- FarmPolicy - http://farmpolicy.com -

Climate Change; Sec. Vilsack; and Peanuts

Energy and Commerce Comm. Markup of Waxman-Markey Climate Bill- Day Three

David Fahrenthold reported yesterday evening at The Washington Post Online that, “The House Energy and Commerce Committee has just reconvened for another long evening, having spent the day debating changes to mammoth climate-change legislation, still without reaching the bill’s halfway point.

“On its third day of debate on the bill, the committee had voted on 17 amendments by 6 p.m. They approved a provision to get annual reporting on China and India’s efforts to curb emissions, and set a national goal for increasing energy efficiency by 2012.”

The Post article added that, “Most importantly, the committee was still considering amendments to the second title of the bill. It has four titles in all, and the third — which sets up a complicated ‘cap and trade’ system for reducing national emissions — might be the most complicated.”

The Committee continues its markup of the Waxman-Markey climate change legislation today at 10:00 Eastern.

Reuters writer Tom Doggett reported yesterday that, “Democrats on the House Energy and Commerce Committee have enough votes to approve historic legislation to cap and reduce U.S. greenhouse gas emissions, according to a Reuters survey of specific lawmakers on the panel.”

Mr. Doggett explained that, “Of the 59 members on the House committee, Reuters found that 30 lawmakers, all of them Democrats, would definitely vote ‘yes’ or were likely to support the bill. The survey results were based on comments from the lawmakers themselves or from congressional staff on where their bosses stand on the bill.

There are 36 Democrats and 23 Republicans on the committee.”

As an interesting side note on climate change, Steven Mufson reported in today’s Washington Post that, “U.S. emissions of carbon dioxide related to energy use fell 2.8 percent last year, according to an estimate by the Energy Information Administration, driven down by high oil prices and the sagging economy. The drop in carbon dioxide emissions was the steepest since 1982.”

Waxman-Markey Bill- Interaction with Indirect Land Use and Biofuels

Of the amendments offered at yesterday’s markup, one in particular, which was submitted by Rep. Lee Terry (R-Neb.), held significant importance for agriculture and the biofuels sector.

The Terry Amendment sought to insert the following language regarding indirect land use into a specific section of the legislation: “International indirect land use changes shall not be taken into account in determining average lifecycle greenhouse gas emissions under this section.”

To listen to a passionate argument in support of the Terry Amd. from yesterday’s markup by Rep. John Shimkus (R-IL), just click here (MP3-5:00).

To listen to an argument against the Terry Amd. from yesterday’s markup by Edward Markey (D-Mass.), just click here (MP3-5:00).

After a brief discussion prior to the vote (MP3-5:00) , the Terry Amd. failed to pass on a vote of 36-20.

Indirect Land Use and Climate Change- Additional Background

Recall that the Environmental Protection Agency (EPA) announced a proposed rule on May 5 to limit emissions of climate-changing gases [complete details available here] from the manufacture of ethanol. The proposed EPA rule would “factor in changes in land use, so that if more American-grown corn were used for ethanol, and as a result a farmer anywhere cut down trees to raise crops, the loss of that forestland, and the resulting increase in carbon dioxide, would count in ethanol’s ‘carbon footprint.’” (Matthew L. Wald. “Rules To Limit Emissions in the Making of Ethanol.” The New York Times. May 6).

Although the EPA pledged to “to conduct ‘peer reviews’ of the science underlying indirect land-use analysis,” [Jim Tankersley. “New standards could cut tax breaks for corn-based ethanol.” Los Angeles Times. May 6] the EPA decision has nonetheless sparked controversy with farm state lawmakers and supporters of renewable energy.

In a House Agriculture Subcommittee hearing on May 6, House Agriculture Committee Chairman Collin Peterson (D-Minn.) spoke out harshly (MP3-3:13) against the EPA proposed rule and the indirect land use issue and expressed concern about the EPA proposal and its interaction with the Waxman-Markey climate change bill.

Subsequently on May 14, Chairman Peterson and Ranking Member Frank Lucas (R-Oklahoma), along with 42 other lawmakers, introduced a bill (The Renewable Fuel Standard Improvement Act (H.R. 2409)) that “reverses language added at the last minute without debate to the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140) that forces biofuels producers to meet an unfair standard for lifecycle greenhouse gas emissions and restricts the availability of new feedstocks for biofuels.” (House Ag Comm. News release. May 14).

On May 16, Dan Looker reported that, “Friday, the ag committee chairman, Representative Collin Peterson (D-MN), told Agriculture Online that he will work to defeat any climate change legislation on the floor of the House of Representatives until his ‘Renewable Fuel Standard Improvement Act,’ becomes law. And he has let the House leadership know how he feels.”

And on May 19, Reuters writer Charles Abbott reported that, “Democratic leaders in the U.S. House of Representatives must change existing biofuel rules if they want to pass a bill to regulate greenhouse gas emissions, the House Agriculture Committee chairman said on Tuesday.”

