Render Unto Caesar

I send a check to the Washington State Department of Revenue yesterday; it covered the Business and Occupation (B&O) Tax we've been incurring since starting to produce electricity in August. Unlike the income tax charged by the federal government and many other states, the B&O tax is based on revenue rather than profit. The rate varies depending on the type of revenue (the chart above shows the rate for manufacturing; the rate for service businesses is much higher at 1.5%, while some types of food processors pay a rate as low as 0.138%). However, many in the business community hate this tax because it keeps on accruing right through a recession, even when losses are piling up.

A great history of Washington State taxes found here shows that we never intended to have this needs-blind tax--it was an emergency measure to raise money during the Great Depression after the state supreme court struck down a voter-approved income tax. Three-quarters of a century later, Washington remains one of a half-dozen states without an income tax (four more votes failed, most recently in 1975). The resulting reliance on property and especially sales taxes earns our state a special distinction: the most unequal tax structure in the nation.

Voters in Oregon just approved a hike in their income tax rates, but preemptive opposition immediately appeared against taking such measures here to fill the $2.6 billion state budget shortfall. So the Legislature will spend the next month struggling through more cuts, and I'll get ready to send another small check in three months--if nothing else, we at Farm Power are doing our part.

More Rexville Pictures Online

Our builder recently updated their webpage. The first part of the digester section features several photos from our project, but the Farm Power Rexville page has two dozen shots from various stages of construction and completion. One of my favorite shots is the delivery of our genset--it came halfway across the country on a truck and then moved the final one hundred feet to its resting place by crane (this was back in May 2009). Check out the rest of the Andgar website too--we hope to have another project listed there soon!

Seattle Renewable Energy Meetup

For those of you already planning for after the holidays, I'll be speaking in Seattle on Thursday evening, January 21st, at the Renewable Energy Meetup. By then Farm Power Rexville will have almost five months of operations behind it and perhaps I'll even have some more progress to report on Farm Power Lynden. I've been giving a development-themed presentation for so long that I need to redesign it to reflect the fact we're actually producing power now! I'm looking forward to other conferences and presentations in 2010, so watch this space for more information.

One gigawatt-hour

We recently produced our one millionth kilowatt-hour (kWh) of electricity. That sounds impressive compared to how much an individual home consumes (10-12,000 kWh a year), but the utility industry refers to production in terms of MWh (a thousand kWh) or GWh (a million kWh) which makes the milestone seem less imposing. Our generator is making a little bigger impact on the needs of the Puget Sound Energy Green Power program, producing a bit over one percent of all the renewable energy purchased by voluntary customers.

The New York Times published an article critical of green power programs, but one of their strengths is the ability to bring electricity usage into more human-scale terms. PSE's Green Power comes from about a dozen distinct and relatively small projects in the Northwest, while the larger utility system draws power from hundreds of often-enormous plants spread across the western U.S. and Canada. Unlike other states, Washington requires all renewable energy premiums to stay in their respective programs rather than padding utility profits. We've been very happy working with the PSE program, and we hope their customers who are familiar with us feel more connected to their electricity usage--our generator is running day and night, turning out kilowatt-hours for you!

Are cows worse than coal?

Just when the "clean coal" public-relations campaign seemed to be losing momentum, the Worldwatch Institute came out with a report blaming livestock for over half of all greenhouse-gas emissions. I can't imagine a better gift to the coal industry; the consensus has always been that burning coal is the single largest cause of warming, but now more confusion threatens to push the debate backwards.

The report makes a number of questionable claims, but one stands out: Worldwatch contends that since livestock have been domesticated, even their breathing should be counted as a human-caused emission. This ignores the reality that huge numbers of wild animals, especially methane-producing ruminants, used to roam the earth without ever registering the 25-gigaton CO2 impact ascribed to modern livestock. For example, the American buffalo population two hundred years ago likely exceeded the current population of all American dairy and beef cows combined. A report with so little concern for consistency resembles propaganda more than research.

The second half of the article reads like an extended advertisement for veggie burgers, with the implication that replacing meat with "soy analogs" could eliminate those inflated greenhouse-gas emissions. Meat has become a pretty easy target for a variety of activists and I won't try to defend it, but I do reject the claim that all animal proteins cause terrible environmental impacts relative to a vegan diet. Here are some reasons why dairy is at least as sustainable as soy:

• Production of soy protein does not use materially less land than production of dairy-farm protein; this holds true for both industrial and organic production. I encourage any reader to run the numbers--for industrial methods, both end up at about 750 pounds of usable protein per acre.
  
