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Climate Legislation; Biofuels; and Trade: China-Pork
Climate Legislation
The Senate Committee on Environment and Public Works concluded three days of hearings on the Clean Energy Jobs and American Power Act yesterday. Agricultural issues came into focus as American Farm Bureau President Bob Stallman testified yesterday morning before the Committee.
DTN Ag Policy Editor Chris Clayton reported yesterday (link requires subscription) that, “American farmers have an array of products to help hedge their risks against a crop failure, but American Farm Bureau President Bob Stallman questions the idea of climate-change legislation as basically a hedge against the possibility that scientists are right about the future effects of climate change.
“‘That’s fundamentally [what] the question we are talking about is — at what cost?’ Stallman said.
“As president of the American Farm Bureau Federation, Stallman was picked by Republicans on the Senate Environment and Public Works Committee to testify Thursday about the faults of the climate legislation being pushed by the committee chairman, Sen. Barbara Boxer, D-Calif.”
Mr. Clayton also noted that, “Stallman talked frequently with House Agriculture Committee Chairman Collin Peterson, D-Minn., about the House bill, but ultimately Farm Bureau opposed the full legislation. In the Senate, Stallman sees the organization taking a similar stance to help improve the way agriculture is treated, but ultimately is opposed to the scope of the legislation.
“Scientists and officials who believe climate change is caused by human industrial emissions make the claim that agriculture will be one of the most affected sectors because farming and livestock production are sensitive to weather changes. Stallman questions the logic.
“‘Before you ask that question, implicit is the assumption that all of that is going to happen,’ Stallman said.”
Yesterday’s DTN article pointed out that, “The American Farm Bureau Federation has no official scientific opinion on climate change, but acknowledges that the climate is warming. Regardless, Stallman said the organization has a lot of skepticism about the science and the process the United Nations Intergovernmental Panel on Climate Change used to come to its conclusions on climate change. Congress should at least hold hearings to consider the scientists and climatologists who disagree with the IPCC data and analysis, Stallman said.”
To listen to an exchange from yesterday’s hearing between Committee Ranking Member James Inhofe (R-Oklahoma) and Mr. Stallman on agricultural issues, just click on this FarmPolicy.com audio excerpt (MP3-2:31).
In a related article regarding the science of global warming, Jeffrey Ball reported in today’s Wall Street Journal that, “Two years ago, a United Nations scientific panel won the Nobel Peace Prize after concluding that global warming is ‘unequivocal’ and is ‘very likely’ caused by man.
“Then came a development unforeseen by the U.N.’s Intergovernmental Panel on Climate Change, or IPCC: Data suggested that Earth’s temperature was beginning to drop.
“That has reignited debate over what has become scientific consensus: that climate change is due not to nature, but to humans burning fossil fuels. Scientists who don’t believe in man-made global warming cite the cooling as evidence for their case. Those who do believe in man-made warming dismiss the cooling as a blip triggered by fleeting changes in ocean currents; they predict greenhouse gases will produce rising temperatures again soon.
“The reality is more complex. A few years of cooling doesn’t mean that people aren’t heating up the planet over the long term. But the cooling wasn’t predicted by all the computer models that underlie climate science. That has led to one point of agreement: The models are imperfect.”
Meanwhile, a news release issued yesterday by the National Farmers Union stated that, “National Farmers Union President Roger Johnson today said the organization is committed to see climate change legislation address the unique role America’s family farmers and ranchers can play when it comes to combating global climate change.
“‘We are committed to constructively working with members of the Senate to ensure the interests of agricultural producers are met as the debate moves forward,’ Johnson said.
“In testimony submitted to the Senate Committee on Environment and Public Works today, Johnson said while he is pleased to see the Senate begin to consider climate change legislation, the Clean Energy Jobs and American Power Act currently lacks the robust and flexible agriculture offset program necessary for America’s farmers and ranchers to be able to mitigate increased costs that will occur as a result of a cap and trade program.”
As this week’s hearings conclude, Lisa Lerer reported yesterday at Politico.com that, “Senate Environment and Public Works committee chairwoman Barbara Boxer (D-Ca.) said that she plans to mark-up her climate bill on Tuesday, moving forward despite Republican concerns about the pace of the legislation.
