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Ag would take a hit with EPA carbon proposal

Cattle and Beef Industry News
Jun 6, 2014

Last week, the Environmental Protection Agency (EPA) released a draft rule that would cut carbondioxide emission standards by 30 percent from hundreds of coalpowered plants across the U.S.

The plan, fueled by President Barack Obama’s climate-change initiative, has a number of groups, along with the House Energy and Commerce Committee, calling it an attack on jobs and affordable energy.

“Despite the fact that the president’s cap-and-trade legislation failed in Congress, his EPA is pushing through a new rule to overhaul our nation’s energy sector. This regulation on existing power plants will inevitably cause electricity rates to skyrocket for businesses and consumers nationwide and will eliminate thousands of well-paying jobs,” the committee wrote in a press release.

Along with the potential of putting a number of people out of work, the announcement follows a long line of proposals and changes that threaten U.S. agriculture, according to Ashley McDonald, National Cattlemen’s Beef Association’s (NCBA) Deputy Environmental Counsel. Along with increased energy costs, the plan would also hit producers in other areas, including fertilizer prices, and could put more producers out of business.

“It’s going to end up being a really expensive plan for the economy,” McDonald told Western Livestock Journal.

The American Farm Bureau Federation (AFBF) and the National Rural Electric Cooperative Association (NRECA) joined NC- BA in sharing concerns over the proposal that has the potential to put coal-fired power plants out of business.

“U.S. agriculture will pay more for energy and fertilizer under this plan, but the harm won’t stop there,” American Farm Bureau Federation President Bob Stallman said. “Effects will especially hit home in rural America.”

Stallman said rural electric cooperatives that rely on old coal plants for cheap electricity would suffer if EPA implements the proposal.

NRECA CEO Jo Ann Emerson said June 2, “It’s very disappointing and disturbing that the EPA proposed a regulation that goes further than the Clean Air Act allows by taking an ‘outside the fence’ approach to setting the emissions reduction requirements that states must accomplish.”

The Biotechnology Industry Organization (BIO) said the EPA should recognize in its rule that carbon emissions from renewable biomass are fundamentally different from those of fossil fuels.

“EPA is missing an opportunity to give industry clear guidance that using sustainable biomass in energy generation mitigates greenhouse gas emissions by recycling atmospheric carbon,” said Brent Erickson, Executive Vice President of BIO’s Industrial & Environmental Section.

While there are limits in place for the level of arsenic, mercury, sulfur dioxide, nitrogen oxides, and particle pollution that power plants can emit, there are currently no national limits on carbon pollution levels, according to the current administration. In addition, EPA Administrator Gina McCarthy counters that the plan will actually create jobs and improve the economy.

“By leveraging cleaner energy sources and cutting energy waste, this plan will clean the air we breathe while helping slow climate change so we can leave a safe and healthy future for our kids. We don’t have to choose between a healthy economy and a healthy environment—our action will sharpen America’s competitive edge, spur innovation, and create jobs,” she said.

Despite McCarthy’s reassurance, a number of state representatives and members of the House Energy and Commerce Committee have voiced their disapproval of the plan.

Rep. Fred Upton (R-MI), Chairman of the House Energy and Commerce Committee, said the Environmental Protection Agency’s rule amounted to a cap-andtrade system, which Congress rejected in 2009. “Four years after a Democratic senate rejected cap-andtrade, the administration continues its pursuit to regulate where Congress refused to legislate,” Upton said in a statement.

Another critic, Rep. Adam Kinzinger, (R-IL), criticized the timing of the plan. “At a time when our economy is stagnating and families all over are struggling to make ends meet, I cannot understand why President Obama has chosen to issue regulations that will cost thousands of jobs and increase utility costs for millions,” Kinzinger said in a news release sent Tuesday. “America instead needs to pursue an all-of-the-above energy approach that supports a broad spectrum of energy sources and unleashes the ingenuity of the free market.”

Rep. Pete Olson (R-TX) said, “The economic costs of this rule will be tremendous—even EPA sets the price tag in the billions, and the Chamber of Commerce recently said that the cost to our economy could exceed $50 billion and cost 200,000 jobs. Our economy is still struggling to recover from the Great Recession and this rule will only push our recovery back further through job losses and higher energy costs.”

