FarmPolicy

December 16, 2017

Climate Issues; Biofuels; Disaster Aid; Biofuels; Nutrition; Trade; and Farm Costs

Climate Issues

Sam Youngman reported yesterday at The Hill’s Energy Blog that, “Climate measures could be added in conference to an energy bill the Senate will take up this week, according to the White House.

“White House press secretary Robert Gibbs said he wouldn’t rule out adding some climate measures to the legislation in conference, assuming a scaled-down energy bill passes the Senate.”

The update indicated that, “The measure in the Senate drops the language from the House dealing with climate change and carbon emissions. By dropping those controversial measures, Democrats hope they can pass a bill through the Senate before lawmakers leave for the August recess.

“‘I don’t think the bill is essentially dead for the year,’ Gibbs said. ‘The House passed a very strong and very comprehensive energy bill last year. The Senate is going to take up a version that is more scaled down, but still has some important aspects, particularly dealing with how we deal with oil spills in the future.’

“He added: ‘I don’t think that closes the door. Once a bill passes each house, it doesn’t close the door to having some sort of conference.’”

In addition, Mr. Youngman stated that, “Gibbs said tackling expanded legislation in conference isn’t something that would have to wait for a lame-duck session.

“‘We could do it in September,’ he said.”

Meanwhile, a news release yesterday from Nebraska GOP Senator Mike Johanns stated that, “[Sen. Johanns] today introduced legislation that would prevent cap-and-trade from being added to a House-Senate Conference bill if previous action has not been taken in the Senate. This means that 67 Senators would have to vote to allow cap and trade to become law without having debated it in the Senate. Media reports indicate that some in the Majority are publicly contemplating trying to pass cap-and-trade by attaching it to a conference report during a lame duck session. This legislation would make such a move very difficult.

Sen. Johanns was a guest on yesterday’s AgriTalk Radio Program with Mike Adams and discussed the proposed legislation in greater detail, to listen to a portion of yesterday’s AgriTalk show with Sen. Johanns, just click here (MP3- 3:52).

Bloomberg writers Nicholas Johnston and Kate Andersen Brower reported yesterday that, “On energy, [President Barack Obama] said he will continue pressing for comprehensive legislation that also addresses climate change. In the face of Republican opposition, Senate Democrats are scaling back energy legislation to drop a cap-and-trade program to restrict carbon pollution and a requirement that utilities buy more electricity from renewable sources.

“[Senate Majority Leader Harry Reid (D-Nev.)] has said he will offer legislation to overhaul offshore drilling rules in response to the BP Plc oil spill, and establish household energy-efficiency programs and incentives for natural-gas-fueled vehicles.

Obama said that while that measure moves the nation’s energy policy in the right direction, ‘I want to emphasize that it’s only the first step.’”

To listen to the President’s comments on this issue from yesterday, just click here (MP3- 1:08).

In other climate news, Ben Geman reported yesterday at The Hill’s Energy Blog that, “Sen. Jay Rockefeller (D-W.Va.) said Tuesday he’s mulling whether to try and add his bill that blocks EPA climate change rules as an amendment to energy and oil spill legislation heading for the Senate floor.

“Rockefeller — a strong ally of his home state’s coal industry — hopes to freeze EPA rules limiting greenhouse gases from power plants and other stationary industrial sources for two years.”

And Siobhan Hughes and Stephen Power reported in today’s Wall Street Journal that, “A draft energy bill unveiled Tuesday would eliminate the cap on damage claims oil companies must pay for spills, and offer new federal subsidies for natural gas and electric vehicles. But the proposal by Senate Democrats faces an uphill fight.

“Major industry groups, including the major oil industry lobby, and some Republicans quickly denounced the measure outlined by Senate Majority Leader Harry Reid (D., Nev.)

“House Democrats have a separate package of energy proposals drafted in response to the Gulf disaster they say they will act on as early as this week. But with little time left on the legislative calendar before the November elections, it isn’t clear how soon Congressional leaders can reconcile differences between the two proposals and get legislation to President Barack Obama.”

