KCARE ENVIRONMENTAL NEWS

SOIL CARBON AND CLIMATE CHANGE NEWS

From Kansas State University's:

Consortium for Agricultural Soils Mitigation of Greenhouse Gases

(CASMGS)

http://www.oznet.ksu.edu/ctec

Charles W. Rice, K-State Soil Microbiology, National CASMGS Coordinator

(785) 532-7217 cwrice@ksu.edu

Scott Staggenborg, K-State Extension Northeast Area Crops and Soils

Specialist (785) 532-5833 staggen@ksu.edu

Kent McVay, K-State Soil and Water Conservation Specialist (785)

532-5776 kmcvay@ksu.edu

Steve Watson, CASMGS Communications (785) 532-7105 swatson@oznet.ksu.edu

February 4, 2004

No. 30

This week's issue:

Science, Research, and Policy:

* Full-Cost Greenhouse Gas Accounting for Agricultural Operations

* Faster Tree Growth May Not Stem Global Warming

National:

* Record Day At the Chicago Climate Exchange

* Underground CO2 Storage Project: An Expensive but Potential Approach to Carbon Sequestration

International:

* Report Discusses Government-Level Policies on Use of Terrestrial Carbon Sinks

* Greenhouse Gas Reduction Targets Begin to Pressure Certain Industries in “Kyoto” Countries

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Full-Cost Greenhouse Gas Accounting

for Agricultural Operations

Agriculture’s role in greenhouse gas mitigation or release is often focused mainly on soil carbon (C) sequestration. But two other greenhouse gases (GHGs) are also commonly associated with agricultural activities: methane (CH4) and nitrous oxide (N2O). Combined, changes in these three GHGs can give us an idea of the net Global Warming Potential (GWP) of various management practices in agriculture, says Phil Robertson, professor of crop and soil sciences at Michigan State University.

Michigan State University is a member of the Consortium for Agricultural Soil Mitigation of Greenhouse Gases (CASMGS), which also includes K-State. Chuck Rice, K-State professor of agronomy, is national coordinator of CASMGS.

The most complete approach is to use “full-cost GHG accounting.” This approach takes into account changes in soil carbon levels, as well as the net changes in carbon dioxide (CO2), CH4, and N2O associated with the manufacture of inputs, use of fuel, use of lime and nitrogen fertilizer, management of animal wastes, soil microbial activity, and so forth. Combined, changes in these three greenhouse gases can give us an idea of the net Global Warming Potential (GWP) of a given agricultural system, Robertson says.

Many of the institutions within CASMGS are performing full-cost GHG accounting as part of their research efforts. Michigan State University researchers have analyzed 9-year results from four such studies: A conventional-tillage, no-till, and organic cropping system; and a successional forest.

Using this approach, the lower the GWP number, the better. A positive GWP indicates that the system is emitting GHGs. A negative GWP number indicates that the system is reducing (or sequestering) GHGs. In these studies, the lowest GWP was from the forest system, followed in order by no-till, organic, and conventional tillage.

“This type of analysis is extremely valuable from a policy and management perspective because it shows how we could achieve even greater GWP savings. Cropping systems could benefit substantially from efforts to mitigate N2O production, for example. These efforts could take the form of better nitrogen conservation by basing fertilizer rates on seasonal soil and plant tests, by applying fertilizers closer to the time of crop uptake, by planting cover crops to remove nitrogen from the soil solution during the non-growing season, and possibly by using nitrification inhibitors.

“Significant savings could also result from using organic N fertilizers such as leguminous cover crops or manure; by reducing diesel use with either biogas production or better mechanical efficiencies; by managing soil acidity to reduce the need for lime applications; and by using cover crop and other residue management strategies in addition to no-till to increase soil carbon.

For the full article, published in the proceedings of the 2003 North Central Extension-Industry Soil Fertility Conference, see: http://www.oznet.ksu.edu/ctec/CASMGSnewsletter/Jan04-1.htm

-- Steve Watson swatson@oznet.ksu.edu

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Faster tree growth may not

stem global warming

A new study, published in Science, indicates that the potential for soils to soak up atmospheric carbon dioxide is strongly affected by how long roots live.

The study, by researchers at Argonne National Laboratory, Duke University, University of Illinois at Chicago, and Oak Ridge National Laboratory, was funded primarily by the U.S. Department of Energy's Office of Science.

The scientists’ measurements revealed that the roots of loblolly pine but not sweetgum trees growing in CO2-enriched air at two experimental sites remained intact far longer and transferred less carbon into soils than scientists had expected.

"Our data showed that fine root replacement varied from 1.2 to 9.0 years depending on root diameter and forest type," said Argonne environmental scientist Roser Matamala, lead author of the Science article.

