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Ethanol lobby flexes muscle on climate bill



July 15, 2009 – Comments (1) | RELATED TICKERS: VLO , GPRE

Thats right even VLO is now an ethanol producer.

Ethanol lobby flexes muscle on climate bill

By Jim Snyder

Posted: 06/24/09 05:53 PM [ET]


The deal House Democrats were forced to strike on the climate change bill demonstrates the power of the corn ethanol lobby to get its way on Capitol Hill, despite an array of interests aligned against it.

Ethanol’s varied critics — which include oil producers, food manufacturers and environmental groups — thought they had won a victory in the 2007 energy bill when they successfully added language to require corn ethanol and other biofuels to meet certain greenhouse gas emission requirements.

document.write(''); As part of the calculation, the legislation directed the Environmental Protection Agency (EPA) to weigh changes in land use activities that could be linked to the growing use of corn as a fuel instead of a food in the United States.

Conceivably, an indirect land use change could encompass a decision by a Brazilian farmer to chop down a chunk of forest that absorbs carbon dioxide to plant corn in order to take advantage of higher market prices.

The indirect land use language had the potential to limit the growth of ethanol as a fuel source.

But EPA’s move this year to implement the law drew rebukes from the ethanol industry, which argued it would be next to impossible to link development practices in foreign countries to ethanol production in the United States.

The critics included House Agriculture Committee Chairman Collin Peterson (D-Minn.), who angrily denounced EPA in a committee hearing and in interviews with reporters.

It was Peterson’s subsequent opposition to the climate change legislation that threatened the bill and forced its main sponsor, Energy and Commerce Committee Chairman Henry Waxman (D-Calif.), to rewrite portions to the benefit of farm communities.

The bill now apparently delays the EPA ethanol emissions rulemaking for at least five years and requires additional input from both the U.S. departments of Agriculture (USDA) and Energy on the indirect land use issue.

Lobbyists for environmental groups cautioned they had not seen the actual language, but said the concessions to Peterson and the ethanol lobby appeared to weaken the overall climate bill.

“EPA is doing yeoman’s work putting together the best science and putting out the best rule that it can. Undermining that scientific process and review at this point is unfortunate,” said Ann Mesnikoff of the Sierra Club.

“This doesn’t seem like a positive change,” said Joshua McNeil of the League of Conservation Voters.

Even so, both Sierra Club and the League said they supported the bill. The League has said it would withhold endorsement of any member who votes no on the bill this Friday when it is expected to come to the House floor.

Other environmental groups, however, said the move to delay an indirect land use rulemaking underscored concerns they already had with the bill.

Erich Pica of Friends of the Earth called the indirect land use language relating to ethanol’s carbon footprint the “first-ever greenhouse gas standard passed by Congress.”

“It’s unfortunate that this deal is being cut,” Pica said.

Others downplayed the significance of the concession. Joe Romm of the Center for American Progress’s Climate Progress blog said “as a matter of science, the deal is not optimal.”

But in the “real world,” Romm said, the change will not have much of an effect. That’s because most of the corn-ethanol required to be produced under the 2007 energy bill was grandfathered in and would not have to meet the emissions targets.

“We can’t lose sleep on this compromise,” Romm said.

Ethanol supporters, though, saw the indirect land use rulemaking as setting a dangerous precedent that could affect future ethanol production.

“We believe that additional study of the issue of indirect land use change will further demonstrate that these provisions should never have been part of the 2007 energy law to begin with,” said Tom Buis, the CEO of Growth Energy, a coalition of ethanol producers.

Buis added that the “theory of indirect land use change uses faulty models and assumptions.”

The indirect land use language was a late addition to a bill that otherwise was a significant victory for the ethanol lobby. The measure included a Renewable Fuels Standard (RFS) that mandated corn-ethanol production reach 15 billion gallons a year. Total biofuels production would increase to 36 billion gallons by 2022, under the bill.

The legislation prompted an ethanol construction boon that critics said helped fuel a sharp increase in corn prices.

Oil producers, food companies and livestock producers that feed their stock corn mounted a lobbying campaign that sought to link more ethanol production to rising food prices, and to convince Congress to rethink the RFS and the tax breaks the industry now gets.

Environmental groups, meanwhile, have argued that as farmers plant more corn to meet the ethanol production targets, there will be more pollution runoff due to increased use of fertilizers.

Farm interests gained other concessions in the deal Peterson struck with Waxman. Another victory gives the USDA the authority to determine what farm practices could qualify as carbon offsets. The bill originally vested that power with the EPA, which environmental groups argued had more expertise in measuring carbon dioxide and other emissions.

But farmers said they felt more comfortable with the USDA. It was a big issue, because the bill allows utilities to buy offsets if they can’t reduce their emissions at the smokestack to meet caps also established by the climate bill.

Farmers could earn offset credits by adding methane digesters to hog-waste lagoons, shifting to no-till farming practices so that soil retains more carbon or planting more carbon-absorbing trees. They could then sell those credits in a marketplace created by the bill to utilities and other industries that emit more carbon dioxide than allowed under the cap.

1 Comments – Post Your Own

#1) On July 15, 2009 at 2:24 PM, DaretothREdux (54.34) wrote:


Erich Pica of Friends of the Earth called the indirect land use language relating to ethanol’s carbon footprint the “first-ever greenhouse gas standard passed by Congress.”

Actually that was when Congress made it illegal to grow Hemp...


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