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DAVID KRUSE

By Staff | Jul 3, 2009

There was a time when we expected agriculture to support a climate bill. Soil sequesters carbon and crops absorb carbon dioxide.

Agriculture was tailor-made to limit greenhouse gas emissions. Yet because the Environmental Protection Agency decided to run with bogus “indirect land use” theory, they can stick their climate bill where the sun doesn’t shine from the perspective of agriculture.

The EPA has taken an anti-biofuel stance relative to GHG scoring. A biofuel has to reduce GHG emissions by 50 percent to be scored as a renewable fuel. The EPA has the authority to drop that requirement to 40 percent. The EPA rated biodiesel at 22 percent. Biodiesel was penalized 20 percent for nitrous oxide emissions that originate through application of nitrogen fertilizer on cornfields. Any of you guys apply nitrogen to soybeans?

Soybeans reduce the amount of nitrogen that is applied to corn by 25 percent in my operation, so should score well above 40 percent, even before bogus indirect land use deductions are considered. Soybeans should be given credit for reducing nitrous oxide emissions not penalized for them. The EPA says that corn only reduces GHG emissions 16 percent compared to petroleum.

In 2005, the International Center for Technology Assessment updated its study “Real Price of Gasoline” and has concluded that the combined total of security and protective services for our importation of crude oil has cost the U.S. taxpayer $78 billion to $158 billion. The amount of carbon released for this protection of supply must be astounding.

Why doesn’t EPA assess a carbon penalty for the protection of imported foreign crude oil? And not give a credit to my corn and soybeans for reducing dependence on foreign oil?

I know none of this makes any sense. It has ticked off farm state legislators. If this is the kind of senseless rationale was going into a climate bill, then nobody wanted anything to do with it.

The damage done to biofuels industries and subsequently corn and soybean values by EPA could far offset the crumbs that agriculture was being offered in any payment for carbon sequestration.

Representative Collin Petersen, chairman of the House Ag Committee, is leading the charge for agriculture. He challenged Ag Secretary Tom Vilsack’s promotion of green payments, holding up a copy of an EPA study of the House bill concluding there wouldn’t be hardly any.

Vilsack says that he believes the “opportunities” will outweigh the cost. Opportunities don’t write us checks. Opportunities are just illusions in Washington. Unless you have got it down in black and white, assurances mean nothing.

Even then, they can turn black and white into gray and the fact the EPA, which was to administrate climate regulation, has already shown its colors against biofuel, it is asking for trouble.

Collin Peterson says that he doesn’t want the EPA anywhere near our farmers. The idea accepted by EPA that growing corn for biofuel in the U.S. causes some logger to cut down more trees in the Amazon is absurd. Deforestation in the Amazon has trended significantly lower all the while U.S. farmers expanded corn production to meet new demand from the ethanol industry.

Collin Peterson did an exceptionally good job of holding his ground, advocating for needed changes in the climate bill to accommodate agriculture and rural America. The primary concession gained was that USDA, not EPA, would administer the climate bill relative to agriculture.

One provision agreed to is that the EPA is enjoined from enacting its indirect land use carbon scoring against ethanol and biodiesel for now. Even they had admitted that their work was thin. They have five years to study the issue further before coming with definitive conclusions on land use effects.

The study will include input from USDA, EPA and DOE, so Peterson says, “So what that means is that USDA has veto power over this because without all three agencies signing off, it cannot move forward. If all three agencies sign off, then there is a provision that there is anther year for Congress to be able to intervene if we don’t agree with the decision that is made and the study by the three agencies.

So nothing can happen for six years. It’s out of the whole equation, out of the RFS and so forth.”

The American Coalition of Ethanol was happy but skeptical, saying, in a prepared statement, “While we are enormously pleased with this agreement, we recognize that at this stage, EPA still proposes to ascribe a carbon penalty to biofuels based upon their disputed computer modeling.

“Therefore, ACE calls upon EPA to reconsider their (sic) approach.”

There are other issues pertinent to agriculture in the climate bill. A new carbon offset program will be run by USDA, not EPA, GHG emissions from agriculture will not be regulated under emissions regulations, so cow flatulence is acceptable.

Rural electric providers won fairer treatment. Those against climate legislation will still probably be against climate legislation, but at least if they enact provisions Collin Peterson included, it should keep EPA away from agriculture for another six years anyway.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

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