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  United States Department Of Agriculture Media Conference: Efforts To Reduce Greenhouse Gases And Help Develop Environmental Markets
  Thomas Vilsack United States Secretary Of Agriculture
  Dave White Chief of The Natural Resources Conservation Service
 

Wednesday, June 8, 2011

SUSAN: Hello. Good morning. Thank you for joining us for today's media conference.

On the line we have Agriculture Secretary Tom Vilsack and Natural Resources Conservation Service Chief Dave White. They are going to be talking about efforts to reduce greenhouse gases and help develop environmental markets.

Reporters, if you would like to ask a question of either of our panel members, please let us know by pressing *1 on your touch tone pad.

And, with that, I turn it over to Secretary Vilsack.

SECRETARY VILSACK: Susan, thank you very much. Thanks, everyone, for being with us today. I apologize for being a few minutes late with this call.

Last December in Cancun, we announced that USDA was going to make resources available through an innovative grant project and through our regular conservation program EQIP through a competitive grant for large scale demonstrations of greenhouse gas mitigation practices on private land.

We were hopeful that this announcement would trigger a number of opportunities for farmers, ranchers, and forest owners to show us how they could creatively reduce greenhouse gas emissions, increase sequestration, and also improve their bottom line.

We were hopeful that this effort would also lead to a leveraging of private sector demand for these services through emerging environmental markets. And we were hopeful that this would create opportunities for getter collaboration between ourselves, USDA, and the various states that are themselves establishing markets and that this would assist us in building the capacity within USDA to understand how these markets work and how we might be able to do more of this in the future.

We have been very pleased with the interest that has been expressed in this effort. And so today we are announcing awarding more than $17 million for greenhouse gas reduction projects in 24 states through the Conservation Innovation Grants Program.

This program was a competitive grant program, which was administered by NRCS and hopefully stimulating the development and adoption of innovative conservation approaches and technologies.

There was, as I said, significant interest in this program. We received 43 proposals from 28 states. All the proposals met the basic eligibility criteria and were then evaluated by technical experts. Nine large scale projects in 24 states were selected to receive 7.4 million. And I'll review those in just a little bit.

In addition, SES is providing up to $10 million in its regular EQIP Incentives Program, Environmental Quality Incentives Program, to provide eligible producers additional grant resources to implement conservation practices.

There are some very innovative and creative approaches here. Let me touch on a few of them. And then I will be glad to answer questions. And Dave White is here for any further comment and technical assistance.

In the State of Washington, an adaptation of first carbon protocol, to include tribal lands, will receive $1.226 million to the Confederated Tribes of Colville Indian Reservation to adapt and implement forest carbon sequestration practices and to develop protocols that will overcome legal and technical barriers faced by tribes in trying to get into these carbon credit trading markets. In the States of Idaho, Oregon, and Washington, there is a collaborative effort focused on agricultural soil carbon to develop a large scale agricultural soil carbon transaction in the regions of that state, $550,000 to apply to ecological services to work with landowners to provide a road map for monetizing carbon credits.

In bringing greenhouse gas markets, gas benefits to market in the States of Illinois, Michigan, and Oklahoma, we're seeing a $400,000 grant to the Delta Institute and its partners to create a system that allows producers to earn greenhouse gas credits for nutrient management and conservation practices on at least 60,000 acres.

The dairy industry stepped up with a $1.1 million grant to the Dairy Science Institute to work with dairy farmers across 12 states that include California and Florida, Idaho, Michigan, Minnesota, New Mexico, New York, Oregon, Pennsylvania, Texas, Washington, and Wisconsin and in those 12 states working with dairy farmers to develop a decision support tool that helps those farmers enhance their conservation efforts to reduce greenhouse gases.

In the States of Arkansas and California, we have a program involving rice production, a little over a million dollars to the Environmental Defense Fund, to develop and implement a first of its kind intuitive to demonstrate reductions in greenhouse gas emissions and rice production.

Ducks Unlimited is involved and engaged in an effort in the Dakotas, North Dakota and South Dakota, to develop tools for grassland producers to help them monetize carbon storage benefits. Hopefully that will result in rangeland that might otherwise be converted to cropland on 10,000 acres in North Dakota and 15,000 acres in South Dakota.

Estimating nitrous oxide reductions from nutrient management in the Chesapeake Bay Watershed area is also part of this program in Maryland and Virginia. A grant to the Chesapeake Bay Foundation to develop a tool for estimating nitrous oxide reductions from nutrient management, that could be extremely helpful in helping to clean up the Bay.

