FarmPolicy

September 23, 2019

Climate Issues; Farm Bill; Sec. Vilsack’s Staff; and Biofuels

Climate Issues: Agricultural Concerns

Eric Roper reported on Friday at the Hot Dish Politics Blog (The Minneapolis Star Tribune) that, “Blue Dog Democrat Collin Peterson, who played a major role securing rural lawmakers’ support for cap-and-trade legislation this summer, said today he would vote ‘no’ if a similar bill returned to the House for final passage.

“The Agriculture Committee chairman said he was ‘stuck voting’ for the bill (which is now awaiting Senate action) in June because House Speaker Nancy Pelosi granted his requests for broad agriculture concessions, but won’t support it again if it remains unchanged.

“He made the comment during an appearance on a conservative talk radio show hosted by Scott Hennen in Fargo, N.D. [audio here].”

Friday’s update added that, “‘First of all, this isn’t going anyplace in the Senate,’ Peterson said. ‘But if it did and we ended up with a bill that was similar to what came out of the House and that was going to become law, I would vote no.’

Peterson’s possible defection could prove fatal to the bill — if it ever passes the Senate — since he is an influential voice among rural Democrats. It also may reflect how much heat he has taken from his relatively conservative district for supporting a controversial bill labeled a ‘national energy tax’ by Republicans.”

In addition, Peter Harriman, writing yesterday at the Argus Leader Online (South Dakota), reported that, “As the Senate takes up a controversial cap and trade proposal to limit greenhouse gases such as carbon dioxide, tax them and establish a market for trading emissions permits, agricultural interests worry that it could set up a regulatory approach to industry and farming with the potential to change each fundamentally.”

Mr. Harriman noted that, “[Stephanie Herseth Sandlin, D-S.D] thinks the cap and trade concepts are not sufficiently developed to gain enough support for passage this year.

“‘It will be very difficult for the Senate to pass cap and trade this year,’ she predicted.”

Climate Issues: EPA Endangerment Finding

Darren Samuelsohn of GreenWire reported on Friday at The New York Times Online that, “Senate climate legislation advocates are bracing for a floor battle this month over a Republican campaign that they fear could drag down efforts to pass a major global warming bill before the real legislative debate can start.

Republican Lisa Murkowski of Alaska has the green light to offer an amendment on the Senate floor as soon as Jan. 20 that is aimed at halting U.S. EPA regulations on climate change. Democratic leaders agreed late last month to let Murkowski have the roll call during debate over separate legislation to raise the federal debt ceiling.

“Murkowski spokesman Robert Dillon said yesterday that the senator is still mulling several different ideas for what her proposal will actually say, let alone if she will force a vote now or wait until later as other options ripen. Dillon also acknowledged that the chances of actually stopping EPA global warming rules are minimal, given large Democratic majorities on Capitol Hill and the need for President Obama’s signature.”

The GreenWire article explained that, “Floor debate over Murkowski’s amendment will come at a critical stage in the broader campaign to enact legislation limiting greenhouse gas emissions across most major sectors of the U.S. economy. Prospects for that bill are in flux amid growing doubt that there are 60 Senate votes to pass such a sweeping new environmental initiative at the same time lawmakers work on other controversial Obama administration priorities, all the while campaigning for midterm elections in November.

“‘The mood for another big government initiative after doing the TARP, the stimulus program and health care is just not there,’ said Mark Helmke, a senior aide to Foreign Relations Committee ranking member Richard Lugar (R-Ind.). ‘It’s not there among most Republicans. And it’s not there among as many as a dozen Democrats.’”

In a related development regarding EPA’s endangerment finding, Washington Post writer Juliet Eilperin reported on Friday at the Post Carbon Blog that, “Alaska GOP senator Lisa Murkowski has company.

Rep. Earl Pomeroy (D-N.D.) introduced the ‘Save Our Energy Jobs Act’ Friday, a measure that bars the Environmental Protection Agency from regulating greenhouse gases, something it was authorized to do under a 2007 Supreme Court ruling.

