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Climate Legislation; Biofuels, Mexican Trade Issue- Update; Ag Concentration Issue; and the Farm Bill
Climate Legislation
Darren Samuelsohn reported on Friday at The New York Times Online (ClimateWire) that, “Two powerful Senate panels are at odds over which will be the lead author on perhaps the most critical piece of the global warming bill.
“Both the Environment and Public Works Committee and the Finance Committee are staking claim to the distribution of what is projected to be hundreds of billions of dollars in emission allowances for a range of industries, adding another layer of complexity to a legislative debate already rife with trap doors.
“For now, the leaders of the two committees are playing nice — at least publicly. They say they will work together on the legislation, and any disputes ultimately will get decided by Senate Majority Leader Harry Reid (D-Nev.).”
The article added that, “But sources on and off Capitol Hill say Reid wants nothing to do with a parliamentary struggle that pits EPW Chairwoman Barbara Boxer (D-Calif.) against Finance Chairman Max Baucus (D-Mont.), and he is pleading with them to resolve any differences should the legislation get the green light for a floor vote later this year.”
Siobhan Hughes also reported on this development on Friday at The Environmental Capital Blog (The Wall Street Journal), noting in part that, “Deciding just who gets how many emissions permits determines the overall economic impact of climate legislation, as the Energy Information Administration recently noted.
“It also promises to be the source of furious lobbying—from Big Coal, natural gas, power companies, oil refineries, and all the other energy players.”
Also with respect to the Senate, Alec MacGillis indicated in yesterday’s Washington Post that, “Climate change legislation, which passed in the House, also faces daunting odds [in the Senate]. Why? Because agriculture, coal and oil interests hold far more sway in the Senate. In the House, the big coal state of Wyoming has a single vote to New York’s 29 and California’s 53. In the Senate, each state has two. The two Dakotas (total population: 1.4 million) together have twice as much say in the Senate as does Florida (18.3 million) or Texas (24.3 million) or Illinois (12.9 million).”
Later, the Post article stated that, “Sen. Tom Harkin (D-Iowa) has declared that the cap-and-trade bill will require even more concessions to agriculture, while a group of rural Midwestern utilities that represents 4 percent of the nation’s customers is mobilizing to lobby their small-state senators. The bill passed the House by only seven votes; getting it through the Senate ‘is going to be the House vote in spades,’ said Eileen Claussen, president of the Pew Center on Global Climate Change.”
Meanwhile, Robin Bravender reported on Friday at The New York Times Online (ClimateWire) that, “U.S. EPA Administrator Lisa Jackson yesterday denied GOP requests to perform a new economic analysis of the House-passed climate and energy bill, saying the Energy Department has essentially answered any outstanding questions.
“Sens. James Inhofe (R-Okla.) and George Voinovich (R-Ohio) asked EPA last month to revise its study of the House bill, because it ‘offers an incomplete account of the bill’s major provisions, how they overlap, and how they impact consumers, households, and the economy.’”
Friday’s article explained that, “The EPA analysis (pdf) of the House bill found it would cost U.S. households $80 to $111 a year.
“Jackson yesterday said EPA won’t do a new study because a new analysis (pdf) of the bill from the Energy Information Administration — the statistical arm of the Energy Department — contains many of the attributes the senators requested, including scenarios where low-carbon energy sources prove to be very expensive.
“EPA is prepared to conduct an objective and thorough analysis of the climate and energy bill expected from EPW Chairwoman Barbara Boxer (D-Calif.) next month, Jackson wrote in her response (pdf), adding the senators should discuss the parameters of the analysis with the chairwoman.
“But Inhofe said that EIA’s analysis does not cover some of the key issues they raised in their letter, including the availability of international offsets and the effects of the bill on states like Ohio, which rely on manufacturing for jobs and coal for electricity.”
In a different perspective regarding climate legislation, John M. Broder reported in yesterday’s New York Times that, “The changing global climate will pose profound strategic challenges to the United States in coming decades, raising the prospect of military intervention to deal with the effects of violent storms, drought, mass migration and pandemics, military and intelligence analysts say.
“Such climate-induced crises could topple governments, feed terrorist movements or destabilize entire regions, say the analysts, experts at the Pentagon and intelligence agencies who for the first time are taking a serious look at the national security implications of climate change.
“Recent war games and intelligence studies conclude that over the next 20 to 30 years, vulnerable regions, particularly sub-Saharan Africa, the Middle East and South and Southeast Asia, will face the prospect of food shortages, water crises and catastrophic flooding driven by climate change that could demand an American humanitarian relief or military response.”
More specifically with respect to agricultural issues and climate legislation, DTN Editor-on-Chief Urban C. Lehner noted in his weekly column on Friday that, “For the bill, called Waxman-Markey after its sponsors, Democratic Congressmen Henry Waxman of California and Edward Markey of Massachusetts, puts USDA, not the EPA, in charge of most of the issues that matter to agriculture. Indeed, defeating the bill would likely give the EPA more sway over agriculture than passing it would.