Co-author William Schlesinger, Dean of Duke’s Nicholas School of the Environment and Earth Sciences, called the root study results "a huge change from dogma, which says that these roots turn over all the time. This really says the roots can last quite a while."

"Some forests would do a better job than others in taking up carbon dioxide from the atmosphere and placing it into the soil," Matamala said. "Pine forests have slow root replacement, which decreases the potential to accumulate carbon in the soil in the short-term, while the fast root replacement coupled with increased root production in the sweetgum forest led to a rapid and significant increase in soil carbon.”

"The major implication for greenhouse management strategies is that some forests won’t transfer carbon from the atmosphere to soils at the speed we need them to do it to reduce global warming," said co-author Miquel Gonzalez-Meler at the University of Illinois at Chicago.

For full details, see:

http://www.anl.gov/OPA/news03/news031121.htm

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Record day at the

Chicago Climate Exchange

The Chicago Climate Exchange (CCX), the US-based voluntary emissions trading market launched in mid-December, 2003 saw a record day of trading on Jan. 9 when 21,000 tonnes of 2004 vintage emissions were traded at $0.95 per ton.

Included in the amount was one trade of 10,000 tonnes, the largest single trade so far at the CCX.

2,500 tonnes were traded per day in average in December. The record day might suggest that 2004 could see an increase in trading activity, even if the voluntary nature of the CCX is likely to set clear limits to its potential.

“We did not believe that liquidity would reach these levels until some time later this year,” said Richard Sandor, Chairman and CEO of the CCX. “We also have noted that the bid/ask spread is continuing to narrow.”

For more details, see:

http://www.chicagoclimatex.com

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UNDErground CO2 Storage project:

an expensive but potential approach to carbon sequestration

The U.S. Department of Energy wants to inject the greenhouse gas underground into depleted oil reservoirs after converting it into a liquid form.

The Teapot Dome project, now in the planning stages, could be one of the world's largest test sites for the method. It would store CO2 from a natural gas processing plant more than 300 miles away beneath the 10,000-acre oil field in central Wyoming.

So-called carbon dioxide sequestration has been tested at smaller sites nationwide but never on such a large scale, said Vicki Stamp, a project manager for the Rocky Mountain Oilfield Testing Center, which manages Teapot Dome.

Used in enhanced oil recovery for decades, pumping carbon dioxide into underground reservoirs is being touted by the Bush administration as one of the most promising ways to counter the greenhouse effect.

Teapot Dome — named for a nearby rock formation and the same one that was at the center of a scandal in the 1920s — is currently in its preliminary engineering and testing stages. Storage could begin by 2006 and last seven to 10 years, although Nummedal says managers "don't really know the upper limit yet."

When a reservoir is full, the pipeline is taken out and the hole sealed up. "The objective is to keep it sealed underground forever, hundreds or thousands of years," Nummedal said.

Talk of a national CO2 testing center started early last year. But it wasn't until managers found a source of carbon dioxide later that summer that the idea became a reality.

Anadarko Petroleum Corp., which owns an adjacent oil field, is extending its existing CO2 pipeline from a natural gas processing plant in western Wyoming and has agreed to direct some of its 125 million cubic feet of CO2 to the test site, Nummedal said.

The gas will then be pressurized and injected as a liquid into the reservoirs through a pipeline. It could stay underground for a very long time, since the reservoirs that would store the CO2 held oil and methane gas for millions of years, said Susan Hovorka, a University of Texas researcher.

The storage process — particularly compressing the CO2 — is expensive. Some estimates put it as high as $100 per ton, though Nummedal and others said they don't yet have cost estimates for Teapot Dome.

Even if it is a success, the Teapot Dome project could have little impact by itself.

"Globally we are releasing 7 billion tons of carbon per year," Nummedal said. "The amount we will be putting away here will be in the hundreds of thousands of tons."

But he added: "If we look at all the suitable, depleted oil and gas reservoirs in the world, and we were able to fill all of them up, we would be able to store the total global emissions over the next 100 years."

Some environmentalists worry about gas bubbling through cracks in the Earth or leaking into aquifers that supply drinking water.

"We very clearly need some field demonstrations of a storage system to make sure (we) don't have any surprises," said David Hawkins, director of the Natural Resources Defense Council's Climate Center in Washington, D.C.

Nummedal and others stress they're testing Teapot Dome reservoirs for those concerns.

-- Associated Press, Jan. 28, 2004

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Report Discusses Government-Level Policies

on Use of Terrestrial Carbon Sinks

A recent report from Resources for the Future compares the approaches of the governments of Japan, Canada, and the European Union member countries toward using terrestrial carbon sinks to meet their respective Kyoto Protocol carbon reduction targets under Articles 3.3 and 3.4.

Japan appears likely to rely most heavily on forest and biological sinks to meet its Kyoto targets, while Canada will not. For the EU, the role of sinks is likely to be even smaller, with sinks playing no role for some EU countries. The final decisions have not yet been made for any of these countries.