On the issue of biofuels and climate legislation, a news release yesterday from POET stated that, “Today, Senate Majority Leader Harry Reid introduced an Energy Bill with the stated goal of lessening U.S. addiction to oil. POET CEO Jeff Broin made the following comments:

By omitting Growth Energy’s Fueling Freedom Plan from the Energy Bill, Senate leadership missed an opportunity to significantly lessen America’s dependence on foreign oil. Instead of spending taxpayer money on unproven technologies, policy-makers should invest in the infrastructure that would allow for the expansion of the only renewable energy source that is displacing significant volumes of foreign oil today: ethanol.”

Biofuels

An update yesterday from Growth Energy stated that, “A research paper from Bruce A. Babcock of Iowa State University that was funded by UNICA has generated a lot of attention lately, mostly because it suggests that allowing the tax credit and the tariff to lapse wouldn’t have much of an impact on the U.S. ethanol industry. Growth Energy has repeatedly pointed out that these government supports are important because ethanol only has access to a small portion of the transportation fuel market. With more market access, the government supports become less important.

“So who’s correct? It turns out that they both are. Babcock’s paper is based on the assumption that EPA allows intermediate blends in a way that substantially increases U.S. ethanol demand (p 22). Translated for the layperson: Babcock’s paper assumes that the EPA approves E15 and it results in the use of a lot more ethanol. This is evident in the various scenarios the paper presents, the majority of which show U.S. ethanol production at 15 billion gallons. Without E15 (or a significant increase in FFVs and blender pumps), it is impossible to use 15 billion gallons of ethanol in the U.S. market.

That is the essential contribution of the paper: if the ethanol industry gets access to a bigger share of the market, the government supports aren’t as important. That’s essentially what we’ve said in the Fueling Freedom Plan. But our plan goes much further. Rather than just allowing ethanol to compete for a few billion extra gallons, Growth Energy proposed busting the market open and forcing all fuels to compete for the consumer’s dollar.”

Philip Brasher reported yesterday at The Green Fields Blog (The Des Moines Register) that, “Valero Energy Corp., the Texas-based oil refiner that has become a major ethanol producer, said today that ending the 45-cent-per-gallon subsidy for the corn-based biofuel wouldn’t reduce usage of the biofuel.

“‘You would not see blending down one barrel because of the credit being gone,’ said Gene Edwards, Valero’s executive vice president for corporate development and planning. Edwards made the remark during a question-and-answer call today as the company released its quarterly earnings.

“Edwards said the benefit of the 45-cent subsidy is going only to the refiners and other companies that blend the ethanol with gasoline and earn the tax credit. Because ethanol is trading for 30 cents per gallon less than gasoline and that the subsidy is ‘almost irrelevant,’ he said. That could change in the future, he said, if ‘things change and ethanol tightens up.’”

Meanwhile, on Monday, Iowa GOP Senator Charles Grassley delivered a speech on the Senate floor in support of ethanol, to listen to Sen. Grassley’s comments on corn-based ethanol, just click here (MP3- 21:21)

Disaster Aid

CQ Politics reported yesterday that, “Senate Democrats struggling to advance a small business lending and tax bill may try to attach a long-stalled package of agricultural disaster assistance to the measure.

“Senate Majority Leader Harry Reid, D-Nev., likely will seek a vote this week to advance a new version of the small business bill that wraps in both the agricultural aid sought by Senate Agriculture Committee Chairwoman Blanche Lincoln, D-Ark., and a $30 billion lending fund for small businesses that survived a crucial test vote July 22.”

Likewise, an update posted yesterday at the National Cotton Council Online stated that, “Senate Agriculture Committee Chairman Blanche Lincoln (D-AR) has successfully identified a new legislative vehicle for a $2 billion ad hoc disaster aid package covering 2009 crop loses.

