Washington Report for 8-12-13

By Steve Kopperud

2014 to See Lower Mandate as EPA Releases 2013 Renewable Fuels Standards

Whether the White House is paying attention to increasing calls for a repeal of the Renewable Fuels Standard or focusing on warnings from the fuel industry that RFS levels are unrealistic given gasoline sales, the Environmental Protection Agency released its 2013 RFS levels for four fuel groups, at the same time signaling it will ease RFS levels in 2014. 

The 2013 RFS levels require a total of 16.55 billion gallons of renewable fuels – mainly corn-based ethanol – be blended with gasoline to hit a 9.74 percent blend rate. The overall mandate adds to ethanol the following levels of other biofuels:

• Biomass-based diesel – 1.28 billion gallons; 1.13 percent (unchanged)
• Advanced biofuels (biodiesel, etc.) – 2.75 billion gallons; 1.62 percent (mostly unchanged)
• Cellulosic biofuels (wood-based) – 6 billion gallons; 0.004 percent (down from 8.6 billion mandate)

EPA said in calculating its congressionally mandated 2013 blend levels, several public comments reflected concerns over the “E10 blend wall,” the point at which “there is difficulty in incorporating ethanol into the fuel supply at volumes exceeding those achieved by the sale of nearly all gasoline as E10 (10 percent blend rate).” This means because of lagging gasoline sales, the agency agrees the fuel industry right now can’t blend enough ethanol to hit the mandated biofuels use level without going above the 10 percent limit per gallon of gasoline. Gasoline refiners contend to go above 10 percent will lead to engine damage and lower fuel sales because most cars and trucks can’t operate on higher ethanol blends.

Because of this concern, the agency said, it will use its authority to reduce both the advanced biofuel and total renewable biofuel volumes in the forthcoming 2014 RFS requirements. It also provided longer lead time and flexibility to fuel producers to comply with the 2013 RFS requirements by extending the deadline for compliance to June 30, 2014.

Some in the ethanol industry said the EPA announcement is a step in the right direction and shows the agency is capable of reacting to “real market signals” and adjusting the RFS. Critics, however, contend the 2014 announcement is too little, too late, and that Congress must repair or repeal the RFS. 

“While the Administration acknowledged that higher ethanol mandates are unworkable by suggesting a new approach for 2014 standards, EPA missed an opportunity to fix the problem this year,” said the American Petroleum Institute, a major critic of the RFS. “Now it’s up to Congress to exercise leadership to end this dangerous mandate.”

The American Soybean Association released a statement, saying, “As producers of the feedstock that accounts for more than half of all domestic biodiesel production, we are very pleased with today’s announcement.” 

The National Chicken Council, while giving a nod to EPA for “recognizing the reality” of RFS problems, called the agency announcement “a band-aid approach … to a problem that needs a long-term, sustainable solution … we need certainty in market that only Congress can provide by repealing the conventional requirements of the RFS.”

Legislation to repeal the mandate has been introduced in House by Rep. Bob Goodlatte (R-VA), chairman of the House Judiciary Committee, and Rep. Jim Costa (D-CA), a member of the House Agriculture Committee. In the Senate, a repeal was introduced in June by Sen. John Barasso (R-WY) and several colleagues. 

The House Energy & Commerce Committee, following two days of hearings on the RFS and its impact on food/agriculture, set up a working group of four committee members led by Rep. John Shimkus (R-IL) to work with gasoline, biofuels, ag and other stakeholders on identifying improvements in the RFS mechanism. Goodlatte and Costa, along with Reps. Steve Womack (R-AR) and Peter Welch (D-VT), sent committee chairman Fred Upton (R-MI) and ranking member Rep. Henry Waxman (D-CA) a letter urging them to ensure the Goodlatte/Costa bill is part of the RFS solution.

 

Farm Bill August Progress All Informal

With Congress in recess for the next month, any progress on the 2013 Farm Bill will center on informal discussions between the staffs of the two ag committees, the goal to reconcile as much of the two chamber-passed bills as possible prior to members returning on September 9. 

