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Climate Legislation; Farm Bill; Crop Insurance; Biofuels; Food Stamps; CFTC Issues; and EU Issues
Senate Climate Hearing, Day Two
DTN Ag Policy Editor Chris Clayton reported yesterday that, “Senators and industry groups argued over the impact a mandatory cap-and-trade market would have on energy costs and subsequent jobs and the economy in a second day of hearings on a potential climate and energy bill.
“The Senate Environment and Public Works Committee, chaired by Sen. Barbara Boxer, D-Calif., is attempting to draft and pass legislation to reduce greenhouse-gas emissions that would ideally marry up with international efforts to reduce carbon emissions. It’s unlikely, however, the full Senate will have a floor debate on a climate bill before a United Nations meeting on climate change in mid-December.
“The committee was slated for a marathon session with 27 witnesses Wednesday on topics ranging from jobs and economic opportunities, to national security and electric company concerns. Topics of particular interest to rural Americans ranged from the prospect of higher energy bills for members of rural electric cooperatives to possible new jobs in solar and wind energy.”
Mr. Clayton indicated that, “Bill Klesse, CEO, president and chairman of Valero Energy Corp., testified on behalf of the National Petrochemical and Refiners Association Wednesday. Not only is Valero a major oil refiner, but also one of the nation’s leading ethanol producers after buying ethanol plants via the VeraSun bankruptcy. Klesse testified that the Boxer-Kerry bill would be ‘devastating’ for the refinery business. He said carbon controls already threaten U.S. refinery capacity, potentially reducing production by 2 million barrels of domestic capacity.”
“Barry Hart, chief executive officer for the Association of Missouri Cooperatives, testified the cap-and-trade proposal would significantly raise utility rates for Missourians. While studies show modest overall consumer-rate increases, Hart said those are averages. Missouri power companies are heavily dependent on coal. Hart said Missourians would see rate hikes averaging between 25 percent and 42 percent by 2020 under the bill,” the DTN article said.
Reuters writer Timothy Gardner reported yesterday that, “Leaders at companies that develop low-carbon energy told a Senate panel that climate legislation would create millions of new jobs, but lawmakers from fossil-fuel dependent states said the bill would hit employment in the traditional energy economy.
“Climate change presents a global crisis, but ‘can also provide an economic opportunity of vast proportions,’ Dan Reicher, director of climate change initiatives at Google told the Senate Committee on Environment and Public Works.
“Besides creating new jobs in solar, wind and geothermal power, he said national regulation of greenhouse gases could help push investments to develop an efficient and robust power grid that would combine with information from the Internet.”
The Reuters article added that, “Still, Peter Brehm, a vice president for Infinia Corp, told the panel climate legislation could create solar industry manufacturing jobs to replace jobs lost in the auto industry. The solar power company’s supply chain consists of Midwestern auto supply companies retooled to work on renewable energy.
“And Ralph Izzo, chief executive of power utility Public Service Enterprise Group Inc, which has nuclear, coal and natural gas-burning plants, told reporters after testifying that the bill would create jobs.
“‘A price on carbon forces you to do things differently … and that creates opportunity,’ he said.”
Jim Snyder reported yesterday at The Hill Online that, “Domestic oil refiners on Wednesday kept up their attack against climate legislation, saying a Senate bill under consideration could increase gas prices and cost jobs.
“The group, among the fiercest critics of the measure, said the proposal could add 77 cents a gallon, or around 30 percent above today’s prices. It would also force plants to close, refiners said.
“Democrats on a key Senate panel shot back, saying the industry’s estimate is based on an inflated projection of the price of permits companies will have to hold to cover their carbon emissions. A cost containment mechanism will keep the price from approaching the industry’s estimate, supporters said.”
Meanwhile, Politico.com writer Lisa Lerer reminded readers yesterday that, “The [climate] bill will get input from five other committees, Finance, Energy and Natural Resources, Agriculture, Commerce and Foreign Relations. And Senate Majority Leader Harry Reid (D-Nev.) will compile the final bill after all six committees complete their work.