Piloting innovative beef and dairy greenhouse gas emission reduction strategies is part of an effort by the Unisom Resource Company in the States of Indiana, Kansas, Michigan, Nebraska, and New Mexico, Ohio, Texas, and Wisconsin to pilot test the methodologies that quantify and qualify carbon offsets and to stimulate that feed use efficiency in terms of beef and dairy industries.

A smart nitrogen application program is part of an effort in Iowa and Illinois through the Fertilizer Institute, which is going to receive $1.4 million to institute and develop a framework for delivering marketable carbon credits associated with nitrous oxide emission reduction when producers implement nutrient stewardship management practices on 50,000 acres.

All of this is designed to give us a better sense of what works and how we can develop these environmental markets over time. It produces a new income opportunities for farmers and ranchers and landowners, forested landowners. It creates better environmental benefits. And it also helps to stimulate better bottom lines for those farmers, ranchers, and producers and forested landowners.

So we are excited about this opportunity. And we were pleased with the amount of interest that was shown in this program, received a lot of good applications. And in 24 states, we are going to see activity in this area.

With that, I will be glad to answer questions.

SUSAN: Reporters, if you would like to ask a question of Secretary Vilsack? Also on the line is NRCS Chief Dave White. Please let us know by pressing *1 on your touch tone pad.

Actually, we do have some folks on the line now. Let's go to the Thomson Reuters. Let's go to Rory Kellell (Phonetic.). Rory?

THOMSON REUTERS: Secretary Vilsack, thanks for doing this call. I just wanted to see if you had an estimate for how many tons of GHGs these projects will reduce and also just what types of credit would be created, what kinds of offset credits.

SECRETARY VILSACK: We don't have an estimate in terms of tonnage. I think this is this program is primarily designed to begin to test market certain ideas and concepts that allows us to refine our measuring processes and refine how markets could be assisted.

Most of these are strategies for various types of production processes. So this is really sort of foundational work that is being done. But we are excited about the breadth of the foundation work involving a multitude of crops, the livestock industry in an aggressive way, really interested obviously in the fertilizer piece of this as well.

Dave, you may want to add to that.

MR. WHITE: Yes, sir. We're going to see a lot of work on protocols, on models, verifying models, things of that nature. For example, the Delta Institute on nitrous oxide in Illinois, Michigan, and Oklahoma, they are going to be ground testing those models with producers to see if they are accurate in how they measure nitrous oxide.

If you go to the other side of the country in California, environmental defense is going to be working with California rice producers. They are going to develop pilot projects with those producers to actually generate and market credits under California protocols. They are going to be getting their offsets verified by three different registries and sold under the California I think it's AB 32. That's their cap and trade portion. And then once they kind of figure that out, they are going to try and transfer that information to rice producers in the mid South. So we're going to see a whole variety of things happen here with models, protocols, and nitrous oxide and carbon credits.

SUSAN: All right. Our next caller on the line is from Arkansas Radio Network, Gary Digiseppe (Phonetic.).

ARKANSAS RADIO NETWORK: It sounded like the Secretary was about to further answer the question, but I wanted more details on the mid South project.

SECRETARY VILSACK: Gary, it's a little over a million dollars. It's $1.089 million, demonstrating greenhouse gas emission reductions in California and the rice production.

I don't know if Dave White can give you more details about precisely what that project is.

MR. WHITE: Yes. Gary, working with the rice producers and environmental defense, they're going to start these pilot projects.

My sense is they will start first in California. As you know, California operates, really, under a whole different world as far as a regulatory regime.

They're going to be looking at some rice practice, such as baling of rice straw, dry seeding, over wintering of water. I think what they're going to try and do, Gary, is to like create a menu of options for rice producers, put that into a model, have it verified.

Now, in California, they will have a market, but at some point in time, as the Secretary said, these will help us get ready for markets as they merge across the country.

SECRETARY VILSACK: I think this is an important point. Some of these projects will key into markets that are already existing and provide additional ways of determining what could be effective in those existing markets, but many of these projects are better designed, actually, for us to determine how we could set markets up and what we would be able to do effectively and efficiently to promote more successful markets. So it's a combination of keying into existing markets but also creating a foundation for new markets.

SUSAN: Next on the line with the Pittsburgh Tribune Review, Paul McMullen (Phonetic.).

PITTSBURGH TRIBUNE REVIEW: Yes. I was just looking to learn more about the project that is going on in Pennsylvania, like more details on that.