“The package has long been a provision in legislation to extend unemployment benefits (HR4213) but all the provisions except the extension of unemployment benefits were stripped from HR4213 prior to its passage and enactment last week. Chairman Lincoln has been seeking new alternatives and recent reports indicate that she has assurance from Senate Majority Leader Harry Reid (D-NV) that the disaster assistance package will be added to a small-business bill which could be debated by the Senate this week. However, the legislation faces several obstacles before it can be brought to a vote.”

The update added that, “‘We have secured assurance from the majority leader that the package will be included as part of the small-business bill,’ a Lincoln spokeswoman said Monday.”

Nutrition

A news release yesterday from Sen. Ag. Comm. Chairman Lincoln indicated that, “[Sen. Lincoln] today delivered…remarks on the Senate floor urging the Senate to pass the Healthy, Hunger-Free Kids Act of 2010 before programs expire on September 30. The bi-partisan legislation would make the most historic investment in child nutrition programs since their inception. The bill is completely paid for.”

The release includes Lincoln’s remarks on the Senate floor as prepared for delivery.

Sen. Lincoln was a guest last week on The Diane Rehm Radio Show and addressed issues associated with childhood hunger in the U.S., including the Healthy, Hunger-Free Kids Act of 2010, to listen to this discussion, just click here (MP3- 8:39).

Meanwhile, Duff Wilson reported yesterday at the New York Times Online that, “When the Robert Wood Johnson Foundation decided in 1991 to take on Joe Camel, it became the nation’s largest private funding source for fighting smoking. The foundation spent $700 million to help knock the cartoon character out of advertisements, finance research and advocacy for higher cigarette taxes and smoke-free air laws and, ultimately, to aid in reducing the nation’s smoking rate almost by half.

“But a few years ago, the Johnson foundation, based in Princeton, N.J., added another target to its mission, pledging to spend $500 million in five years to battle childhood obesity. As the antiobesity financing rose to $58 million last year, a new compilation from the foundation shows, the organization’s antismoking grants fell to $4 million [related graph].”

Trade

A news release yesterday from the World Trade Organization (WTO) noted that WTO Director General Pascal Lamy recently stated that, “Overall, what is clear from all these discussions is an overall desire to move the DDA negotiations to a balanced and ambitious conclusion as soon as possible, consistent with the mandate and based on progress already made. At the same time I believe it is healthy to note the reality that faces us — namely that gaps remain on the right level of ambition and on the right balance in the contributions by Members.”

After some months of impasse in the negotiations, my own sense is that we are beginning to see signs of a new dynamic emerging. This new dynamic is built on the discussions that some of you are having over different topics in different configurations. I believe these explorations are useful.”

And Reuters writer Doug Palmer reported yesterday that, “The largest U.S. farm group has urged the Obama administration to begin steps towards imposing sanctions on the European Union in a longrunning dispute over the EU’s treatment of genetically modified crops.

“The American Farm Bureau Federation, in comments given to the administration on Monday, complained the EU still has not complied with a 2006 World Trade Organization ruling against its ‘de facto’ moratorium on approving new varieties of biotech crops for sale in the 27-nation bloc.

“‘The inability of the EU to operate a timely and predictable regulatory process ended U.S. corn exports (to the EU) in 1998 and has reduced corn byproducts substantially,’ the Farm Bureau said in its recommendations for President Barack Obama’s National Export Initiative.”

Farm Costs

A research brief released this week by University of Illinois Agricultural Economist Gary Schnitkey (“Power Costs Increased on Grain Farms”) stated in part that, “Power costs on Illinois grain farms have increased over the last five years. In 2005, power costs averaged $68 per acre for grain farms located in northern and central Illinois who were enrolled in Illinois Farm Business Farm Management (FBFM). Power costs in 2009 averaged $94 per acre, an increase of $26 per acre over 2005 costs. The $26 per acre increase represents a 38% increase in costs over the five-year period.”

Keith Good

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