Pubdate: Wed, 23 Dec 2015
Source: Seattle Times (WA)
Copyright: 2015 The Seattle Times Company
Author: Jennifer Oldham, Bloomberg News


Growing Market

Cannabis Industry Canceling Out Efforts for Low-Carbon Footprint

Pot's not green. The $3.5 billion U.S. cannabis market is emerging as 
one of the nation's most power-hungry industries, with the 24-hour 
demands of thousands of indoor growing sites taxing aging electricity 
grids and unraveling hard-earned gains in energy conservation.

Without design standards or efficient equipment, the facilities in 
the 23 states where marijuana is legal are responsible for 
greenhouse-gas emissions almost equal to those of every car, home and 
business in New Hampshire. While reams of regulations cover 
everything from tracking individual plants to package labeling to 
advertising, they lack requirements to reduce energy waste.

Some operations have blown out transformers, resulting in fires. 
Others rely on pollution belching diesel generators to avoid hooking 
into the grid. And demand could intensify in 2017 if advocates 
succeed in legalizing the drug for recreational use in several 
states, including California and Nevada. State regulators are 
grappling with how to address the growth, said Pennsylvania Public 
Utility Commissioner Pam Witmer.

"We are at the edge of this," Witmer said. "We are looking all across 
the country for examples and best practices."

The corporatization of what was once off-the-grid narco-agriculture 
is taxing electrical systems even as the nation prepares to comply 
with the Paris climate accord and the Environmental Protection Agency 
tries to reduce greenhouse gases from coal-fired power plants, which 
is considered the single largest domestic source of emissions that 
create global warming.

"Consumers seeking a green lifestyle are likely unaware that their 
cannabis use could cancel out their otherwise low-carbon footprint," 
Evan Mills, a senior scientist for California's Lawrence Berkeley 
National Laboratory, wrote in an email.

Indoor growing operations in 2012 racked up at least $6 billion a 
year in energy costs, compared with $1 billion for pharmaceutical 
companies, Mills found in a seminal study he did independent of the 
research institution. Some larger facilities today suck down as much 
as $1 million in power a month.

ArcView, an Oakland, Calif., research firm, estimates the retail and 
wholesale marijuana market will reach $4.4 billion in 2016.

Cultivation operations from California beach cities to Denver's 
warehouse district to District of Columbia closets are waiting months 
for new infrastructure to bring them power. Planners predict the 
escalating consumption could, in some regions, undo Americans' 
attempts to save energy by buying more efficient refrigerators, 
washers and hair dryers.

With the industry just coming out of the shadows, utilities are 
without data to forecast its electrical needs.

"We don't have aggregated energy audits from hundreds of grow 
operations that show us an energy footprint," said John Morris, 
director of policy and regulatory affairs at CLEAResult, an Austin, 
Texas-based consultancy that works with growers and utilities. "We 
have utilities in the Northwest putting in new transformer 
substations to meet the load. Producers are having to go out and 
build infrastructure."

In Colorado, more than 1,234 licensed grow facilities compose almost 
half of new demand for power. In 2014, two years after residents 
voted overwhelmingly to legalize the drug for recreational use, 
growing sites consumed as much power as 35,000 households.

In California, indoor production consumed 9 percent of household 
electricity in the nation's oldest legal medical pot market, the 
amount used in 1 million homes, Mills found. The analyst published 
that study before the industry exploded after the legalization in 
almost half the states and the District of Columbia. The report 
remains the best gauge of power use.

In a visit this month to a Denver warehouse, growers wore sunglasses 
as they checked on 150 top-heavy flowering plants. The 4foot-tall 
bushes were flourishing under dozens of 1,000-watt bulbs blazing 500 
times brighter than reading lights.

"All these things consume too much power," said Paul Isenbergh, a 
commercial real-estate broker and co-owner of the 3,100-square-foot 
medical-marijuana operation called Sense of Healing. He gestured at 
equipment surrounding varieties with names like Grape Crush. "The air 
conditioning, the lighting, the fans, the scrubber, the humidifier."

The atmosphere is calibrated to mimic outdoor conditions to allow 
growers to reap multiple harvests a year. In an unvirtuous cycle, the 
intense heat from the lights requires air conditioning and fans to 
keep grow rooms at 75 degrees, a dehumidifier to prevent mold and a 
carbon-dioxide injection system. The electric bill for all this: as 
much as $5,000 a month.

Electricity represents as much as half of an operator's overhead, yet 
profits far outweigh costs, with a pound of medical marijuana 
fetching about $2,500 on the wholesale market, Isenbergh said. His 
costs to raise the weed from clippings are only $600 a pound.

Pot operations like Isenbergh's join data centers and electric cars 
as among the top new users of electricity for the Northwest Power and 
Conservation Council. The planning agency, which covers legal 
marijuana markets in Washington and Oregon, as well as Idaho and 
western Montana, found indoor growing sites will consume as much as 
300 average megawatts by 2035, enough to power a small city.

Some cities, where growing operations are legal, have seen power 
consumption soar as communities nearby made gains in meeting 
conservation goals. The disparity prompted several municipalities to 
tax growers who strain the grid.

In Arcata, Calif., which is in the marijuana-growing hotbed of 
Humboldt County, officials are banking $300,000 a year from an 
"excessive energy use tax" that went into effect in October 2013. 
Voters approved the levy in 2012 after police and fire departments 
spent as much as 20 percent of their time responding to calls at 
growing operations.

The City Council placed the measure on the ballot after finding that 
10 percent, or 663, of Arcata's households were being used for 
large-scale marijuana cultivation, according to the Pacific Gas and 
Electric. Many were receiving subsidized rates based on low reported 
income, Mayor Michael Winkler said.

"Instead of having our electricity use going down, we had roughly a 
30 percent increase in electricity use in five years before the tax," 
Winkler said. "We were not meeting our sustainability goals as a 
result. Now we are."

The tax caused the number of large home-grow operations to fall 90 
percent, he said.

In Boulder County, Color., commissioners levied an energy-usage fee 
on such facilities after discovering that a 5,000-square-foot 
operation consumed 29,000 kilowatt-hours a month, about five times 
more than a typical commercial use, said Ron Flax, the county's 
sustainability examiner. Such operations send about 30,334 pounds of 
carbon dioxide per month to the atmosphere, county statistics show.

The fee will go, in part, to pay advisers to help growers become more 
efficient. It will go into full effect next year.

"Most of the power in our region is coming from the burning of coal, 
which has a powerful negative footprint," Flax said. "We were aware 
there would be an increase in the carbon footprint because of this 
industry. We are trying to get out before it."
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MAP posted-by: Jay Bergstrom