FarmPolicy

December 16, 2017

Biofuels; Farm Bill; Climate Issues; Animal Agriculture; and USDA Issue

Biofuels

Reuters writer Tom Doggett reported yesterday that, “A pipeline carrying ethanol from the corn-producing heartland of the Midwest to big East Coast cities would not be feasible without government backing and a mandate requiring higher ethanol blends in gasoline.

“The U.S. Energy Department was required by Congress to assess the economic feasibility of building an ethanol pipeline, which is being pushed by the struggling industry.

The department’s assessment found the project would not be profitable without higher demand for the biofuel.”

The article explained that, “To make the $4.25 billion project work for its backers, the pipeline would need to ship 4.1 billion gallons a year of ethanol to the East Coast. But current demand is only 2.8 billion gallons a year for ethanol in those markets, so it would still be cheaper to ship by railroad, truck or barge.

“The industry is asking the Environmental Protection Agency to boost the ethanol blend rate in gasoline to up to 15 percent from 10 percent now.

“The report said government incentives, such as loan guarantees, would also still be needed to get the pipeline project off the ground.”

Philip Brasher reported yesterday at The Green Fields Blog (Des Moines Register) that, “A spokesman for ethanol giant Poet LLC, which has been developing a pipeline plan with Magellan Midstream Partners, says their project at $3.55 billion would cost significantly less than the Energy Department’s estimate and would be economically viable at current demand but does need a federal loan guarantee. The two companies put out a joint statement saying that the study supports the idea that ‘a large scale pipeline project is feasible under certain conditions and that a federal loan guarantee is necessary to move forward.’”

Mr. Brasher added that, “Critics, including the Environmental Working Group, have argued that it doesn’t make sense to build the pipeline when much of the projected next-generation biofuel production will be in other areas of the country. Another concern of some is that funding specialized ethanol infrastructure discourages investment in biofuels that can be used in the existing pipelines, service stations and vehicles.

“Rep. Leonard Boswell, an Iowa Democrat who is sponsoring legislation to allow ethanol pipelines to qualify for federal loan guarantees, says such a project ‘would create a greater demand and bolster the renewable fuel industry in Iowa. A renewable fuel pipeline not only creates jobs, but it helps our rural communities thrive.’”

Iowa Democratic Senator Tom Harkin noted yesterday that, “We need to continue the steady expansion of clean, domestic biofuels, as required by the Renewable Fuels Standard. Biofuels are one of our best weapons for reducing our dangerous dependence on oil – a goal that we all share. By providing federal loan guarantees for biofuels’ pipelines, we can attract private investment in large infrastructure development projects, create good-paying jobs and further move our nation towards energy independence and security, and all with minimal taxpayer investment.”

Meanwhile, in a separate biofuel issue, Ben Geman reported yesterday at The Hill’s Energy Blog that, “A quartet of ethanol and farming trade groups are pressing for long-term preservation of expiring ethanol tax credits they call vital to the industry’s viability, a move that comes amid signs that a House panel may trim the incentive.

“Groups including the American Farm Bureau Federation and the Renewable Fuels Association sent a letter Monday to sponsors of bills that provide a five-year extension of the credits, warning of dire consequences if they lapse at year’s end.

“‘In the near term, failing to extend the Volumetric Ethanol Excise Tax Credit (VEETC), will result in the industry reducing its production volume by 38 percent. That is approximately 4 billion of the 10.75 billion gallons produced in 2009. This loss in ethanol production will result in the shedding of approximately 112,000 jobs in all sectors of the economy,’ states the letter from those two groups, as well as the National Corn Growers Association and the American Coalition for Ethanol.”

As the groups express concern over the ethanol related tax provisions, recall that Growth Energy “made the bold move Thursday of calling for the tax credits to be phased out completely in favor of spending the money on more flex-fuel cars and gasoline pumps that support ethanol.”

In a statement released yesterday, Growth Energy CEO Tom Buis indicated that, “Ethanol is not a ‘someday’ fuel – it is here today, and it is the only commercially-viable alternative we have to oil, two-thirds of which is imported. Domestic ethanol creates U.S. jobs, is cleaner than oil and can strengthen our national security. If Congress were to pass Growth Energy’s Fueling Freedom plan, we would be giving American taxpayers and motorists the power to choose something other than oil at the pump.”

Yesterday, Matt Hartwig the Director of Communications for the Renewable Fuels Association, appeared on the AgriTalk Radio program with Mike Adams to talk about recent biofuel policy developments.

To listen to this overview discussion on key topics from yesterday’s AgriTalk program, just click here (MP3- 4:50).

In other news regarding biofuels, Matthew L. Wald reported yesterday at the Green Blog (New York Times) that, “The federal government’s position on ethanol fuel is that it must contribute less to global warming than gasoline does, or why bother promoting it. Yet by some calculations, ethanol is worse because it encourages the destruction of forests to make way for new farmland, many assert. Burning trees releases carbon dioxide into the atmosphere; what is more, the trees are no longer there to absorb carbon dioxide.