• Up to half of dairy cow diets typically consist of forage crops--alfalfa and grass that require minimal spraying, cultivation, and processing; in contrast, row crops like soybeans must be tilled and planted annually.
  
• American farmers produce twice as much milk with half as many cows as they kept in the 1920s. This smaller dairy population has less absolute and per-capita impact in every area.
  
• Manure in less-mechanized dairy farming is typically handled as a solid that produces little methane; farms that handle their manure as a liquid also have the ability to extract energy from that manure with an anaerobic digester--which not only destroys the methane but also can replace fossil sources of energy.
• Dairy farming provides its own fertilizer; while soybeans fix their own nitrogen, they still need regular doses of phosphorus and potassium (along with micronutrients) to stay in production.

Taking this report at face value should lead to calls to kill off our livestock while continuing to burn coal; hopefully, cooler heads will prevail and remind us that thousands of years of agriculture have fed us without cooking us.

Ribbon-cutting

On a beautiful Monday morning, September 28th, we held our ribbon-cutting ceremony for the Farm Power Rexville digester. Guests started showing up half an hour early, and soon we had three rows of cars alongside the project driveway and more folks parked on the road! But it was too nice of a day to worry about parking problems and people gradually drifted across the broad gravel area west of the digester towards the Rexville Grocery catering (including local apples and scones made with blueberries grown within site of the project). Some guests mentioned already having heard our story on KUOW radio while driving up.

The festivities began when Governor Chris Gregoire arrived. First we thanked our investors and other financial partners: Shorebank Pacific took top billing as our lender, and we were honored to have Puget Sound Energy CEO Steve Reynolds (with me and one of our investors at right) come to speak about his company's focus on sustainable energy resources and its Green Power program. Not only is PSE buying our power on a bank-friendly ten-year contract, but it has also helped get the word out about our project with press releases and the community-focused blogging of public-relations guru Andy Wappler; they even allowed us to use some of the photos they took at the ribbon-cutting (except for the first one, all the pictures on this blog post are courtesy of PSE).

Next we thanked our manure-related partners: Andgar Corporation completed our digester on time and on budget, lending their expertise accumulated on five previous projects to make sure everything worked right. The two dairy farms just north and south of the project, run by the VanderKooy and Kuipers families, received special appreciation for their absolutely indispensable role. Then everyone from the program up to that point lined up to cut a ribbon in front of the mechanical building overhead door.

Cutting the ribbon are Kevin Maas (Farm Power), Steve Reynolds (PSE), Garritt Kuipers (Beaver Marsh Farms), Daryl Maas (Farm Power), Jae Easterbrooks (Shorebank), Bryan Van Loo (Andgar), Jason VanderKooy (Harmony Dairy), Gerrit Kuipers (Beaver Marsh Farms), and Eric Vander Kooy (Harmony Dairy).

With the project now "open", we invited the governor up to speak to the crowd. She told us that she is a big fan of anaerobic digesters and has now visited three of them. She also continued the day's dairy theme by emphasizing the contribution of embattled farmers to the state. The Capital Press posted a video with part of her speech (and some words from dairyman Eric VanderKooy as well!). We were honored that Governor Gregoire made time to visit our event, and our community could see clear evidence that her priorities include clean energy and agriculture.

A final few words came from that great friend of Skagit County agriculture, state Senator Mary Margaret Haugen. Then we brought up Steve Reynolds and Governor Gregoire again to help us start the generator; we were standing on the stage outside the building, but with a push of the mouse button on my old iBook our 750kW Guascor roared to life and the program concluded.


Many guests stayed around for the better part of an hour, looking over the site and catching up. The Skagit County agricultural community was out in force, and other elected officials made time to visit: Representatives Barbara Bailey and Norma Smith from our 10th Legislative District, Skagit County Commissioners Sharon Dillon and Ron Wesen, 40th District Representative Dave Quall, House Energy Committee Chair John McCoy of the 38th District, and Mayor Ramon Hayes of La Conner. We thank everyone who came to celebrate with us!

Farm Power Lynden

Our Congressman--Rick Larsen of Washington's 2nd District--put out a press release about our USDA grant, but otherwise the publicity has been limited. We'll see whether that continues after today's announcement of stimulus-funded state energy grants and loans; Farm Power Lynden was one of several anaerobic digester projects funded. The state energy program emphasized job creation, so our partnership with Van Wingerden Inc.'s new greenhouse project helped us compete--we are thrilled to be among those chosen to pump sustainable investment into Washington's economy.