Meanwhile, an Op-Ed on this issue, which was written by Craig Cox, the Midwest vice president for the Environmental Working Group (EWG), was published in yesterday’s Minneapolis Star-Tribune.

In part, the opinion item noted, “One wonders what House Speaker Nancy Pelosi must be thinking of Peterson’s reckless proposal to hold one of her and the president’s most important priorities — climate-change legislation — hostage to the already well-served interests of the corn-ethanol industry. Particularly given the fact that Department of Energy data reveal that ethanol already pockets two-thirds of all federal support for renewable energy. As ever, the industry wants even more.

“The threat of climate change is real, and farmers are particularly vulnerable to the droughts, severe storms and other damaging effects of a warming climate. Climate change is threatening the soil and water resources on which agriculture and our environment depend.

Congress must ignore the special pleadings of the corn-ethanol industry and its champions on the Agriculture Committee and quickly pass a strong climate-change bill.”

Indirect Land Use and Climate Change- Current Developments

Jared Allen reported last night at The Hill Online that, “A committee chairman is threatening House leaders to either give him a role in shaping climate change legislation or risk losing every Democratic vote on his panel when the bill hits the floor.

Rep. Collin Peterson (Minn.), the outspoken Democratic chairman of the Agriculture panel, has been making it well-known that he wants his committee to have full jurisdictional authority over whatever climate change bill emerges from Chairman Henry Waxman’s (D-Calif.) Energy and Commerce Committee.

“But Peterson is no longer making idle threats.”

Mr. Allen explained that, “Peterson earlier this week met with the 26 Democrats on his panel and emerged with a ‘virtually unanimous’ agreement that his committee members would stand with him in opposition to a climate change bill that didn’t adequately address the concerns of the agriculture industry, according to one of those Democrats.

“‘We’ve thrown a pitchfork in the sand,’ the Democrat said.

Peterson wants a full markup to alter what he and other committee Democrats think are inadequate provisions on everything from fuel standards to renewable energy definitions to regulations governing the trading of carbon derivatives created through a cap-and-trade system, all of which have been written into the Energy and Commerce bill.”

The Hill article indicated that, “There is not a single Democrat who sits on both panels [Energy and Commerce, and Agriculture]. Further complicating the equation for party leaders is the fact that the Agriculture Committee is loaded with vulnerable and freshman Democrats — those members who most fear Republican attacks on what the GOP has labeled a ‘cap-and-tax’ bill.

Eleven freshmen sit on the Agriculture Committee, and seven of them are in competitive reelection races, according to The Cook Political Report, which handicaps House and Senate contests.

All of Cook’s three Democratic ‘toss-ups’ — Reps. Bobby Bright (Ala.), Walt Minnick (Idaho) and Frank Kratovil (Md.) — sit on the Agriculture Committee.

“Minnick said Wednesday that he was undecided on climate change.”

And DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., said Tuesday said he has a ‘long list’ of issues with the climate change/cap-and-trade bill now moving through the House Energy and Commerce Committee. He expects the bill to be sent to his committee in June, but Peterson said his issues with it must be addressed before he will consider backing the climate change legislation.

“Under House rules, the Energy and Commerce Committee has primary jurisdiction over the bill, which would cap carbon emissions and set up a system for companies that exceed the cap to buy the right to exceed from farms and other entities that sequester carbon in the soil or trees. But because the bill affects agriculture, it has to be referred to the agriculture committee.

Peterson said in an interview with DTN that at the top of his list is passage of a ‘renewable fuel standard improvement act’ he introduced last week. The legislation would repeal a provision in the 2007 energy bill that requires the EPA to consider how biofuel production affects land use in the United States and internationally when calculating the greenhouse gas emissions associated with advanced biofuels. Peterson said he is ‘not sure’ that inclusion of his bill in the cap and trade bill would be sufficient though because his provision could be removed from the final bill.”

Mr. Hagstrom added that, “A group of rural House Republicans headed by House Agriculture Committee ranking member Frank Lucas, R-Okla., and others said Tuesday [video available here] that they consider the cap and trade bill moving through the House Energy and Commerce Committee to be a ‘national energy tax’ that will hurt rural America.”

More specifically, Rep. Lucas indicated at Tuesday’s briefing (MP3-one minute) that, “The question I would put to you is this: The same group of people who wanted to reduce money going to crop insurance three times this year, who advocated reductions in direct payments by tweaking the definitions three times this year- the are the same people who are going to give us an advantage in Rural America? It would be the most inconsistent thing in the world if they actually helped.”

Yesterday, Frank Lucas (R-OK), Sam Graves (R-MO), and Doc Hastings (R-WA), Co-Chairs of the Rural America Solutions Group, released an open letter to the editors of community newspapers regarding the Waxman-Markey national energy tax bill’s negative impact on rural Americans.