“‘There objections don’t pass the smell test,’ she said. ‘It seems to me they just want to delay this and delay it, so we don’t make progress on this crucial issue.’
“All the Republicans on the committee are expected to vote against the legislation.”
Yesterday’s article added that, “Nevertheless, Republicans have said that they would like more time to review the chairman’s mark up, and to see a Congressional Budget Office score for the bill and a more thorough analysis by the Environmental Protection Agency before a vote by the committee.”
Reuters writers Richard Cowan and Timothy Gardner reported yesterday that, “The U.S. Senate Environment and Public Works Committee will advance climate-change legislation quickly, aiming to pass a bill as early as next week, committee Chair Barbara Boxer said on Thursday.”
The article noted that, “Republicans, who largely oppose mandating curbs on the carbon emissions that are blamed for global warming, said they might thwart Boxer’s fast-track schedule by staying away from next week’s work sessions.
“A ‘boycott is on the table as an option,’ said Matt Dempsey, a spokesman for Republicans on the Senate Environment and Public Works Committee. ‘We’re certainly heading in that direction.’
“Under committee rules, at least two of the panel’s seven Republicans would have to attend for the work sessions to get under way, Dempsey said.”
Cowan and Gardner also noted that, “EPA head Lisa Jackson testified it could take ‘four to five weeks to run the full economic modeling’ on the bill. Republicans argue they need the detailed information to gauge the economic impact, although a preliminary analysis by the EPA found the Senate bill was similar to a House-passed bill, which the agency said would cost consumers about $80 to $111 a year.”
Edward Felker reported in today’s Washington Times that, “A decision is expected from committee Republicans on Friday. Mrs. Boxer, a California Democrat, told reporters she would ‘use every tool’ to get the bill voted out of the committee, where it is expected to pass easily with no more than two Democratic votes against it.
“‘We’re going forward, we’re going to do our job,’ she said.
“The exact timing of any drafting sessions depends on Mrs. Boxer, who must give Republicans at least three days notice before scheduling a committee meeting. No notice had been sent as of Thursday evening.”
Today’s Washington Times article added that, “She [Sen. Boxer] said her staff planned to work over the weekend to address the concerns of Democratic Sen. Max Baucus, Montana Democrat, who wants a less-stringent reduction in greenhouse gas emissions than is contained in the bill, as well as the elimination of regulation of greenhouse gases by the Environmental Protection Agency.”
In a related article regarding Sen. Baucus, Lisa Lerer reported yesterday at Politico.com that, “Senate Environment and Public Works Chairwoman Barbara Boxer can pass a climate bill out of her committee without Sen. Max Baucus, but losing the powerful moderate could set the stage for a blowout battle.
“The Montana Democrat threw a bomb into the committee hearing room Tuesday when he said he had ‘serious reservations’ about the Democrats’ climate change bill, a statement that immediately sparked fierce speculation that he would vote against the legislation.
“Scott Segal, a lobbyist for energy companies at Bracewell & Giuliani, said a ‘no’ vote from Baucus — one of two moderate Democrats on the committee — would be ‘a very uncomfortable signal to moderate Democrats in many regions of the country, particularly the West, the Midwest and the Southeast.’”
Amy Harder highlighted the position of another Democratic lawmaker yesterday at the National Journal’s Energy and Environment webpage, where she reported that, “Without a border tariff against countries that don’t cap their greenhouse gas emissions, U.S. climate change legislation can be only so successful, Sen. Sherrod Brown, D-Ohio, said today.
“Speaking with NationalJournal.com after addressing a manufacturing conference hosted by the left-leaning Institute for America’s Future and the Alliance for American Manufacturing, Brown dismissed criticism that a tariff provision would ignite a trade war. ‘I don’t want a tariff just to have a tariff,’ Brown maintained. ‘I want it there as a lever — a hammer, if you will — to get countries around the world to do the right thing on climate change.’
“Experts say Brown, a progressive hailing from an industrial Midwest state, is pivotal in the debate, despite the fact that he’s not on any committees likely to take up the Kerry-Boxer bill. (He is on the Senate Agriculture Committee but said it’s probably not going to mark up the bill.) He said his office is working with Environment and Public Works Chairwoman Barbara Boxer, D-Calif., and Foreign Relations Chairman John Kerry, D-Mass., to add ‘border equalization’ language to the bill. Right now, the bill has placeholder language for a border provision.”