“That’s because the alternative to Waxman-Markey is not the status quo; it’s EPA regulation of carbon emissions under the Clean Air Act. In 2007 the Supreme Court’s ruling in Massachusetts vs. Environmental Protection Agency gave the EPA authority to do this if the agency finds that carbon emissions endanger the environment. Earlier this year, the EPA proposed to make just such an endangerment finding.”
Mr. Lehner explained that, “One of the sharpest dividing lines is over the prospects of the EPA acting on its own. Waxman-Markey supporters argue that regulation is coming one way or the other, either from new legislation or EPA regulation under the Clean Air Act, so agriculture should concentrate on getting the best possible deal out of Congress.
“Waxman-Markey opponents have mostly ducked this issue in their public comments, but some of them think they can defeat Waxman-Markey and also get Congress to block EPA action. Indiana’s Republican senator, Richard Lugar, was quoted the other day as saying he could get a majority of senators to repeal the EPA’s authority to regulate carbon emissions.
“Good luck. Lugar is one of the Senate’s most respected members, but it’s hard to imagine the House going for Lugar’s repeal. True, Waxman-Markey only passed the House 219-212, but the margin could have been bigger. House Speaker Nancy Pelosi allowed some conservative Democrats to vote against the bill once victory was assured. She wouldn’t have much trouble defeating Lugar’s proposed overturning of the Supreme Court decision.”
“The initial studies of the economic impact of Waxman-Markey on agriculture have produced wildly varying estimates of energy costs. Now more studies are in the works. It would be nice if one of the groups conducting these studies were to examine the cost implications of the EPA moving forward on its own,” Mr. Lehner added.
Recall that Representative Jerry Moran (R-Kansas) has also expressed skepticism about the persuasiveness of passing climate legislation due to the threat of potential future action from the executive branch.
In an interview last month on the AgriTalk radio program with Mike Adams (July 8th), Rep. Moran elaborated on this issue and pointed out that, “[T]he EPA has not begun rule making process, it would take several years for that to occur. In the meantime, we may have a different Congress, ultimately, Administration thought may change, the science may be different, and so passing something to avoid something we fear in the future does not seem like the right course of action to me.”
To listen to Rep. Moran’s broader perspective on this issue, click on this audio clip (MP3-3:00) from the July 8 AgriTalk Radio program with Mike Adams.
In other opinion on climate legislation, The New York Times editorial board opined in today’s paper that, “Every two years, like clockwork, Congress seems to pass an energy bill, each one marginally better than the one before. What this country does not need in 2009 is another energy bill, even a better one. What it needs is a climate bill, one committed to reducing emissions of greenhouse gases in a way that engages the whole economy and forces major technological change.”
Biofuels
Reuters writer Charles Abbott reported on Friday that, “The U.S. Environmental Protection Agency did a reasonable job in estimating the U.S. biofuel industry’s role in causing greenhouse gas emissions overseas, but some of the work was problematic, a scientific review panel concluded on Friday.
“EPA ordered the independent review in May, when it proposed regulations for expansion of U.S. biofuel output. They would require biofuels to show an overall reduction in greenhouse gases, including land that may be converted to crops overseas.”
Mr. Abbott indicated that, “Growth Energy, an ethanol industry group, said the peer review showed EPA’s estimates were not reliable. It said Congress should eliminate indirect land use change from EPA regulations or order an Academy of Sciences study of the concept.
“Rep. Collin Peterson, Democrat of Minnesota, said the peer review proved EPA used ‘incomplete and unreliable models’ to link farming decisions overseas and U.S. biofuel output. Peterson, the House Agriculture Committee chairman, played a leading role in a House vote to require a five-year study of indirect land use change.”
DTN writer Todd Neeley reported on this issue in an article from Friday (link requires subscription) and noted in part that, “When contacted for comment, EPA spokesperson Cathy Milbourn referred DTN to the agency’s website fact sheets (http://www.epa.gov/…), and provided the following statement: ‘We are pleased that this independent peer review has affirmed EPA’s approach to be fair, credible and grounded in science. Posting these documents gives the public an opportunity to access the peer review record and participate in the scientific debate surrounding the RFS2 proposal.’
“The Renewable Fuels Association said in a statement that EPA has ‘stacked the deck’ against biofuels in the peer review.”
The DTN article added that, “The National Corn Growers Association also expressed disappointment in the EPA’s peer review panel.”
Senator John Thune (R-SD) also issued a news item relating to this development on Friday.