“Currently, there’s no timeline for the committees to complete their work.”
And John Stanton reported today at Roll Call Online that, “Senate Democrats are hopeful that despite their acrimonious past, Environment and Public Works Chairman Barbara Boxer (D-Calif.) and Finance Chairman Max Baucus (D-Mont.) can find middle ground on climate change legislation before electoral politics kills the issue for good next year.
“Boxer and Baucus will be at the center of the looming climate change debate. Environment and Public Works took up Boxer’s bill on Tuesday and is expected to mark it up in the next several weeks. Although Baucus has been focused on health care reform, he has a team of staff on the Finance Committee working to craft a bill in the next several months.
“Divisions between the two chairmen, both of whom have jurisdiction over the issue, are not new: Baucus was viewed as one of Boxer’s biggest obstacles to passing climate change legislation two years ago. Although he has long backed the use of a cap-and-trade program to combat global warming, Baucus in 2007 balked at Boxer’s legislation, preferring a more modest approach.”
Climate Legislation: Polls
Keith Johnson reported yesterday at the Environmental Capital Blog (The Wall Street Journal) that, “[T]he NBC/WSJ poll asked half its 1,000 respondents this: “Would you approve or disapprove of a proposal that would require companies to reduce greenhouse gases that cause global warming, even if it would mean higher utility bills for consumers to pay for the changes?”
“Some 48% approve; 43% disapprove; 9% aren’t sure. That’s a noteworthy drop from 53% approval and 40% disapproval in April.”
Mr. Johnson pointed to a CNN poll from earlier this week, and explained that this poll differed from the NBC/WSJ poll, “One huge difference between the NBC/WSJ poll and the CNN poll released Tuesday: The wording. Today’s poll explicitly mentions higher costs for consumers. The CNN poll, which showed 60% support for cap-and-trade legislation, only talked about companies paying penalties for their greenhouse-gas emissions.”
Climate Legislation: Executive Branch, International Momentum
Michael Burnham of Greenwire reported yesterday at The New York Times Online that, “Obama administration officials met with business executives at the White House today to rally support for climate and energy legislation in Congress.
“It was the third such meeting this month, and administration officials promise more to come as U.N. negotiators prepare to gather in Denmark to broker a successor to the Kyoto Protocol.
“‘We frequently get asked whether we will have this comprehensive energy legislation done by the time these negotiations on climate change happen in Copenhagen,’ White House climate and energy adviser Carol Browner told the more than 100 executives assembled this morning. ‘We’d like that to be the case; we’re working hard to make that the case.’”
Bloomberg writer Kim Chipman reported yesterday that, “The Obama administration is confident it will help forge progress at climate-treaty talks this year in Copenhagen, said Carol Browner, a White House adviser on energy and the environment.
“‘We feel very, very confident that we can work with the rest of the world to take significant steps forward in Copenhagen,’ Browner said in an interview.”
Reuters writer Alister Doyle reported yesterday that, “The world can still agree a robust U.N. climate deal in Copenhagen in December and will miss a unique opportunity by delaying talks into 2010, the senior U.N. climate official said on Wednesday.
“In the United States, a U.S. Senate committee continues hearings on a bill to cut U.S. greenhouse gas emissions. But hopes have faded that any U.S. laws will be in place before the 190-nation talks in Denmark on December 7-18.”
Also on the climate issue, The Wall Street Journal reported today that, “U.S. Special Envoy for Climate Change Todd Stern said he doesn’t expect bilateral agreements on global climate issues when U.S. President Barack Obama visits China next month.
“The U.S. and China will use the opportunity to look for common ground and try to facilitate agreements at the Copenhagen climate-change summit in December, he said.