From an international perspective, James Kanter reported yesterday at the Green Inc. Blog (The New York Times) that, “The head of the United Nations climate office said Wednesday that richer nations must pledge funds to poorer nations to make progress on a new agreement to curb global warming this year,” while the AP reported yesterday that, “The European Union fought Thursday to live up to its self-proclaimed leadership on combating climate change, with the 27 EU leaders at odds over how much to offer poorer nations to join the global battle.”
Biofuels
The House Ag Committee issued a news release yesterday, which stated that, “Today, Congressman Tim Holden of Pennsylvania, Chairman of the House Agriculture Committee’s Subcommittee on Conservation, Credit, Energy, and Research, held a hearing to review opportunities and challenges facing the development of next generation biofuels.
“Officials with the U.S. Department of Agriculture provided testimony about USDA research and financing activities for next generation biofuels. Witnesses representing companies and organizations focused on developing advanced biofuels also testified, updating the Subcommittee about the current and future direction of the industry.”
Written testimony provided by the witnesses at yesterday’s hearing can be viewed here.
Reuters writer Charles Abbott reported yesterday that, “U.S. lenders are leery of putting money into cellulosic ethanol and other new-generation biofuels due to the recession and an industry shakeout, Agriculture Department and biofuel leaders said on Thursday.
“That is one reason near-term production of advanced biofuels is unlikely to meet targets set by a 2007 energy law, said William Roe of Coskata Inc, which has a demonstration-size biomass plant in Pennsylvania.”
The article added that, “Rajiv Shah, Agriculture undersecretary for research, said he was optimistic of a significant improvement over the next five to seven years in the economics of new-generation biofuels. Feedstocks account for one-half to two-thirds of the cost of biofuels, he said, so it is important to develop biomass crops and improvements in converting crops into fuels.”
Philip Brasher noted yesterday at the Green Fields Blog (The Des Moines Register) that, “The chairman of the committee, Rep. Collin Peterson, D-Minn., said that criticism of corn ethanol and its impact on food supplies and greenhouse gas emissions is discouraging investment in next-generation fuels.
“‘It’s no damn wonder that nobody’s investing,’ Peterson said. ‘I wouldn’t put money in with all this that’s going on.’”
More details, including an audio clip, regarding Chairman Peterson’s comments were flushed out yesterday at the Corn Commentary Blog: “While praising the agriculture industry for meeting the demand for corn-based ethanol, Dr. Shah stated that ‘very importantly — increased corn acreage supported greater ethanol output.’
“Not so, said Chairman Peterson. ‘We’re virtually using the same corn acreage that we did way back in 1977,’ said Peterson. ‘The big difference is we had a 90.8 bushel average in 1977 and today we’re up to 164 bushels.’
“He said that the mistaken belief that we are increasing acreage is perpetuating criticism of ethanol and stifling investment in next generation biofuels. ‘All of this foolishness about international land use and what’s going on in Brazil and all this other negative stuff that’s being put out by different interest groups with different agendas … it’s no damn wonder that nobody’s investing,’ the chairman said bluntly.
“‘People who want cellulosic ethanol have got to realize that corn ethanol has created the opportunity for us to even do this.’
“‘That word is not getting out to the public,’ he continued. ‘All they here about is how terrible it is and how we’re going to starve everybody and all this other baloney that’s out there.’ Making statements that farmers are increasing acreage to meet ethanol demand, Peterson says, ‘does a disservice by ginning up all these bogus arguments that we’ve been hearing.’”
An audio clip from Chairman Peterson was also included at the Corn Commentary link.
A news release issued yesterday by Growth Energy stated in part that, “A key Congressional committee heard testimony today that helped cement ethanol’s role as the leading biofuel to reducing our nation’s dependence on carbon-heavy fossil fuels, like imported oil. Growth Energy CEO Tom Buis said he was looking forward to continuing the debate on ethanol’s contribution to the nation as a source of cleaner, domestically-produced transportation fuel.