“‘Regulation of greenhouse gas emissions under the current provisions of the Clean Air Act is irresponsible and just plain wrong. That is why I introduced the Save Our Energy Jobs Act which would stop the EPA from moving forward with its proposal,’ Pomeroy said. ‘I am not about to let some Washington bureaucrat dictate new public policy that will raise our electricity rates and put at risk the thousands of coal-related jobs in our state.’”

Ben Geman, writing on Friday at The Hill’s Energy and Environment Blog, pointed out that, “Pomeroy, who is in his ninth term, introduced the bill in mid-December but touted the measure in a Friday press release.

“It comes at an unsettled time politically in the conservative state following Sen. Byron Dorgan’s (D-N.D.) surprise announcement Tuesday that he will not seek reelection this year.

The nonpartisan Cook Political Report lists Pomeroy’s at-large House as likely to remain Democratic. But Dorgan’s retirement and the possibility that popular GOP Governor John Hoeven will run for Dorgan’s seat could boost Republican turnout in the midterm election.”

Meanwhile, Stephen Power and Ian Talley reported in today’s Wall Street Journal that, “A growing number of state regulators are urging the Obama administration to slow the rollout of proposed federal rules curbing industrial greenhouse-gas emissions, saying the administration’s approach could overwhelm them with paperwork, delay construction projects and undercut their own efforts to fight climate change.”

The Journal writers noted that, “Regulators from around the U.S., including Kansas, Pennsylvania, Florida and California, are calling on the EPA to go slowly with its new rules, and in some cases warning that they lack funding to regulate some of the new emissions sources that would be covered.”

Today’s Journal article also pointed out that, “A central issue is an EPA proposal slated to take effect as early as the spring to require facilities emitting at least 25,000 tons of greenhouse gases a year to obtain construction and operating permits. The EPA relies on states and local agencies to administer air-quality permits, and has said its proposed emissions threshold is high enough that it will effectively exempt small businesses, such as farms and restaurants.

“In comments filed with the EPA last month, the Office of Advocacy at the U.S. Small Business Administration said the EPA’s proposed rules ‘are likely to have a significant economic impact on a large number of small entities.’

Business groups, meanwhile, have questioned the EPA’s legal authority to pick and choose which facilities to regulate, citing federal statutes that set much lower emissions thresholds for requiring permits.”

Climate Issues: Domestic Economic Developments

Justin Lahart reported today at The Wall Street Journal Online that, “Employers cut another 85,000 jobs last month, dashing hopes of a turnaround in employment, even as the U.S. economy grows.”

“December’s dismal job figures, reported by the Labor Department Friday, demonstrate that companies remain skittish about hiring even as their outlooks improve. Economic figures released so far suggest that gross domestic product — the broadest measure of the value of goods and services produced by the economy — grew at a 5.4% rate in the last three months of 2009, according to Macroeconomic Advisers, a St. Louis forecasting firm.”

Peter S. Goodman reported in Saturday’s New York Times that, “Most economists assume the unemployment rate — which held steady at 10 percent in December — will worsen in coming months. The nation would then confront the highest jobless rate in a generation on the eve of November elections that will determine the balance of power in Congress.”

Jonathan Weisman reported in Saturday’s Wall Street Journal that, “For Democrats in a midterm-election year, the latest jobs report is more bad news. Democratic lawmakers have been clamoring for the White House to embark on a more sustained, job-creation campaign.”

Jeffrey Ball, writing in today’s Wall Street Journal, provided an interesting look at how the domestic economic picture could influence the climate debate: “If the public has to choose between creating jobs and spending billions to scrub invisible heat-trapping gases from the sky, jobs will win. That’s why the campaign to combat climate change is morphing, at least politically, into an economic-development drive with an environmental twist.

Mr. Ball stated that, “So what’s the alternative? A grab bag of more granular steps, each sold as creating ‘green jobs.’ One example: $2.3 billion in federal clean-energy manufacturing tax credits, whose recipients President Barack Obama announced Friday.”

