In what has become a holiday tradition, the wind industry scurried in December to launch new projects before a subsidy expires on New Year’s Eve.
The federal tax credit of 2.3 cents per kilowatt-hour generated applies to wind energy projects’ first decade of production. And that incentive has attracted major investors including Warren Buffet.
The “Oracle of Omaha” increased Berkshire Hathaway’s stake in wind power this month by committing to a billion-dollar project in Iowa.
Wind already accounts for nearly 25 percent of Iowa’s energy portfolio, but that figure is expected to rise dramatically when 450 new turbines are completed by 2015.
Rapid growth in domestic energy production was one of many developments this year with significant ramifications for rural America. So too, were Mother Nature and gridlock in Washington. Paul Yeager reflected on some of the biggest stories in 2013 and filed this report.
2013 began in a similar fashion as the year it followed: as lawmakers dealt with a severe case of “electile dysfunction” in Washington.
More than 500 days after a budgetary time bomb began ticking, congressional leaders defused the dreaded fiscal cliff at the 11th hour of the previous session. In last minute negotiations between Senate Minority Leader Mitch McConnell and Vice President Joe Biden, a combination of permanent middle class tax cuts and -- fresh tax increases on wealthy Americans - sealed the deal.
Other legislative wrangling had a major impact in rural America. After months of tedious work on the 2012 farm bill, House leaders acquiesced to a simple one-year extension of existing law. The extension, however, was a blow to farmers hoping for direction in U.S. agricultural policy.
The Farm Bill -- or lack thereof – proved to be a never-ending storyline for the 113th Congress, which endured one self-inflicted wound after another.
The only thing moving slower than Congress last winter may have been the Mississippi River. Barge traffic on the Mississippi River slowed to a trickle 150 miles south of St. Louis, forcing the Army Corps of Engineers to remove rock pinnacles from the beleaguered waterway near Thebes, Illinois.
Sen. Dick Durbin, D – Illinois: “I know this is a great matter of interest for all of us in the region.
The Mississippi, of course, is America’s primary waterway for grain exports, but a more controversial conduit also was in the news this year. The proposed Keystone XL pipeline would funnel crude oil thousands of miles from Canada and North Dakota to Gulf Coast refineries.
Proponents say the project would enhance U.S. energy security and create more than 50,000 jobs, but critics claim the project is an environmental nightmare.
While the full impact of the controversial proposal remains to be seen, the Obama Administration remained firmly on the fence. In a review last spring, the State Department expressed no major objections, but stopped short of fully approving the controversial project.
Despite the neutral response those opposed to the project continued to express their concern.
Byron Steskal, Holt County, Nebraska: “…at 830,000 barrels per day, at two percent, is 16,600 barrels per day, leaking undetected…in my water! On my property!”
Further west, the state of Colorado served as a microcosm of the rest of the country in the weather department. Initially, there was concern over dry conditions.
Brian Waggoner, Fort Collins resident: "Yeah there's snow on those mountains, yet we are seeing flames at the same time. It’s just unheard of to see this time of year. I just hope this isn’t the new norm of what we're going to be seeing every summer and every spring out here. It’s kind of frightening."
But, change was in the wind. And after sequential years of drought, forecasters called for a shift in weather patterns in the Rockies -- and other parts of America.
Brad Rippey, USDA Meteorologist: “The overall picture is certainly better than we were this time last year, especially for the Midwest. We still have a lot of concerns from California to the central and southern plains however.”
Things appeared to be changing in Washington too. After months of partisan bickering lawmakers agreed to an $85 billion package of spending cuts known as The Sequester.
And -- as fate would have it -- the cutbacks took effect just as the economy exhibited its most sustained improvement since the recession ended in 2009.
Half of the $85 billion in reduced spending would come directly from the defense budget. The remaining amount was slated to come from discretionary programs like education, law enforcement and through furloughs of federal employees.
Rep. John Boehner - Speaker of the House: “Americans know that Washington has a spending problem. It's hurting families, it's hurting small businesses, it must be addressed.
For the most part, the Sequester had a muted effect in rural America, largely, because major cuts in agricultural spending appeared to be looming on the horizon in the farm bill.
And with little direction from Washington, America’s farmers set out to plant the largest number of acres to corn since 1936. But soil temperatures struggled to get much above the freezing point in the heart of the Corn Belt. And the National Oceanic and Atmospheric Administration reported that April was the America’s second-coldest month since 1895.
Timely rains delivered crucial moisture to most of the region, but with temperatures hovering more than 10 degrees below average, Mother Nature delayed planting for weeks and the Mississippi River escaped its banks in some areas.
As the calendar advanced to May, Old Man winter returned for an encore. Planters that in many years would have been halfway through their annual chore were idled under a blanket of snow that set records in several Midwestern states.
Within weeks, though, triple-digit temperatures returned to the Grain Belt, while tornadoes roared across the southern plains.