Now, two professors at the University of Nebraska counter that gasoline is an even bigger source of heat-trapping gases than previously believed. While most attention focuses on the obvious sources of gasoline-related emissions — drilling wells, transporting oil, refining it into gasoline and finally burning it in a car engine — they argue that the military activity that goes into protecting and acquiring oil imports from the Middle East takes an emissions toll that doesn’t get factored into comparisons of gasoline and ethanol.”

Yesterday’s update added that, “In a paper to be published on Tuesday in Environment Magazine, Adam J. Liska, whose specialty is industrial ecology, and Richard K. Perrin, who focuses on agricultural economics, write that fuel burned in warplanes and ships — and the carbon dioxide released in manufacturing those planes and ships — should be counted in gasoline’s total.”

Both Growth Energy and the Renewable Fuels Association issued releases highlighting the paper yesterday.

Farm Bill Considerations

In other developments, Environment & Energy Daily writer Allison Winter reported yesterday that, “The Senate Agriculture Committee this week will assess potential changes to federal ethanol support and other rural energy programs as the panel begins to scope out possibilities for the next farm bill.

“The oversight hearing on the status and future of farm bill energy and rural development comes as the Obama administration and a major ethanol industry group both float significant changes to how the federal government supports biofuels and rural energy projects.

The committee will hear from the Agriculture Department’s head of rural development and the leader of the ethanol industry group that recently called for a shift in federal support. Representatives from forestry, rural electric cooperatives, the dairy industry and local government officials from Arkansas are also scheduled to testify.”

Ms. Winter noted that, “The broad hearing is meant to check in on the current status of energy and rural development programs and consider ideas for how the committee should deal with them in the next farm bill.

“Congress takes up the massive farm bill every five years, setting upward of $200 billion in mandatory spending for an array of farm programs, food aid and conservation projects. The next farm bill is due in 2012, and Senate Agriculture Chairman Blanche Lincoln (D- Ark.) kicked off her effort on the bill last month.”

In other Farm Bill news, four Subcommittees of the House Committee on Agriculture will be holding hearings today, tomorrow and Thursday in advance of the 2012 Farm Bill.

For an overview recap of House Farm Bill hearings to date, see this FarmPolicy.com summary page.

And DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The Agriculture Department is planning a general Conservation Reserve Program sign-up of about four million acres in mid-August.

“House Agriculture Committee Chairman Collin Peterson, D-Minn., said last week that USDA would start the four million acre sign-up on August 15. A USDA official confirmed that the USDA Farm Service Agency is almost ready for the sign-up, but hopes it will begin before August 15 and will be slightly more than four million acres.”

Climate Issues

An update posted yesterday at CQPolitics reported that, “It’s a make-or-break week for environmental advocates and senators struggling to keep climate change provisions in the mix during a pre-recess energy debate.

“Senate Majority Leader Harry Reid is sticking with his plan to start debate on an energy bill July 26, a deadline that means he must quickly produce legislation — and that increases pressure on supporters of adding carbon dioxide controls to the measure.”

The CQ item added that, “Reid, D-Nev., said July 13 that the bill would address the Gulf of Mexico oil spill, ‘clean’ energy and job creation and will include a tax title and language on pollution from power plants. That last provision is widely seen as a limit on greenhouse gases, although Reid carefully avoided using the word ‘cap’ or other politically charged nomenclature that Republicans have tagged as ‘energy taxes.’

“The effort got a boost when all 12 freshman Democratic senators called for the inclusion of carbon pricing in the energy bill.

“While Reid’s words and the freshmen’s support have helped revive efforts to add climate provisions to the bill, it remains an uphill fight.”

Darren Samuelsohn reported yesterday at Politico that, “Sen. John Kerry led more closed-door talks on Monday with top electric utility and environmental officials in the search for a sweet spot on a bill capping greenhouse-gas emissions from power plants.

“Edison Electric Institute President Tom Kuhn, Environmental Defense Fund President Fred Krupp and David Hawkins, head of the Natural Resources Defense Council’s climate center, huddled for about an hour in the Massachusetts Democrat’s Senate office.

“All three declined comment as they left the meeting with Kerry, a lead author with Sen. Joe Lieberman (I-Conn.) of legislation that would set the first mandatory limit on carbon dioxide emissions from power plants.”

A news release issued yesterday by the National Farmers Union stated that, “National Farmers Union (NFU) President Roger Johnson addressed a meeting of the U.S. Department of Agriculture (USDA) and White House Council on Environmental Quality (CEQ) stakeholders in Denver, Colo., today.

In keeping with the theme of the meeting, ‘Helping Agriculture Adapt to a Changing Climate,’ Johnson highlighted specific impacts climate change can and will have on agriculture, as well as how USDA and CEQ can be involved in the solution.