Action in the House is predicated upon Majority Leader Eric Cantor (R-VA) and his 20-member nutrition working group agreeing on a stand-alone nutrition bill – the title stripped out of the House Farm Bill when it was approved last month – and GOP leadership’s decision on whether that product will pass the full House in September. Currently, Cantor’s group has reached a consensus that the target savings in a nutrition bill, expected to be unveiled just before the House returns, will be closer to $40 billion over 10 years rather than the $21 billion in the House Agriculture Committee-approved bill first brought to the floor.

The Senate has named Farm Bill conferees and is ready to go.

Rep. Collin Peterson (D-MN), ranking ag committee member, told a Minnesota radio station, “All I can tell you is this, that the Speaker told me when we left on Friday this he is going to ask for a vote on the food stamp thing right away when we get back after Labor Day … whatever happens, he’s going to appoint conferees the next day and he wants to get the bill done by September 30.” Stabenow said late last week, “I know the majority floor leader (Cantor) does not want a Farm Bill. I know the Speaker would like to get it done.”

Peterson also said he could live with a two-year extension of current programs if the Farm Bill doesn’t get done this year. He said he can’t see a Farm Bill passing the House in an election year. He said the Senate will go along despite its declarations it will not support another extension. “If milk goes to $39 per hundredweight,” Peterson said, referring to a reversion to 1949 “permanent law” absent a new Farm Bill or an extension, “You know what’s going to happen. (Senators) can huff and puff, but will go along.”

 

King Farm Language Creating Flap

Language included in the House-passed Farm Bill to prohibit states from setting “animal welfare” livestock/poultry production standards that bar the sale of products from other states is creating a firestorm of concern, first among animal rights activists and now among state legislators who fear a loss of authority.

The language, authored by Rep. Steve King (R-IA), is aimed at a California law enacted shortly after the state approved a ballot question prohibiting caged egg-laying hens. That second law prohibits the sale of eggs from states without identical “welfare” requirements. King says the language is needed to preserve interstate commerce and fair competition among the states in ag products. His Iowa district is the state’s largest egg producer.

The National Council of State Legislatures said the King language is, “A broad pre-emption of state authority impacting vital agriculture policies designed to protect the safety and wellbeing of our farmland, waterways, forests and consumers.” More than 100 House members wrote to House Agriculture Committee Chairman Frank Lucas (R-OK) telling him the King language is too broad, and asked the language not be included in the final Farm Bill. 

Animal rights groups, led by the Humane Society of the U.S., have been burning up the Internet for a week, calling the King language “one of the most serious threats to animal protection laws ever.” HSUS President Wayne Pacelle told reporters at a briefing, “The problem for King is he didn’t limit this to animal welfare. It applies to every agricultural product out there.”

However, HSUS contends the language would not only affect ag products. In one of its email “alerts,” HSUS says King would also overturn laws providing “humane standards for dogs in large-scale commercial puppy mills … cracking down on the brutal practice of shark finning … stopping the slaughter of horses … can you imagine all of these laws being wiped out by Congress?” The latest “alert” also asked more than once for donations to HSUS efforts to have the King language removed from the final Farm Bill.

 

House GOP Group Calls for Criminal Investigation of MF Global’s Corzine

House Republicans are calling for a federal criminal investigation into whether former New Jersey Governor and Senator John Corzine lied to Congress during his hearing testimony about the 2011 bankruptcy of MF Global, the eighth largest bankruptcy in U.S. history.

In a letter to Attorney General Eric Holder, 18 GOP members said new evidence arose in a civil trial against Corzine, evidence they say contradicts his congressional testimony. The group said this may indicate Corzine perjured himself.

Said Rep. Michael Grimm (R-NY): “Mr. Corzine has a duty to be honest with the customers from whom he stole money, as well as the Members of Congress to whom he testified. Any refusal to move forward with an investigation would be a gross injustice.”