“‘We are not trying to cut some separate deals,’ Mr. Stern told reporters. ‘We’ll try to get as much alliance as possible [between China and the U.S.] to get a deal in Copenhagen,’ he said.”
Also with respect to China, Reuters writer Lucy Hornby reported today that, “China and the United States kicked off an annual trade meeting on Thursday with both sides reiterating calls against protectionism, against a backdrop of friction over trade and the value of their currencies.
“The annual Joint Commission on Commerce and Trade meeting, held in a garden compound in the lakeside city of Hangzhou, comes just a few weeks before President Barack Obama’s first official trip to China.
“The meeting between Chinese vice premier Wang Qishan and the U.S. commerce secretary, trade representative and agriculture secretary is overshadowed by a number of trade disputes, including recent U.S. decisions to set duties on Chinese products that U.S. industry says are flooding U.S. markets.”
Farm Bill
Philip Brasher reported in yesterday’s Des Moines Register that, “Rick Hartmann’s organic vegetable farm did not produce a single bushel of corn or soybeans, which account for the bulk of the federal crop subsidies paid to farmers in Iowa and across the Midwest.
“In fact, he has never signed up for a single farm program – until now.
“Hartmann is one of more than 21,000 farmers and ranchers who have signed up this fall for the new Conservation Stewardship Program, which aims to reward producers for how they farm rather than what they produce.”
Mr. Brasher explained that, “Grain and cotton farmers have dominated traditional subsidy programs, but the Conservation Stewardship Program is available to producers in all 50 states no matter what kind of crop they grow, and farmers in every state except New Jersey wound up applying.
“Producers applied for payments on an estimated 32.9 million acres, far more than the 12.9 million acres the USDA can accept under the 2008 farm bill.
“The agriculture department doesn’t have a breakdown yet of the types of farms that make up the total, and officials are unsure of the exact acreages included in many contracts. The total includes at least 12 million acres of grazing lands and pasture and 1.9 million acres of forest.”
DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “Wildly fluctuating commodity prices have such negative consequences that keeping prices within certain ranges would be a better goal for trade negotiations than total free trade, National Farmers Union President Roger Johnson said Tuesday.
“At a Farm Foundation event on the future of agriculture in the next 30 years, Johnson noted that when food prices skyrocketed in 2008 governments around the world violated free-trade principles by imposing embargoes on exports.”
Mr. Hagstrom noted that, “Using the terminology of economists, Johnson said it would be better to move closer to a policy of ‘price bands’ under which prices fluctuate only between certain levels.
“Johnson, a former North Dakota agriculture commissioner, said he also believes in food reserves. Noting that former U.S. Trade Representative Clayton Yeutter, who also appeared on the Farm Foundation program, does not believe in food reserves, Johnson said that the current system of very low reserves resulted in the embargoes and riots last year.”
A news release issued yesterday by the House Agriculture Committee stated that, “Today, the House Agriculture Committee Subcommittee on Horticulture and Organic Agriculture held a hearing to review implementation of Title X of the Food, Conservation and Energy Act of 2008. Chairman Dennis Cardoza of California called today’s hearing to examine the implementation of Farm Bill provisions regarding specialty crops, organic agriculture, and plant pest and disease management.
“‘I appreciate the testimony provided today by representatives of the U.S. Department of Agriculture (USDA) regarding the specialty crop portion of the Farm Bill,’ said Chairman Cardoza. ‘It is clear that USDA has much more work to do to fully implement Congress’s direction in the Farm Bill, and I intend to hold additional hearings into these issues.’”
Crop Insurance
An update posted yesterday at USDA’s Risk Management Agency (RMA) Online stated that, “RMA today reminded producers of the Nov 20, 2009 sales closing date for crop insurance for perennials and horticultural products…[P]roducers should consult a crop insurance agent to discuss their insurance options.”
University of Illinois Agricultural Economist Gary Schnitkey penned an article entitled, “Late Planting Wheat and Crop Insurance,” which was posted yesterday at an extension webpage.
