Serious money

By Jeff Beach Agweek

MINNEAPOLIS — The ethanol industry’s desire to crack low-carbon fuel markets is creating new opportunities for farmers to get paid to change the way they grow corn.

“At the end of the day, there’s serious money to be made with these climate-smart practices,” said Brian Jennings, the CEO of the American Coalition for Ethanol.

Jennings said even small changes on tillage and nitrogen use can help ethanol plants tap into markets with a low-carbon fuel standard, such as California. In such markets, ethanol plants can get a premium price that can be passed on to farmers, if the farmers have adequately documented those changes.

Quantifying carbon-reducing practices has become a major focus of the ethanol industry.

“In the last couple of years especially, we’ve really transitioned from maybe a BTU producing industry to one that has to be a low-carbon BTU producing industry, said Ron Alverson, a Chester, South Dakota, farmer and an early adopter of what are now referred to as climate-smart agricultural practices.

At the recent American Coalition for Ethanol conference in Minneapolis, tools for calculating the carbon intensity, or CI score, were a primary focus. That includes a free calculator at the ACE website, ethanol.org.

The same conference also honored Alverson for his contributions to the ethanol industry, giving him the Merle Anderson award, named for a farmer from Climax, Minnesota, who helped organize the American Coalition for Ethanol. The award is the group’s highest honor.

“There’s no one in the corn or ethanol industries that has done more than Ron Alverson to help farmers and ethanol producers to understand that there’s money to be made by taking action to reduce your carbon intensity,”Jennings said.

“I think this industry has been reluctant at first to look at some of the climate policies coming down the pike, and understandably so, fearing that it could cause more costs for them than any benefits or opportunities,” Jenning said. But he added that Alverson has dug into the science behind what farming practices affect a CI score.

“He’s worked with the scientists at Argonne National Laboratories, within the Department of Energy on the GREET model (Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation) which is the global gold standard for measuring and quantifying greenhouse gas emissions from all sorts of transportation fuels,” Jennings said.

Before ethanol

The award was from the ethanol industry, but Alverson said growing corn is really at the root of it all.

“I was really passionate about corn way before I was about ethanol, so I helped start the South Dakota Corn Growers Association way back in 1987,” he said.

But when ethanol came along in the 1990s, he and other growers in Lake County put together a plan to form a plant of their own, which is Dakota Ethanol at Wentworth, South Dakota.

“This was really spurred by the development of the ethanol industry and Minnesota,” Alverson said. “We looked over across the border and saw all these plants springing up and said, ‘You know, we should try to do that in our backyard, too.’”

While things have not always been rosy for the ethanol industry, the investment has paid off.

“If we could improve the corn basis in our area, … you know, maybe 5 to 10 cents a bushel, we can make this thing work,” Alverson recalled. “Well, you look back on history, it’s been fantastic.”

Carbon pipelines

Another development in the ethanol industry is the push for carbon capture and storage from ethanol plants.

Dakota Ethanol is one of the plants to sign on to the Summit Carbon Solutions pipeline project. Alverson said he did not expect the controversy that has come to surround the Summit pipeline and similar projects.

When some counties in South Dakota passed ordinances to put a moratorium on pipelines or restrict where the pipeline might run, Summit sued those counties, and Alverson was willing to attach his name to the lawsuits as a Dakota Ethanol founder and corn grower.

Summit is still trying to obtain route permits in the five states where it would run, with hearings set to begin in South Dakota in midSeptember.

Some landowners have been vocal in their opposition to the project, which would capitalize on federal tax credits that encourage carbon capture and storage and help open up the clean fuel markets, like California.

Alverson said he went to California as early as 2012 to pitch the efforts of Lake County farmers to store carbon in the soil as a way to get a premium for fuel from Dakota Ethanol. That effort failed, but he said they were encouraged to look into carbon capture and sequestration.

“One of the parting things they said in the last meeting we had, ‘You guys should really do CCS. You’ve got this carbon, really pure carbon stream coming off your fermentation vessels and you need to sequester that and that’ll reduce your CI 25 to 30 points. And we would love to have that low carbon ethanol in California.’ So that planted that seed,” Alverson said.

But without the right geology to sequester the carbon emissions near their own plant, that means a pipeline to an area with the right geology, which in Summit’s case is western North Dakota.

So what would he say to landowners resistant to the pipeline?

“I would tell them ‘I completely understand your reluctance on this because it seems like if there are benefits, you might not get any. But think of the big picture and you know, think of the example of the ethanol industry and what’s that done to corn prices? And what’s that done to all grain prosperity across the upper Midwest. So this pipeline could kind of be the same kind of a thing,’” he said.

The pipeline projects have drawn opposition from environmental groups too, but Alverson says it benefits the whole planet.

“If you really think that climate change is going to be a big problem in your future, you should be for this,” he said.

Decades the making

Alverson said his interest in corn and soil health was inspired by a challenge from professor at South Dakota State University.

A few years later, after returning to the farm, he thought about his old professor, who said farmland in the area had lost half its organic matter since the ground was first broken by the plow. The challenge was to build it back up.

“We changed dramatically,” said Alverson, an early adopter of reduced tillage practices and growing more corn.

The farm’s change began in 1983, and he says he has the data to document his climate-smart farming practices.

“We’ve been monitoring that soil carbon in the same exact spots for the last 40 some years. And we’ve just about doubled our soil organic matter. So it can be done. We know it can be done,”

Alverson said. “We’re living proof of it and we got all these soil test records to prove that. Now Alverson is helping lead the way forward on helping farmers reduce their carbon intensity score, the new focus of the ethanol industry, Alverson is part of a new project in a seven-

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