 

Tyson to Suspend Purchase of Cattle Fed Zilmax

Come September 6, Tyson Foods will suspend on an interim basis purchases of cattle fed Zilmax, an FDA-approved growth promoter made by Merck & Co. Inc., the meat processor announced. Tyson cited concerns over cattle with difficulty walking or unable to move arriving at its slaughter plants. Merck said tests have shown Zilmax, used worldwide for more than two decades, is safe and it is working with Tyson. Zilmax is one of a family of drugs called beta agonistes. 

“We do not know the specific cause of these problems, but some animal health experts have suggested that the use of the feed supplement Zilmax, also known as zilpaterol, one possible cause,” Tyson said in a letter to U.S. feedlots. The company added its investigation is ongoing.

 

House Approves Regulatory Review Bill

The full House approved legislation that would require congressional approval of federal agency “major rules,” regulations deemed in the bill to cost $50 million or more. The review requirement also carries language bringing rules with “adverse economic effects” under congressional scrutiny. It also precludes the administration from collecting any form of carbon tax until such a program passes congressional review.

Under the approved bill, federal departments and agencies would be banned from enforcing major rules unless Congress adopts a joint resolution within 70 “session days,” days Congress is formally at work. Prior to a floor amendment, the requirement in the bill for congressional oversight would have applied to rules with a $100-million price tag, the number used by the Office of Management & Budget in determining a proposed rule’s economic impact on the regulated industry.

The White House said President Obama will veto the measure if it reaches his desk. The administration said agencies must follow federal review rules when promulgating regulations and Congress already has the ability to review those rules.

 

Schuster Tells Governors House Waterways Bill Coming; May Give Congress Project OK

House Transportation & Infrastructure Committee Chairman Bill Schuster (R-PA) told the National Governors Association annual meeting in Milwaukee his committee will take up its version of the Water Resources Reform & Development Act in September and hopes to have it on the floor in October.

The full Senate approved its version of the waterways bill in May. That package tackles funding to modernize locks and dams, update river projects, and directs the Army Corps of Engineers to increase efficiency. 

While Schuster didn’t give the state executives details of his waterways bill, a statement released in Washington, D.C., says WRRDA “is a top priority for us.” Reports indicate the full committee has reached agreement on the bill’s framework and that the final chairman’s draft will be unveiled shortly after Congress returns in September.

One new aspect of the House framework designed to address Schuster’s concern over too much power being vested in the Corps of Engineers would require the Corps to select projects for funding and submit that list to Congress for review and approval. In addition to ensuring the Corps is answerable for its expenditures and project selection, the system would force Congress to revisit WRRD more frequently than it has over time, Schuster said.

WRRDA has not been reauthorized since 2007; its previous reauthorization was in 2000. The law is supposed to be revisited every two years. Schuster says this failure to keep up with waterways challenges has led to a system that is “growing more obsolete every day.” 

 

Baucus to Push for Presidential Trade Promotion Authority

Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, introduced legislationto extend the Trade Adjustment Assistance, a workplace retraining program designed to help workers adversely affected by U.S. trade deals. As part of that effort, he said, he’ll move legislation to give President Obama trade promotion authority (TPA).

The president has requested Congress give him TPA, an authority enjoyed by most presidents which allows them to directly negotiate bilateral trade agreements for submission to Congress for approval on straight up or down votes.

 

USDA Says Persistent Drought Means Haying, Grazing on CRP Acres

The U.S. Department of Agriculture said severe drought conditions persist in several areas of the country and this means ranchers may graze cattle or cut hay on some Conservation Reserve Program acres under certain conditions and on a temporary basis. Further, CRP annual rental payments related to emergency haying and grazing will be reduced from 25 percent to 10 percent, with the sale of hay allowed under certain conditions. Details of the emergency assistance can be found by going to www.fsa.usda.gov/crp.

 

Senate Confirms Two USDA Executive Nominees

The full Senate confirmed the nominations of Krysta Harden to be U.S. Department of Agriculture deputy secretary of agriculture, and Robert Bonnie to be USDA under secretary for natural resources and the environment. 

Harden previously served in the department as assistant secretary for legislative affairs and most recently as Secretary of Agriculture Tom Vilsack’s chief of staff. Bonnie served as a senior advisor to Vilsack.