Mexican Trade Issue- Update
Recall that back in March, a FarmPolicy.com update (“Agricultural Tariffs and Mexico”) outlined trade developments regarding changes in U.S. policy on the issue of Mexican trucks coming into the States. As a result of that policy shift, Mexico retaliated by placing substantial tariffs on U.S. goods, including key agricultural products such as peanuts, potatoes, cherries, pears, wine, onions strawberries and juices.
Elizabeth Williamson and David Luhnow reported on Saturday at The Wall Street Journal Online that, “President Barack Obama will travel to Mexico on Sunday to attend his first summit with his Canadian and Mexican counterparts, in a meeting that the latter hope will shed light on how the U.S. plans to address trade disputes involving Mexican trucks and ‘Buy American’ provisions seen as favoring U.S. companies.”
After providing some background on the trucking dispute, the Journal article indicated that, “White House spokesman Robert Gibbs declined to discuss U.S. negotiations on the issue in advance of the summit. ‘We don’t expect to announce anything big coming out of this weekend,’ he said.
“Transportation Department spokesman Sasha Johnson said, ‘We continue to work to find a solution that addresses the concerns of Congress and is consistent with our international obligations.’”
Ginger Thompson and Marc Lacey reported in today’s New York Times that, “Mexico also raised a trade dispute that began when the United States Congress canceled a program, in violation of Nafta, that allowed Mexican trucks to operate in the United States.
“Mexico responded by imposing billions of dollars in tariffs on American products. The Obama administration said it was seeking to resolve the dispute, but did not have a deal ready in time for the meeting.”
And Cheryl W. Thompson reported in today’s Washington Post that, “Earlier this year, the U.S. Congress canceled a pilot program that allowed some Mexican truckers to operate in the United States. The free movement of trucks north and south of the border is a component of the North American Free Trade Agreement, and banning Mexican trucks from U.S. highways violates NAFTA.
“‘The president made clear his commitment to work with Congress to address discuss legitimate safety concerns and to work to fulfill our international obligations,’ a senior Obama administration official said. ‘I think there has been a clear understanding that this . . . was a priority issue and one that everyone would like to see resolved as quickly as possible.’”
In other trade news, Reuters writers Martin Roberts and Roberta Rampton reported late last week that, “European Union buyers have voluntarily moved to stop imports of U.S. soy after shipments were found containing traces of genetically modified corn, a spokesman for the EU in Washington said on Thursday.
“European trade sources said U.S. soybean meal shipments to Spain and Germany were found with traces of GMO corn, which is prohibited in the European Union.
“‘The industry has itself decided to stop all imports of U.S. soy, as of now,’ Mattias Sundholm told Reuters.”
The Reuters article explained that, “Sundholm could not confirm the quantity or location of the shipments, but said they were found to contain the corn varieties MON-88017 and MIR-604.
“Officials from the U.S. Agriculture Department and trade associations have not replied to requests for information.”
Ag Concentration
Scott Kilman reported on Saturday at The Wall Street Journal Online that, “The Obama administration will take an extensive look at concentration in U.S. agriculture as part of its increased emphasis on antitrust enforcement, a Justice Department official said Friday.
“Philip J. Weiser, a telecommunications-law expert who was recently named deputy assistant attorney general, told a farmer gathering here [St. Louis] that federal antitrust regulators are ‘committed to examining’ the level of competition in several agribusiness sectors, such as the marketing of genetically modified seed, dairy processing and meatpacking.”
Farm Bill
DTN Executive Editor Marcia Zarley Taylor reported on Friday that, “Over the life of the 2008 Farm Bill, the expected benefits of the Average Crop Revenue Election Program will outdistance the traditional farm safety net for Illinois corn, soybean and wheat producers, a new analysis by University of Illinois economists concluded. In fact, odds are about 60 percent or better that enrolling in ACRE in 2009 will more than offset any reduction in an average Illinois farm’s direct payments over the next four years.
“In a paper to be posted on their website Friday, University of Illinois economists Gary Schnitkey and Nick Paulson emphasized that those growers who stay with the traditional farm safety net of target prices and loan deficiency payments are not likely to trigger any farm program payments other than full direct payments now through 2012. On the other hand, ACRE payments could be sizable and more than justify the ‘entry fee’ for the alternative program — a 20 percent reduction in direct payments worth about $4 to $5 per acre. Growers have until August 14 to choose to enroll in the optional ACRE program for 2009 at local Farm Service Agency offices.”
Philip Brasher reported in yesterday’s Des Moines Register that, “Farm programs have long rewarded farmers for growing certain types of crops such as corn and soybeans. Congress wants to pay farmers according to how they farm, not just what they grow.
“The result is the new Conservation Stewardship Program, a revamped and better-funded version of the old Conservation Security Program. Farmers nationwide can start signing up for the new program, starting Monday.
“Both programs offered payments to farmers who undertake environmentally friendly practices, such as reducing tillage and planting cover crops to curb soil erosion and prevent farm chemicals from polluting rivers and streams.”
Keith Good