SECRETARY VILSACK: I can just tell you that it's part of the establishment of a stewardship tool kit that is going to be applicable in a variety of states. The overall project is a little over a million, $1.1 million. But it does affect 12 states, of which Pennsylvania is one of them.

But, Dave, if you want to add details in terms of that tool kit, what that involves?

MR. WHITE: Thanks. This is part of the dairy farm stewardship. It's part of the Farm Smart project. And what they are going to do is develop a stewardship tool kit where a producer can evaluate the various production techniques they use on a dairy. It's going to enable those producers to analyze their stewardship practices and get a handle on various sustainability measures, not only greenhouse gas but also energy, water quality. They're going to even look at stuff like food safety and the impact, the economic impact that dairies have on local communities.

Also going to be a big part of this is the market component. And my belief is that one of the key goals here is how can these markets help increase the profitability or reduce the cost for diary producers while improving their environmental performance? It's a pretty ambitious project.

SUSAN: We continue on the line with Chris Clayton from DTN. Chris?

DTN: Thanks again. A few of my questions have been answered, but how much private or nonfederal funding is being put into these projects? And how do these projects, then, or related projects move forward in the next few years with the budget impacts you guys see or expect to see from touch and conservation and research?

SECRETARY VILSACK: I'm going to have Dave White talk about the specifics of private investment in these particular projects, but let me just provide a response to your general overview question of what happens in constrained fiscal environments.

Really, what this is about is creating a foundation for dealing with those constrained fiscal environments. So as we do conservation, to the extent that we do a better job of modeling, measuring, quantifying the results of certain conservation programs and techniques and suites of conservation practices, we will do a better job of potentially attracting private sector investment in those results conservation develops, which, in turn, will result in our leveraging the federal dollars more effectively than we have in the past.

So this is really a leveraging. It's sort of an expansion and extension strategy for with constrained limited resources that the federal government can promote, with which it's going to promote conservation, how do you encourage and attract private investment that supplements what the federal government is doing and maybe allows conservation to continue to expand, notwithstanding the fact that you have got potentially fewer dollars? Dave?

MR. WHITE: Specifically on the leveraging aspect, these 9 grants amount to $7.4 million. They're being offered or being done under the Conservation Innovation Grant Program. That requires at least a 50 percent non federal match.

So the 7.4 federal funds will be matched by another 7.4, so roughly 14.8 million. The other ten million we're making available is through the Environmental Quality Incentives Program. And that is to help implement the practices that these various projects may develop.

In the Environmental Quality Incentive Program, it is a cost share program. The producers have to put their own funds in there. And generally the cost share ranges from 50 to 75 percent. So probably another five million or so will be farmer leveraged funds for the EQIP part.

SUSAN: Next on the line we have Wisconsin Public Radio's Steve Royzim (Phonetic.).

WISCONSIN PUBLIC RADIO: I just wanted to hear more about how Wisconsin will be impacted by this funding announcement. What are the two things that they will be sharing part of here? It looks like the dairy farm stewardship tool kit and the piloting innovative dairy greenhouse gas emission reduction strategies, you see lots of dairies. Can you kind of elaborate on those two, if you would?

SECRETARY VILSACK: Dave?

MR. WHITE: Yes. You don't want me to go over that other one again, right, the dairy farm stewardship? Okay. Let me just focus, then, on the innovative beef and dairy greenhouse gas thing.

This is an entity called Unisom Resource Company. And what they are going to be looking at is the efficiency of feed, feed use efficiency. They are going to also look at manure management.

In a broad sense, how do you do a better job with both of those? And then how do you simplify all this complex data management so a producer can deal with it?

They're also going to be looking for ways to help producers produce verifiable greenhouse gas reductions. And a part of this is going to be working with Canada on some of the markets. And, again, like the dairy farm stewardship tool kit, one of the goals here is, how can we enhance the economic viability of feed yards and dairy farms?

SUSAN: We have time for two more calls. Our next call comes from Tiffany Stecher (Phonetic.) with Climate Wire. And that will be followed by Phillip Rasher (Phonetic.) at the Des Moines Register. Tiffany?

CLIMATE WIRE: Yes. Hi. Thank you. Thank you, Secretary Vilsack.

I wanted to ask a question about the Delta Institute Project that concentrates on nitrous oxide. Nitrous oxide is interesting because it has almost 300 times the global warming potential as carbon dioxide. So I was wondering: a) was this taken into account when deciding to grant the project its funding and b) how will it be treated in potential future carbon markets given that nitrous oxide is much more potent than carbon dioxide?