In part, Dr. Schnitkey stated that, “Wheat plantings have been delayed this fall, again bringing up decisions related to crop insurance. This article covers crop insurance implications for Actual Production History (APH), Crop Revenue Coverage (CRC), and Revenue Assurance (RA) policies. These farm-level policies have late planting and prevented planting provisions. Group Risk Plan (GRP) and Group Risk Income Plan (GRIP) policies do not have late or prevented planting provisions. Before GRP and GRIP policies provide coverage, wheat must be planted.”
Biofuels
The House Agriculture Subcommittee on Conservation, Credit, Energy, and Research will hold a hearing today “to review the future of next generation biofuels.” The Hearing begins at 10:00 am Eastern and can be viewed at this House Ag Committee webpage.
An update posted yesterday at The AgMag Blog (The Environmental Working Group) stated that, “Last week saw the launch of a new web property by a coalition of environmental and business groups who take a dim view of plans to raise the ethanol content of gasoline to 15%. The site, Follow the Science, marshals the overwhelming scientific evidence to deliver a focused message to the Obama Administration and Congress to not raise the corn ethanol blend limit by 50%. That evidence clearly points to corn ethanol’s adverse environmental effects, its potential to damage vast numbers of gasoline engines, and its problematic impact on the cost of food and feed.”
The Wall Street Journal editorial board opined today that, “Donning FDR’s cape, Eisenhower’s stripes and JFK’s boat shoes, President Obama observed in Florida on Tuesday that his ‘clean energy economy’ will require ‘mobilization’ on the order of fighting World War II, building the interstate highway system and going to the moon. Of course, the only ‘mobilization’ going on at the moment is on behalf of ethanol, whose many political dispensations the biofuels lobby is finding new ways to preserve even as the evidence of its destructiveness piles up.
“The latest embarrassment arrives via the peer-reviewed journal Science, not known for its right-wing inclinations. A new paper calls attention to what the authors (led by Princeton’s Tim Searchinger) call ‘a critical accounting error’ in the way carbon emissions from biofuels are measured in climate-change programs world-wide. Bernie Madoff had a few critical accounting errors too.”
Food Stamps
Ann Zimmerman reported yesterday at The Wall Street Journal Online that, “Costco Wholesale Corp., one of the country’s largest warehouse-club chains, said it will start accepting food stamps at its 420 stores nationwide, as the number of Americans receiving government assistance continues to soar.
“Under pressure from politicians, Costco began accepting food stamps at six New York City stores earlier this year and was surprised to discover that this led to a rise in memberships and sales. Other warehouse-club chains began accepting food stamps within the last year.”
And the AP reported yesterday that, “Some 36 million Americans are on food stamps, an increase of nearly 10 million over the past two years… Nearly 200,000 retailers participate, up 20 percent since 2005.”
CFTC Issues
Reuters writer Charles Abbott reported earlier this week that, “Position limits would guard against excessive concentration in the energy futures market, the chief U.S. futures regulator said in a speech to natural gas officials on Tuesday.
“Chairman Gary Gensler of the Commodity Futures Trading Commission said the financial crisis last fall showed the risk posed by ‘large concentrated actors on the financial stage.’
“‘I believe we should consider setting position limits to guard against excessive concentration in the energy futures market,’ said Gensler at a luncheon held by the Natural Gas Roundtable, a nonprofit organization.”
Mr. Abbott indicated that, “The CFTC is weighing whether to set position limits — a maximum market share — for oil and other energy products. The agency already sets limits on agricultural contracts.”
EU Issues
Roger Waite, the editor of AGRA FACTS, the Brussels-based newsletter on EU agriculture policy, has provided an update and analysis regarding the EU’s Common Agricultural Policy entitled, “Fischer Boel Not Staying On As EU Farm Commissioner.”
This updated analysis has been posted exclusively at FarmPolicy.com and is available here.
Keith Good