"Forest Carbon Sinks: European Union, Japanese, and Canadian Approaches," Resources for the Future, October 2003, http://www.rff.org/rff/Documents/RFF-DP-03-41.pdf

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GREENHOUSE GAS REDUCTION TARGETS BEGINNING TO

PRESSURE CERTAIN INDUSTRIES IN “KYOTO” COUNTRIES

Scanning the news reports coming out of the European Union (EU) and elsewhere over the past two months, it is evident that the scale of greenhouse gas reductions that will have to be made to meet the Kyoto targets is beginning to cause some concern within certain industries. This is increasing the interest in emissions credit trading.

In the EU’s Emissions Trading Scheme (ETS), the National Allocation Plan (NAP) for allowable emissions by industry is supposed to be established by 2005. Details of how much each industry or company will have to reduce emissions are beginning to emerge, and some “sticker shock” is setting in.

For example, the EU Energy Commissioner, Loyola de Palacio, said late last month that the EU ETS could cause some EU companies to go bankrupt or move overseas. Cement, steel, metal, pulp & paper and glass are some of the sectors concerned about their competitiveness with companies from countries without the sort of climate policy measures the emissions trading scheme (ETS) represents.

Not everyone within the EU agrees, of course. Some believe that emissions trading is a modern and innovative tool to meet CO2 reduction goals in a very cost effective way.

The ETS is part of the EU’s strategy to reach its target under the Kyoto Protocol, a target de Palacio said the EU probably would stick to, even if Russia does not ratify the Protocol.

The UK and the Dutch are probably the furthest along within the EU in the process of setting emissions reduction targets and emissions trading schemes.

For example, with the publication in January of the UK draft national allocation plan (NAP), the reality of the EU ETS has now dawned on any UK company covered by the scheme. Investments in Clean Development Mechanism (CDM) projects is increasing among UK industries. CDM projects are basically alternative energy and energy efficiency projects being constructed or proposed in developing countries. Carbon sink projects, such as reforestation, may also qualify as CDM projects.

Every week, several more companies are getting in touch with the UK Climate Change Projects Office (CCPO), a business advisory office sponsored by the government. UK companies could purchase tens of millions tonnes of CO2 through CDM projects over the next few years.

Companies in the UK are also paying particular attention to what is being done in Canada and Japan, two of the main actors in the CDM market.

Companies are looking to buy CDM credits in order to meet domestic targets as well as developing CDM projects to sell credits on to the UK and EU markets. However, smaller companies are more likely to use brokers or consultancies.

In the first two weeks of 2004, Point Carbon has registered five completed trades in the EU emissions trading market (ETS), adding up to a total of 51,000 tonnes of CO2 traded.

In addition to this comes the 60,000 tonnes trade brokered by Evolution Market in late December. While this may not seem like much, it certainly gives reason to encouragement for those hoping for a liquid market.

The bid-offer spread has steadily narrowed over the last couple of months, which indicates that the EU ETS as a market is a little less sporadic than it was a few months ago. The price level is climbing steadily. Volumes, however, remain low, and are expected to stay that way for some time yet.

Another interesting development is that since mid-December, there have been both bids and offers in the market for 2006 and 2007 allowances.

Meanwhile, the Development Bank of Japan (DBJ) and the Japan Bank for International Cooperation (JBIC) will jointly establish a "carbon fund" by this summer to fight global warming.

According to Kyodo News, the fund will be established in the amount of 10 billion yen, with the two governmental banks contributing 2 billion yen. The remaining 8 billion yen will be put up by private companies such as trading houses, electric power suppliers and oil companies.

Japan is struggling to reach its Kyoto target, and both the Japanese Government and companies have shown great interest in CDM projects as a way to cut greenhouse gas emissions.

Canada is also struggling to reach its Kyoto target.

-- Steve Watson swatson@oznet.ksu.edu

along with various January 2004 news reports from Point Carbon http://www.pointcarbon.com

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MEETINGS OF INTEREST (All dates are 2004 unless otherwise noted.)

April 13-15

15th Annual Earth Technologies Forum

Washington, DC.

Co-sponsored by the International Climate Change Partnership (ICCP),

and the Alliance for Responsible Atmospheric Policy, in cooperation

with the U.S. EPA, the UNEP, the UNDP, U.S.DOE, U.S.AID, Environment

Canada, Industry Canada, Japan Ministry of Economy, Trade and Industry,

Australian Greenhouse Office, Netherlands' Reduction Plan for the

Non-CO2 GHGs, World Council for Sustainable Development, IETA, and over

90 endorsing associations and organizations.

For details, see http://www.earthforum.com

May 2-6

Third Annual Conference on Carbon Sequestration

Alexandria, VA