SECRETARY VILSACK: Well, the answer to the first part of your question is yes. The answer to the second part I think somewhat depends on how these pilot projects evolve and what we learn from them.

Again, that's part of why we're encouraging this, because we see future income opportunities as well as environmental benefits that can accrue if we know how to measure, if we know how to quantify, if we know how to do this properly and correctly.

So, Dave, you can certainly weigh in on this, but nutrient management, what we have found, to just expand on your question just a little bit, we have recently done several assessments of what works in conservation generally in the upper Mississippi River and the Chesapeake Bay area. And what we found was that, in addition to a suite of conservation practices being focused and targeted to be most effective, they have to be combined with and coupled with nutrient management.

So, again, to the extent that we can ultimately get to a point where we can define the benefits, if we can quantify what certain practices and certain things actually what results actually occur from them, then that creates the basis for a potential market as it evolves.

If you can't quantify, if you can't verify, if you can't provide credible assurance that a certain practice is going to produce a certain result, you cannot create a market. You can't create that incentive for private investment.

So this is really designed, in part, to help begin to build that foundation for how you would go about doing that.

MR. WHITE: Yes. And, if I could follow on from that, that Delta Institute does deal with nitrous oxide. And that is the one where they are going to work with producers to ground test these models. And one of the key deliverables there is they're going to produce a document on best practices for policy makers. And I, for one, certainly welcome that.

But we also have two others, ma'am, that also deal with nitrous oxide in the Chesapeake Bay. As you know, the air deposition of nitrogen is a huge impact. And this one in the Bay area is going to evaluate three nutrient tools. You're going to be looking at adaptive nitrogen management, manure injection, and variable rate application and then determine exactly what is your NOx reduction from using those techniques.

And then the last one I would mention is with the Fertilizer Institute, they're going to create a program that will try to increase productivity and at the same time you get more efficient use of nutrients. They're going to be looking at a bunch of NOx protocols. And they want to create something they're calling the Smart Nitrogen Application Program.

So I think between those three grants, we are going to get some really invaluable information on nitrous oxide.

SUSAN: As promised, as we wind down, our last call comes from Phillip Rasher with Des Moines Register.

DES MOINES REGISTER: Oh. Well, Dave pretty much addressed the first part of my question. Secretary Vilsack, just to follow up on what you said before in terms of understanding what the aim in here is, to create the verification and quantification of these credits, absent Congress imposing, mandating some kind of cape and trade system, how do you ever get a sufficient market to make these credits valuable enough for producers to want to get them, earn them?

SECRETARY VILSACK: Well, a couple of things. First of all, there are a number of regional initiatives already in place, having been enacted by state governments that potentially play into what we're trying to do. In the Northeast, in California, in a number of other places, they have regional or statewide efforts underway. So it doesn't necessarily need an act of Congress to create a market.

Secondly, what we are finding is, even in local governments and local circumstances, we are finding the possibility of expenses for local governments in wastewater treatment, for example, could be mitigated by appropriate conservation practices. And it may make more sense for a community to spend money with its local producers that surround the community than investing in very expensive wastewater treatment operations that may not be necessary if they have the right kind of conservation practices in place and they can quantify the results from those conservation practices.

We know, for example, in Ohio, in the southern part of Ohio, there is this type of activity taking place. So I think this is not just a response to greenhouse gases, but it's also a reaction to other environmental benefits that may be important to have and people may be willing to pay for because it will help them avoid a higher cost in treating water or things of that nature.

So I don't think it necessarily requires an act of Congress. I think these markets are developing for a multitude of reasons, either by state legislation or by the fact that local government doesn't want to have to spend this much money to fix up its wastewater treatment facility. They can figure out a better way to do it and a more effective way to do it with their local producers.

So long as you can verify that practices are taking place and you can verify the results that you get from those practices, you end up being willing to pay for that result. But you've got to be able to quantify it and you've got to be able to measure it. And you've got to be able to verify it. And it's got to be credible. And that's what this program is designed to do, is to create those kinds of opportunities.

SUSAN: All right. With that, we want to thank everybody who called on the line and those who also had a chance to get their questions in. If you want more information about the announcement for efforts to reduce greenhouse gases and help develop environmental markets, log onto the nrcs.gov website. And that's where you can get all of the updates and information.

That concludes today's media briefing.