The economic impact of SB 100 will have a negative effect on rural areas because that’s where farms and producers are primarily located and as costs begin to rise, jobs in those areas may be at risk.

Food processors are wondering what the effect will be on them because they need natural gas to cook food to make it safe and shelf-stable, said John Larrea, director of government affairs for the California League of Food Producers. "There are really no alternatives for us in terms of natural gas. Food processors are being put through some hard decisions and hard positions."

CARB adds to ag angst
The California Air Resources Board (CARB) has 16 governor-appointed members who are responsible for regulating the state’s air quality regulations and programs. Among the 16 are eight career politicians, an attorney, a physician, two college professors, a career government employee, a social justice leader, a chemical company CEO and a sole farmer/businessman who grows almonds and is a member of the Stanislaus Farm Bureau: John Eisenhut.

This is important, because CARB’s decisions directly affect the business of agriculture but the board has only a single, actual agricultural businessman.

New regulation from CARB
CARB is proposing a new regulation that would impose skyrocketing costs on fuel, energy and other necessities, said Assemblyman Jim Frazier, (D-Discovery Bay) in a statement. "CARB’s own economists estimate the proposal will add more than a dollar to the cost of a gallon of gas – more than nine times greater than the gas tax [Prop. 6] we just fought an election over."

Last year the state Legislature passed AB 398 designed to rein in the costs created by California’s climate program while still reducing emissions by using a cap-and-trade system.

AB 398 authorizes CARB to carry out the legislation which was scheduled to expire. However, the bill does not authorize CARB to trigger massive cost increases with zero accountability. AB 398 expressly directs CARB to take specific steps to limit the costs created by the program.

Cap-and-trade reduces carbon emissions by requiring businesses to buy an "allowance" for each ton of carbon they emit with a declining "cap" on the total number of allowances available. As the cap declines, the price of allowances can skyrocket, inflicting sharp costs on businesses, which are then passed down to consumers.

 

CARB is ignoring AB 398’s mandate to limit increases by proposing a revised cap-and-trade program that raises the price ceiling on allowances nearly twice as high as experts recommend. It would force price increases on gas, diesel, utilities, food and other necessities. The revision is universally condemned as being too high as it would cause unaffordable levels of costs long before the allowance price reaches its limit.

CARB’s plan would add $1.09 to $1.20 to the cost of a gallon of gas and increase operating expenses of businesses, threaten jobs, increase electricity costs and hurt low-income communities the most.

"I spoke to CARB and suggested that they look at asparagus and old vine zin as examples of their ignoring the cumulative impact of rules and regulations on agriculture," Blodgett said. "It shouldn’t get to that level but increasing the costs of fuel and energy isn’t good for agriculture."

He also said the renewable fuel mandate and CARBs decision to ignore the law "severely affects resource oriented industries. It appears these regulators are seeing what they can extract from businesses. The agricultural economy is going backwards with walnuts, almonds and grapes being examples. To now add additional costs is indefensible."

"As chair of the Assembly Committee on Transportation, we’ve held numerous hearings at which CARB was asked to provide data, performance metrics and cost-effectiveness numbers for the cap-and-trade programs," said Frazier. "Each time, they’ve provided little to no data, no performance metric, and no record of accomplishment."  

"There’s been no legislative oversight and no accounting for the dollars they’ve spent," he continued. "Yet given their consistent pattern of nonaccountability, they continue to move forward, unchallenged."

Frazier also noted that CARB has not acknowledged or explained the overall impact on the California economy "Nor are the voters being given any opportunity to weigh in."

"As far as the dairy sector is concerned, we don’t know what would be done with dairies that don’t comply with these regulations," said Jack Hamm, Lodi dairy farmer. "Even with low-interest loans to help farmers buy the technology and equipment needed, these plans seem intended to make us more dependent on government and that’s frightening."

Hamm said he spends time and money reporting to CARB now but wonders what will happen when farmers have to purchase three or four new pieces of equipment to maintain compliance with the assorted rules, laws, mandates and regulations needed to continue doing business. "CARB’s mandates seem to have no connection to the reality of running an agricultural business," he said. 

Brad Goehring owner of Goehring Vineyards, said, "Our experience with the Legislature and individual legislators is that we explain our point of view and they don’t listen. Their laws and regulations are pie in the sky and they don’t care what happens as a result of what they pass as law or create as regulation.

Regarding CARB, he said it’s apparent "to begin with, they don’t care about the significant adverse impact their rulings have on agriculture." 

With the state Legislature’s passage of SB 100 and CARB’s reckless proposal that would gut AB 398 the future appears rife with challenges. 

California Farm Bureau Ag Alert contributed to this story.