Meanwhile, Neil Irwin, Annie Gowen and Ben Pershing reported in Saturday’s Washington Post that, “Senate Democrats, meanwhile, have begun crafting a bill to encourage job creation, which Democratic aides said will likely focus on small business, infrastructure spending and ‘green’ energy. The House passed a $154 billion jobs bill in December.”

Along these lines, recall that last week DTN Ag Policy Editor Chris Clayton reported that, “Agriculture policy should focus on job creation in 2010, the chairman of the Senate Agriculture Committee explained to DTN in a December interview.”

Mr. Clayton noted that, “One key area to watch in the Senate early this year is just how much emphasis Senate leaders will place on passing a climate or energy bill. Lincoln said she thinks there is support in the Senate for a bill that adopts a national renewable energy portfolio that would more quickly spur job growth.”

In a focus on executive branch perspective on jobs and climate change, Reuters writer Richard Cowan reported on Friday that, “President Barack Obama’s State of the Union speech to Congress could indicate how badly he wants a global warming bill, which opponents say will cost U.S. jobs and raise prices — a scary prospect for politicians trying to ride out a horrible economy in an election year.”

The Reuters article stated that, “Administration officials insist it can be done despite the political difficulties in an election year. ‘President Obama and this administration … expect that a comprehensive energy bill, which includes a climate portion, to be passed this year,’ Energy Secretary Steven Chu told reporters Wednesday.

For that to happen, Obama must put a ‘job-creation focus’ on the bill to build a U.S. economy that would run more on alternative energy than dirty-burning coal and oil, said Daniel Weiss of the Center for American Progress.”

And Ben Geman reported at The Hill’s Energy and Environment Blog on Friday that, “A senior administration official on Friday reiterated that the White House wants Congress to approve combined climate change and energy legislation.

The official’s comment comes as some lawmakers are calling for the Senate to pass energy-only legislation – focused on areas like energy efficiency and financing for low-emissions projects – while shelving action on legislation to impose mandatory emissions curbs.

“But the official told reporters today that the White House is still pushing for the broader measure, and is working with the three senators trying to assemble a bipartisan climate and energy bill – John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.).”

Farm Bill

The “Washington Insider” section of DTN reported on Friday (link requires subscription) that, “Senate Agriculture Committee Chairman Blanche Lincoln, D-Ark., said she may hold a few hearings before the end of the year to being preparations for the next farm bill, but there are other issues that are higher priority for her. During the first three months this year, Lincoln said she plans to focus on reauthorizing child nutrition funding ‘before the budget baseline comes out.’ Next on her to-do list, she said, is ‘making sure we deal with the derivatives portion of financing regulatory reform legislation.’

“Another item on Lincoln’s high priority list is helping farmers get direct financial aid to compensate for losses suffered last year due to adverse weather. ‘Farmers in the five states of Oklahoma, Texas, Arkansas, Mississippi and Louisiana were hit by weather impacts in the spring and the fall,’ she said. ‘Ag bankers are tightening credit requirements and more farmers will have a hard time getting loans. That’s what direct aid is needed for production agriculture.’”

Sec. Vilsack’s Staff

Philip Brasher reported yesterday at The Des Moines Register Online that, “In one weekend, Iowan John Norris goes from managing people and personalities to mastering complex regulations that influence how Americans light and heat their homes and businesses and how much that costs.

“Norris, a native of Red Oak and graduate of Simpson College and the University of Iowa Law School, wrapped up his last day Friday as chief of staff to Agriculture Secretary Tom Vilsack. On Monday, Norris will be sworn in as the newest member of the Federal Energy Regulatory Commission.”

And McClatchy Newspaper writer Michael Doyle reported on Friday that, “Agriculture Secretary Tom Vilsack has given Karen Ross a daunting job, and California farmers a bigger voice, by selecting the former Sacramento-area resident as his new chief of staff.

“The longtime head of the California Association of Winegrape Growers, Ross now helps run a sprawling federal agency of more than 100,000 employees. It’s backbreaking and politically delicate work, but it’s also a boon for the Californians who contend they need one of their own in a top Agriculture Department job.

