Save Energy, Save Money

Remarks by Bruce I. Knight, Chief, Natural Resources Conservation Service, at Energy from Agriculture: New Technologies, Innovative Programs and Success Stories Farm Foundation

St. Louis, MO
December 14, 2005

Good afternoon. I’m glad to be here to talk about USDA’s new Energy Strategy and the help that NRCS can offer to farmers and ranchers as they make their plans for next year.

Most of you think of NRCS as the soils guys. Our mission is soil, water, air and wildlife. My goal today is to inspire you all to see the linkage between energy conservation and natural resource conservation.

Farm Bill Forums

During the summer and fall, top USDA officials have crisscrossed the country, listening to farmers and ranchers identify their concerns, voice their struggles and share their hopes and dreams for the future of agriculture in the U.S. We visited more than 53 sites in 48 states to learn what farmers are thinking.

The focus was the next farm bill, but we also heard about the immediate issues facing farmers today. One of those is the rising cost of fuel and fertilizer.

In fact, farmers told us this is the single biggest financial problem they have. That’s understandable when you realize that oil cost about $40 a barrel last year and less than $30 a barrel in 2002. Today it’s $60 a barrel.

Higher oil prices are a double whammy. One farmer from Washington State put it this way, “As a farmer, I’m unable to pass the ever-increasing input price of diesel on to my customers, but I have to absorb everyone else’s fuel surcharges.”

High energy costs can be price breakers. It’s sobering to recognize that American farmers are paying $5.3 billion more for fuel and fertilizer in 2005 than they did in 2004.

This is both a challenge and an opportunity for change. High fuel and fertilizer costs send profits down. Now may be the right time for farmers to analyze the way they’ve been doing business—and consider some changes that can benefit both their bottom line and the environment.

Clearly, farmers can’t control the cost of fuel or fertilizer. But perhaps we can find ways to use less or optimize the use of one or the other or both, minimizing costs. Mission Impossible?
Not necessarily.
But it will require planning, re-thinking traditional approaches and perhaps investing in new technology and equipment. Will the alternatives work for me? This is what every farmer is asking. And this is where we can help farmers weigh their options.

USDA Energy Strategy

Last week, Secretary Johanns kicked off USDA’s Energy Strategy. This is a concentrated effort to look at both reducing demand for oil and natural gas and increasing supply through bio-fuels.

The Secretary likes to say, “President Bush and I would rather secure our energy from the corn fields of America than from the oil fields of the Middle East.”

Earlier this year, President Bush signed into law the first national energy plan in more than a decade. The President has asked all of us—federal agencies and the public—to be more energy efficient. There are many steps we can take—as general consumers—and as agricultural producers—to conserve energy.

The goal of USDA’s Energy Strategy is to identify both short and long-term steps that make sense to reduce energy costs. I know most of you are here to focus on new, renewable uses. Our topic is more a tried and true approach, but one where technology advances are equally exciting and advanced.

NRCS, of course, is emphasizing conservation. We’re calling our effort “Save Energy, Save Money.”

There are some very do-able strategies that farmers can employ to reduce fuel and fuel-based fertilizer. Our goal is to provide the information farmers need right now while they are making decisions for next year—determining what equipment to buy, what crops to plant, what tillage system to use.
Producers can explore different options to see which strategies will work on their farm or ranch. Cutting back on fuel or fertilizer or increasing efficiency with those inputs is one way to improve an individual operator’s bottom line.
But there’s also a payoff for our nation—improving the U.S. import/export balance and reducing America’s dependence on foreign oil. In short, saving energy is a sound business strategy that also benefits our country.
Energy Estimator
To help producers, NRCS has developed a simple, user-friendly, web-based tool we call the Energy Estimator. The first iteration, announced last week and available on our website now, focuses on tillage.
Farmers can get this tool on the NRCS website at www.usda.gov and in just three “clicks” determine how much they could save in fuel costs by switching from conventional tillage to no-till—or any other reduced tillage system. They just need to plug in their zip code, their crops and acreage and the price they expect to pay for fuel. For example, on a 1,000-acre corn farm, at last month’s diesel prices, a farmer who switched to no-till could expect to save $7.70 per acre, or $7,700.
This is the beginning. We’re going to build on this tool. Early next year, we expect to add a module to help farmers figure out how much they could save through improved irrigation systems—which will be considerable—about $8 to $40 per acre. A second enhancement will enable producers to predict their savings from switching from fossil fuel fertilizer to manure.
The NRCS website includes other energy-saving strategies as well. Over the next several weeks, we’ll be posting additional energy-saving information as well as some success stories. We plan to include a simple, do-it-yourself energy audit checklist. All of this information will be available at www.nrcs.usda.gov.
Some of the energy-saving ideas involve conservation practices that may be eligible for cost-sharing under our Environmental Quality Incentives Program or our Conservation Security Program—and Tom (Christensen) will talk more about those programs in a few minutes.
Other practices we recommend farmers can simply implement on their own without having to sign up for programs or fill out paperwork. (As a farmer, these are my favorites!) I want to mention some options briefly and then Larry (Clark) will discuss these and others in more detail.
Specific Examples
The kinds of energy savings we’re talking about will make a real difference for individual farmers—but they could also add up to tremendous savings nationally. Let me give you some examples.
I mentioned earlier that switching to no-till could save a farmer with 1,000 acres of corn up to $7,700 at last month’s diesel prices. On a national basis, doubling no-till acreage from 62 to 124 million acres could save 217 million gallons of diesel fuel and $480 million.
Individual farmers can save about $9 per acre when they move from a medium-pressure irrigation system to a low-pressure system. Those who move from high-pressure to low pressure irrigation systems can save even more--$41 per acre. Collectively, American farmers could save $167 million in energy costs if everyone moved to the more efficient low pressure systems.
Replacing old or inefficient irrigation pumps can increase water use efficiency by 10 percent, reducing diesel consumption by 8 gallons per acre. The producer with 1,000 irrigated acres would save more than $17,000. And if everyone improved by 10 percent, we could reduce diesel consumption by 80 million gallons and save a national total of $180 million.
There are other savings farmers could garner as well—by substituting manure for natural-gas based fertilizer. That change could save $85 per acre for a corn producer. If we doubled the use of manure-based nitrogen, together we could save about $1.2 billion and 100 billion cubic feet of natural gas.
Let me give you just one more example. If a farmer purchased an inexpensive “auto-steer” guidance system to reduce the overlap of nutrient and pesticide applications, the savings would add up to $6,000 on a 3,000 seeded-acre farm. And that would almost pay for the guidance system. Across the country, if producers reduced application overlap on 250 million acres of cropland, we could save up to $1 billion in fertilizer and pesticide costs.
These measures alone—if all of them were implemented—could save more than $3 billion per year for our agricultural producers.
We have more information on these strategies—and others—available on our website and in our NRCS offices. We encourage producers to visit us on the Internet or in their local service center.
We want to help farmers “Save Energy and Save Money.”