In part, the letter stated that, “Agriculture is a bull’s-eye industry for the national energy tax because it is energy-intensive. Whether it’s fuel in the tractor, fertilizer for the crops, or delivery of food to the grocery store, agriculture uses a great deal of energy. On average, 65 percent of farmers’ operating costs are fuel, electricity, fertilizer, and chemicals so any increase in these costs will devastate their budgets.

“Experts predict that this national energy tax will spike energy prices between 15 and 125 percent – forcing local producers in your community to pay more for seed, equipment, machinery, steel, and other supplies.”

DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “The American Farm Bureau Federation actively opposes the climate-change legislation being debated in Congress, but the farm organization also is asking the House Agriculture Committee to become more aggressive in defending agriculture’s possible role in offsetting greenhouse-gas emissions.

“The Farm Bureau has asked staff from the House Agriculture Committee to become more engaged in the legislation and possible ramifications for farmers and livestock producers, said Rick Krause, senior director of congressional relations for the Farm Bureau.

“‘If the ag committee doesn’t step in and aggressively assert our interests into this thing we are going to become left out,’ Krause said. ‘We have actually called on them (the House Agriculture Committee) to really seize the moment with this and take a look at this and address the issues that we have.’”

Mr. Clayton went on to explain that, “House Agriculture Committee Chairman Collin Peterson, D-Minn., has repeatedly expressed reservations about the climate bill. Peterson also remains upset with how the EPA is factoring carbon emissions from renewable fuels such as ethanol. He will hold a hearing Thursday on his bill that would strip EPA of authority to calculate indirect land use when determining greenhouse-gas emissions for biofuels. Given Peterson’s position on renewable energy, there are questions regarding whether Energy and Commerce Committee Chairman Henry Waxman, D-Calif., and House leaders want to allow Peterson to play a role in the bill.

“EPA studies have shown agriculture contributes roughly 7 percent to the greenhouse gases emitted in the U.S., but has the potential to help offset or capture anywhere from 15 percent to 25 percent of carbon emissions. Still, the climate bill doesn’t spell out any specific authority for agricultural carbon offsets for forestry or farming practices, but it does give the Commodity Futures Trading Commission authority to regulate derivatives involving carbon markets.”

Lauren Etter reported in today’s Wall Street Journal that, “Agriculture, in the current legislation, is exempt from emission caps, a win for farmers and ranchers afraid they’d have to figure out how to regulate emissions from, among other things, their manure lagoons, tractors and their cows, which emit methane, a potent greenhouse gas.

Still, the farm lobby isn’t satisfied. Farmers say the overall costs of climate-change regulation will trickle down to the farm through higher costs of supplies, animals, equipment and other agricultural goods.”

Today’s Journal article added that, “As a result, farm groups wanted to see specific mechanisms that would let farmers earn revenue from the system. For example, they wanted to be able to earn credits for the carbon absorbed by their crops. Those credits could then be sold to others who need them to cover emissions. The current legislation doesn’t include any specific language on such agriculture offsets.

“The bill ‘utterly ignores the principles we have identified as critical to U.S. agriculture,’ Bob Stallman, president of the American Farm Bureau Federation, wrote in a letter to members of the House Energy and Commerce Committee.”

Sec. Vilsack

Lois Romano, writing in today’s Washington Post, provided a brief backgrounder on Agriculture Sec. Tom Vilsack. In part, today’s article stated that, “Agriculture Secretary Tom Vilsack wants to make one thing clear, and it’s that his agency is not all about farming all the time. Rather, the USDA touches on just about every critical issue affecting the United States and the globe — from immigration to obesity, from the swine flu to developing food safety in Afghanistan.

“‘We like to think of the USDA as an everyday, every-way department. It’s an opportunity for us to sort of emphasize that new brand,’ says Vilsack, Barack Obama’s onetime rival for the Democratic presidential nomination who now heads the Agriculture Department.” A full transcript of the Post interview with Sec. Vilsack is available here.

Peanuts

Recall that on Monday Sec. Vilsack traveled to Georgia to hold a rural community forum.

Don Koehler, the Executive Director of the Georgia Peanut Commission filed an update regarding Sec. Vilsack’s trip to Georgia at his blog on Tuesday.

In part, Mr. Koehler indicated that, “The room was packed and a lot of issues were surfaced. Three were peanut issues. The first was increasing government purchases of peanut butter brought up by Armond Morris who serves on an industry committee to enhance government purchases of peanut butter and peanuts. Secretary Vilsack encouraged farmers to contact their local school systems to get them to increase orders and that USDA would follow suit to supply all the orders. He said the system is driven at the local level.”

Recall that on May 7, a group of 14 organizations sent a letter to Sec. Vilsack, which stated in part that, “Prior to your testimony in the House Agricultural Appropriations Subcommittee in March of this year, you announced increased purchases of dry milk, turkey, pork, lamb and walnuts. We believe the peanut industry has faced an extremely trying quarter and would benefit greatly from additional government purchases. These purchases would not only increase product demand, but would also show government confidence in peanut products in the wake of the PCA salmonella problem.”

Keith Good