COMMENTARY
Capturing Value for Rural America: Strategic
Choices for Renewable Energy Investment
Editor’s note: This commentary was written by Thomas Dorr,
USDA Under Secretary for Rural Development.
The train is leaving the station. The rapid build-out of
renewable energy is a historic opportunity for rural America,
and the pace of development is accelerating. In this issue of
Rural Cooperatives, a team of USDA economists has ably
summarized recent research on the strategic choices arising
from this “renewables revolution” for farmers, investors, rural
utilities and government at all levels.
The stakes are high:
- Since 2000, ethanol production in the United States has
tripled. The aggressive Renewable Fuels Standard enacted
in December — 36 billion gallons by 2022 — will keep this
rapid development on track for years to come.
- Installed wind capacity in the United States has more than
quadrupled in this decade. Germany still leads the world in
total capacity, but the United States led in new capacity in
2005 and 2006, and the projections suggest that we will have
done so again in 2007.
- Shipments of photovoltaic units in the United States have
increased tenfold since 2000, and we lead the world in solar,
thermal, geothermal and waste-to-energy applications.
Renewable energy, in short, has become a noteworthy
American success story, and I fully expect this progress to
continue.
It is true that renewable energy is building out from a very
low base, currently between 6 and 7 percent of total U.S.
energy consumption. But it is also true that the growth rates
described above, if sustained, will rapidly expand renewables’
market share.
For rural America — and for USDA Rural Development
— this is a challenge as well as an opportunity. Several new
industries, largely rural and/or ag-based, are developing
rapidly. There are opportunities at every point in the
production chain. This is probably the greatest new
opportunity for wealth creation in rural America in our
lifetimes, and capturing a fair share of that value for rural
America is an important objective.
To help rural stakeholders and policymakers expand the
dialogue for winning strategies in this fast-moving and
increasingly competitive arena, USDA Rural Development
identified four areas
which are discussed
in this issue. The
choices we make
today will cast a
long shadow:
- Distributed wind and solar power must be integrated into
the grid. In addition, rural utilities will have to expand and
modernize the grid to move rural power in bulk to distant
urban markets — e.g., getting North Dakota wind energy to
Chicago.
- Biofuels face several logistical hurdles. The blend wall
barrier is a significant obstacle. It is important that we
increase the allowable blend level, increase the number of
flex-fuel vehicles and develop economically sustainable
solutions to incorporate more alternative fuels into our fuel
system. The barriers to pipeline transmission need to be
overcome.
- Not all business and investment models are created equal.
From a rural development standpoint, it is desirable to
encourage local ownership and control. It is important that
we identify ways to facilitate the aggregation of local capital
and create opportunities for farmers and other rural
investors to engage.
These and many other issues are explored in these pages. I
urge you to tune in to the larger discussion as well. Renewable
energy and its impacts on farmers and rural development will
be a major focus of USDA’s annual Agricultural Outlook
Forum, which will be held this Feb. 21-22 just outside
Washington, D.C. Two weeks later, March 4-6, the world
will gather in Washington, D.C., again for the Washington
International Renewable Energy Conference, or WIREC
2008. More than 80 nations will participate in Ministeriallevel
discussions, while hundreds of companies and several
thousand industry leaders will attend what will be 2008’s
leading renewable energy trade show and business conference.
These events are an outstanding opportunity to explore the
potential of renewable energy, and to review best practices
from around the nation and the world. I cordially invite you
to attend. The renewables train is indeed leaving the station.
The opportunity is real. Now is a great time to consider whether
and how you should get involved. I hope to see you there.