An EF5 twister demolished Moore, Oklahoma marking the town’s fourth devastating touchdown since 1999. EF4 tornadoes ravaged the area in 2003 and 2010, while another EF5 racked up over $1 billion dollars-worth of damage nearly fifteen years earlier.
Back in Colorado, tinder-dry brush fueled the largest outbreak of wildfires in the Rocky Mountain State’s history.
Fires in the Black Forest area alone charred 25 square miles. And memories of the Waldo Canyon blaze of 2012 prompted residents to take evacuation orders seriously.
Tina Kuhlman / Evacuee: "I think everybody’s afraid after the fires last year. I think people are getting out a little faster this year."
By August, wildfires also were burning near Yosemite National Park and the Sierra Nevada Mountain Range. The Rim Fire blackened an area larger than Chicago while other blazes ravaged portions of California and Arizona as late as December.
And only months after being scorched by the wildfires, Colorado had a new meteorological malady: Torrential rain. More than 6 inches fell in Boulder County over a 12 hour period, as flash floods wiped out roads and damaged farms.
Ken Seeley, Jamestown, Colorado: “Oh gosh, five times more water than I've ever seen here.”
Just weeks later, a rare autumn blizzard paralyzed parts of the high plains. As much as 4 feet of snow fell in parts of South Dakota, leaving thousands without power and killing thousands of cattle.
Monty Williams, South Dakota Rancher: "A lot of guys were losing everything - cows, calves, you name it."
Little federal aid was available to South Dakota ranchers because Washington was still wrestling with the five-year authorization of numerous federal programs better known as the farm bill.
The Senate approved its version of bill earlier in May, eliminating direct payments to farmers and cutting $4 the program formerly known as Food Stamps.
House speaker: “The yeas are 195, the nays are 234. The bill is not passed.”
But the House of Representatives had different ideas --- and lawmakers rejected an amendment-riddled version in June. A month later, two new bills passed the House, one for commodities and a separate measure for entitlements.
House reductions in spending on the Supplemental Nutrition Assistance Program, or SNAP, amounted to $40 billion – 10 times the cuts approved by the Senate.
Sen. Debbie Stabenow: “There are 16m men and women whose jobs rely on the strength of agriculture.”
A bipartisan conference committee convened in October hoping to make concessions between the two versions of the farm bill, but compromise has proven to be elusive.
Sen. Ted Cruz: “Do you like green eggs and ham?”
The true cost of political gridlock, however, was evident earlier in October when lawmakers played a high-stakes game of brinksmanship that nearly forced the U.S. to default on its sovereign debt.
The problem began when House Republicans tried to use fiscal deadlines to derail the Obama Administration’s three-year-old health care law. Hundreds of national parks and other federally operated agencies and facilities were shuttered. Some government publications -- including key USDA reports that can move markets -- were delayed and even cancelled during the 16 day shutdown.
But work continued in America’s booming oil fields. In fact, the U.S. produced more crude in October than it imported for the first time in nearly two decades, and the trend is expected to continue.
The Energy Department says U.S. crude oil could rise by 800,000 barrels per day through 2016 reaching 9.5 million barrels per day -- just 1 percent below the all-time high set in 1970. The government expects gasoline prices to fall over the same period to just over $3 per gallon.
The boom in domestic oil production, however, is not without opposition. Critics say advanced drilling techniques like hydraulic fracturing, or fracking, pose significant threats to the environment.
Opponents also voiced their dismay with some forms of renewable energy in 2013. So much so, that the Obama Administration proposed reducing the Renewable Fuels Standard to 13.1 billion gallons.
Since the biggest cuts are targeted for ethanol, some analysts expected corn prices to take a major hit.
Prices were already down nearly 50 percent from record highs recorded in 2012 during the worst drought in 50 years. But corn futures prices remained above $4 per bushel despite proposed reductions in the RFS and the harvest this year of what’s expected to be a record corn crop in the neighborhood of 14 billion bushels.
Nevertheless, plans to roll back the RFS drew impassioned responses from supporters of the biofuel industry. And in early December, virtually every player in the debate pleaded its case to the EPA.
Bob Greco: American Petroleum Institute:”API is encouraged that, for the first time, EPA has acknowledged that the blend wall is a dangerous reality that must be addressed to avoid negative impacts on America’s fuel supply and to prevent harm to American consumers.”
Bob Dinneen, Renewable Fuels Association: “The RFS was designed to drive investment in new technologies, to drive innovation, to drive new market opportunities. It was not designed to be convenient for the oil companies.”
With year rapidly drawing to a close, lawmakers scurried to wrap up business in Washington last week before heading home for the holidays. But a lengthy “to-do list” awaits their return in January.
The unfinished business includes a languishing farm bill; tax and immigration reforms; and raising the debt ceiling before Uncle Sam maxes out his credit card – again -- in February.
With half of the session already in the books, the 113th Congress is on pace to be the least productive in history and with a recent Gallup poll revealing an approval rating of just 9 percent, it’s also the least popular. So it seems likely that Washington’s case of “electile disfunction” will continue in 2014. For Market to Market, I’m Paul Yeager.