“‘Impacts of climate change are already being felt in the agricultural community and we need to act soon on a comprehensive climate and energy policy that will minimize further impacts to production,’ said Johnson. ‘NFU seeks a policy that will benefit U.S. farmers and ranchers while protecting the environment.’”

Climate Issues: Agriculture

Dennis T. Avery noted in a commentary piece published at Feedstuffs Online that, “Stanford University recently startled the world with its conclusion that conventional, high-yield farming is far better for the planet than low-yield farming. This includes the developed world’s current icon: organic farming.

“We know that high-yield farms need less land to produce the same amount of food, protecting huge amounts of soil carbon that would be gassed off if we plowed more land for low-yield crops.

“However, the Stanford study said high-yield farming may have saved 600 billion tons of carbon dioxide emissions. That’s equal to one-third of the greenhouses gasses emitted from the whole Industrial Revolution since 1850!

“‘Our results dispel the notion that modern, intensive agriculture is inherently worse for the environment than a more ‘old-fashioned’ way of doing things,’ said Jennifer Burney, lead author of the Stanford study.”

The update also pointed out that, “Dr. Jude Capper of Cornell University reported last year that more milk from higher-yielding cows that are fed more grain and less grass have helped reduce the carbon footprint of the U.S. dairy industry by 43% since 1944.

“‘Interestingly, many of the characteristics of 1940s dairy production — including low milk yields, pasture-based management and no antibiotics, inorganic fertilizers or chemical pesticides — are similar to those of modern organic dairy systems,’ Capper noted.”

Animal Agriculture

In more specific news on the issue of antibiotic use in animal production, Sally Schuff reported yesterday at Feedstuffs Online that, “An in-depth House subcommittee hearing last week shed new light on the controversy surrounding antibiotic resistance and concerns about a potential link to the use of subtherapeutic antibiotics in food animal production.

It pitted scientists on both sides of the issue in a debate that unveiled the lengthy history and conflicting views of the science behind the hot topic.

“While the livestock industry has been dubious about the science linking antibiotic resistance to livestock production, several expert witnesses from the medical and public health fields concluded that a scientific link is ‘unequivocal’ based on studies in both the U.S. and Europe. The written testimony from those witnesses cited numerous peer-reviewed studies in lengthy bibliographies.”

Yesterday’s article noted that, “Centers for Disease Control & Prevention director Dr. Thomas Frieden sent a letter for the subcommittee’s record restating his testimony from the second hearing and discussing ‘the strong scientific evidence of a link between antibiotic use in food animals and antibiotic resistance in humans.’

“He said some of his discussion from the earlier hearing had been ‘mischaracterized.’ Indeed, it was widely reported that he had said he did not know of studies showing such a link.”

The article indicated that, “House Rules Committee chair Louise Slaughter (D., N.Y.) told reporters on a press call last week that she will continue to seek co-sponsors for PAMTA [Preservation of Antibiotics for Medical Treatment Act]. She said 113 Democrats have signed on, but no Republicans. When she nears the 218 needed for passage, she intends to discuss a vote on her bill with House Speaker Nancy Pelosi (D., Cal.), she said.

“Slaughter praised the House energy and commerce subcommittee for addressing the antibiotic issue, but when asked if she would merge her bill with legislation drafted in the subcommittee, she was cautious, saying, ‘I don’t want PAMTA to be watered down.’

Slaughter indicated that she would work for passage of the bill in a lame-duck session expected to be held after the November midterm elections, noting that Republican victories could stymie action.”

Monica Eng reported earlier this week at the Chicago Tribune Online that, “The Northwest Side hospital [Swedish Covenant Hospital] is one of 300 across the nation that have pledged to improve the quality and sustainability of the food they serve, not just for the health of their patients but, they say, the health of the environment and the U.S. population.

“For many of these institutions, the initiative includes buying antibiotic-free meats. Administrators say they hope increased demand for those products will reduce the use of antibiotics to treat cattle and other animals, which scientists believe helps pathogens become more resistant to drugs.”

USDA Issue

An update posted today at FoxNews.com reported that, “Days after the NAACP clashed with Tea Party members over allegations of racism, a video has surfaced showing an Agriculture Department official regaling an NAACP audience with a story about how she withheld help to a white farmer facing bankruptcy — video that now has forced the official to resign.”

The article added that, “The Agriculture Department announced Monday, shortly after FoxNews.com published its initial report on the video, that [Shirley Sherrod, the department’s Georgia director of Rural Development] had resigned.

“‘There is zero tolerance for discrimination at USDA, and I strongly condemn any act of discrimination against any person,’ Agriculture Secretary Tom Vilsack said in a written statement. ‘We have been working hard through the past 18 months to reverse the checkered civil rights history at the department and take the issue of fairness and equality very seriously.’

“The NAACP released a statement late Monday condemning Sherrod’s admission.”

Keith Good

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