“‘She’s going to be in the room when a lot of these big decisions get made, and that’s just really key,’ Zachary Coile, spokesman for Democratic Sen. Barbara Boxer, said Friday.”

Biofuels

Juliet Eilperin reported in yesterday’s Washington Post that, “In a matter of months, the Biomass Crop Assistance Program — a small provision tucked into the 2008 farm bill — has mushroomed into a half-a-billion dollar subsidy that is funneling taxpayer dollars to sawmills and lumber wholesalers, encouraging them to sell their waste to be converted into high-tech biofuels. In doing so, it is shutting off the supply of cheap timber byproducts to the nation’s composite wood manufacturers, who make panels for home entertainment centers and kitchen cabinets.

While it remains unclear whether Congress or the Obama administration will push to revamp the program, even some businesses that should benefit from the subsidy are beginning to question its value.”

The article noted that, “A range of renewable materials can be converted into energy sources: Wood pellets, rice hulls and fiber from sugar cane can produce electricity; algae and corn cobs can be converted into liquid fuel. The federal government is actively working to support the growth of as many of these biomass crops as possible, in part to meet requirements under the 2007 energy bill: The country must produce 5.5 billion gallons of advanced biofuels annually in five years, and 21 billion gallons by 2022. Right now, almost no U.S. land is devoted to raising biomass crops; according to congressional estimates, by 2022 the country will need between 22.2 and 55.5 million acres for this purpose.”

The future of the biomass program — which will eventually include a subsidy to get farmers to grow crops such as switchgrass and an array of trees and shrubs — could be determined by the Office of Management and Budget, which has been reviewing the federal rule for the program since September. In the meantime, federal money has started to flow: The administration sent $23 million to the state offices of the Farm Service Agency in the fall, and is poised to distribute another $514 million,” the article said.

The Post article indicated that, “The Agriculture Department, for its part, says it has no choice but to implement the subsidy the way Congress envisioned it under the 2008 farm bill. That legislation made no distinction between a waste product with little market value, such as corn husks, and the sawdust that sells for roughly $45 a dry ton.

“Farm Service Agency Administrator Jonathan Coppess said his agency is strictly adhering to the statute’s language and intentions. ‘We understand that policymaking, legislation and rule making are perfecting processes, not perfect processes, and we look forward to providing the best regulation possible to implement an important program with significant potential to benefit our national energy and agricultural economies,’ Coppess said in a statement.

“But at least one key senator, Tom Harkin (D-Iowa) — who helped author the 2008 farm bill as Agriculture Committee chairman at the time– now questions whether the program has gone awry.

“‘My bottom line is we have to examine those rules and make sure the payments incentivize the use of new, additional biomass for energy,’ Harkin said, ‘which is the objective Congress intends and wrote in the law.’”

Philip Brasher reported yesterday at The Des Moines Register Online that, “The biodiesel industry is sweating out an unplanned winter vacation.

Industry officials say plants that produce the fuel have slowed production or shut down after a $1-a-gallon tax subsidy expired Dec. 31.

“The industry also is waiting for a decision from the Environmental Protection Agency as to whether biodiesel made from soybean oil will qualify toward meeting new biofuel usage mandates.

“The uncertainty has come at a bad time for the industry. It has struggled because of the weak economy, which has depressed fuel demand, and the loss of an export market to Europe.”

Mr. Brasher added that, “The U.S. House last year approved legislation that included an extension of the credit, but the Senate never acted. The leaders of the Senate Finance Committee, Chairman Max Baucus, D-Mont., and Charles Grassley, R-Ia., released a letter shortly before Christmas promising to act on the biodiesel credit and other tax measures early this year.

Grassley said last week that it could take until February or March. The Senate returns to session on Jan. 19.

“While they wait for the Senate to act on the tax credit, producers also are anxiously awaiting the EPA’s new rules for the annual biofuels mandates that Congress enacted in 2007.”

Keith Good

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