“‘We heard it loud and clear from members of Congress today. Ethanol has a major role to play in breaking our nation’s dependence on imported oil. Ethanol can supply the clean, green transportation fuel we need today and tomorrow. But there are two things that must happen. We must raise the blend wall to E15, as we have asked EPA in Growth Energy’s Green Jobs Waiver. And Congress must repeal the ‘international indirect land use change’ scheme that erects new obstacles to biofuels production. Repealing ILUC protects the sovereignty of American farmers to make planting decisions on their own, and not based on what happens in Brazil or another country. We have a mountain of grain in the United States, which record corn yields. There is no reason why this surplus corn can’t be turned into ethanol,’ Buis said.”
Meanwhile, in prepared comments to be delivered on the Senate floor, Iowa GOP Senator Charles Grassley indicated yesterday that, “The new renewable fuels standard, enacted in 2007, requires various biofuels to meet specified life-cycle greenhouse gas emission reduction targets. The law specified that lifecycle greenhouse gas emissions are to include direct emissions and significant indirect emissions from indirect land use changes.
“However, the proposed rule relies on incomplete science and inaccurate assumptions to penalize U.S. biofuels for so-called indirect land use changes. Under the EPA’s analysis, ethanol produced from corn reduces greenhouse gas emissions by 16 percent compared to gasoline. However, if you remove the murky science of emissions from indirect land use changes, corn ethanol reduces greenhouse gas emissions by 61 percent compared to gasoline.”
And Reuters news reported yesterday that, “Profits for making U.S. ethanol have risen amid a drop in imports of the alternative motor fuel from Brazil, a Credit Suisse report said.
“Average cash margins for making ethanol rose to about 25 cents per gallon in October, up from about 15 cents in September, and about five cents in August, Credit Suisse said.
“Average distillers were losing money until July.”
Trade: China-Pork
James T. Areddy reported in today’s Wall Street Journal that, “The U.S. and China agreed to relax restrictions on agriculture, technology, travel and other trade restrictions ahead of President Barack Obama’s first visit to Beijing next month.
“The two sides made ‘solid progress’ that helps ‘both of our countries achieve balanced and sustainable growth,’ U.S. Trade Representative Ron Kirk said Thursday at the end of a meeting of the U.S.-China Joint Commission on Commerce and Trade, or JCCT.”
The Journal article added that, “Agriculture was a highlight, with agreements paving the way for the resumption of U.S. pork exports to China, which were halted in May on Chinese fears about H1N1 influenza, known as swine flu. U.S. pork exports to China had been growing quickly, reaching $560 million last year.
“In exchange, the U.S. agreed to ease a six-year-old restriction on Chinese poultry exports to the U.S. The lifting of the pork ban could result in, at best, a modest rise in sales, said industry participants. China has increased domestic production and likely won’t need to import U.S. pork.”
Carolyn Cui and Theopolis Waters, also writing in today’s Journal, reported that, “China’s pledge to lift a ban on U.S. pork drove prices of lean hogs to a three-month high on expectations of increased exports to the world’s largest pork consumer.
“The decision would end a five-month ban of U.S. pork imports to China, which imposed the restriction after the outbreak of the H1N1 influenza, initially known as swine flu, began spreading among humans in the U.S.
“On Thursday, Agriculture Secretary Tom Vilsack said he expects China to abolish the ban on certain pork products and resume imports ‘very soon.’ The announcement was made after Mr. Vilsack’s meeting with his Chinese counterpart at the U.S.-China Joint Commission on Commerce and Trade.”
This Journal article explained that, “Hog prices had weakened as the recession crimped demand. Early this year, the hog industry was dealt another blow by the H1N1 virus. China, Russia and other countries stopped some imports of U.S. meat, despite assurances by U.S. and international health officials that handling and consumption of pork is safe. Exports accounted for 20% of total U.S. pork output last year.
“During the first eight months, U.S. pork exports dropped 13%, and the industry is expected to see an end this year to a streak of 17 consecutive years of expanding exports, according to the USDA. China was the second-largest market for U.S. pork producers in 2008, importing $560 million of U.S. pork. This year, the Asian country’s imports plunged 70%.”
USDA news items on this development from yesterday can be viewed here and here, while a National Pork Producers Council news release from yesterday is available here.
Related statements on this development were also released by Sen. Mike Johanns (R-Neb.); Sen. Charles Grassley (R-Iowa); and Ag Committee Chairman Blanche Lincoln (D-Arkansas).
Keith Good