Rep. Lee Terry, (R-NE) said it appears that the administration wants to force the power industry to move away from coal. That will mean higher costs that will be passed along to customers, he said. … “This is just a guillotine coming down,” he said.

But the plan is not without its supporters. National Farmers Union President Roger Johnson said the plan provides benefits to agriculture in that it curbs atmospheric carbon contributions—and that the ag industry should weigh in.

“Agriculture stands ready to be an important part of the solution to our climate challenges. I encourage Congress and the administration to engage the agricultural community in reducing carbon pollution by creating voluntary incentives for sequestering carbon and implementing conservation strategies that preserve our limited soil and water resources,” he said in a statement.

Rep. Alan Lowenthal, (D- CA) said the action was long past due. “I’m proud to see the president take action on climate change when many in Congress won’t agree that we even have a problem. The president has taken a big step under the Clean Air Act, but to comprehensively address this problem Congress will need to show the same leadership.”

Clean Water Act

The announcement followed EPA’s April proposal to define “Waters of the Unites States” under the Clean Water Act (CWA), which is another looming concern for agriculture. A growing concern of a number of industries seems to be centered around whether or not it is part of the president’s job to choose which industry will survive and which will not.

“That’s the job of the marketplace,” McDonald pointed out. “They should not be in the game of picking winners and losers.”

An Interpretive Rule that was included in the CWA proposal was written without input from those it affects directly, according to comments sent in by NCBA.

According to EPA, the purpose of the Interpretive Rule is to clarify the applicability of the exemption from permitting under section 404(f)(1)(A) of CWA to discharges of dredged or fill material associated with certain agricultural conservation practices based on the Natural Resources Conservation Service (NRCS) conservation practice standards.

In comments submitted to Under Secretary for Natural Resources and Environment Robert Bonnie, NCBA says the rule narrows the scope of the “normal farming, silviculture and ranching activities” exemption and changes the liability for ranchers and farmers, which will ultimately decrease participation in conservation programs.

“The only way for ranchers to protect themselves and their operations from CWA liability is simply to not participate in conservation programs and not implement voluntary conservation efforts on their operations,” NCBA’s President Bob McCan wrote.

The proposed rule is full of errors, lacks transparency and would expand the federal government’s regulatory control over land not previously regulated by the CWA, according to a new analysis and review by University of California-Berkley Economist David Sunding, “Review of 2014 EPA Economic Analysis of Proposed Revised Definition of Waters of the United States.”

“The estimates associated with Section 404 compensatory wetland mitigation, which contain some of the most glaring errors, represent approximately 40 percent of the total costs and 85 percent of the total benefits,” the Sunding report said. “This suggests the entire analysis is fraught with uncertainty as to render it insufficient for evaluating programmatic impacts of this scale. Estimates of economic impacts to other programs rely on an incremental jurisdiction determination that is deeply flawed.

Additionally, the systematic exclusion of various costs and benefits ignores important impacts to permit applicants and permitting agencies.

“In addition to the methodological errors discussed above, EPA’s analysis suffers from a lack of transparency. Explanations of calculations, basic assumptions, and discrepancies between various EPA analyses are rarely provided. This is particularly troubling given that the entire report is based on records from the Corps’ (Army Corps of Engineers) internal ORM2 database, which is unavailable to outside entities. The author of this report spent considerable time replicating the calculations used in the analysis, but was unable to vet the validity of the underlying data. Any errors or inconsistencies in documentation, sample selection, or data extraction are necessarily overlooked. These shortcomings indicate that a more thorough analysis is required to properly assess the economic impacts of a definitional change.”

The proposed rule would expand EPA reach to include small, isolated wetlands, ephemeral drains and ditches.

Stallman said in a statement that the Sunding analysis shows a need for EPA to start from scratch on the proposed rule.

“The EPA’s proposed waters of the U.S. rule is irreparably flawed from an economic standpoint,” he said. “The rule is also an end run around Congress and two Supreme Court rulings, and in their official comments, farmers and ranchers across the national are calling on EPA to ditch the rule.”

In a letter to McCarthy, U.S. Sen. David Vitter (R- LA) said EPA has hindered environmental restoration through regulation.

“It is clear that the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers are resorting to an unfounded narrative in order to mask the hardship the rule will bring to private landowners,” Vitter said. “Indeed, if finalized, the proposed WOTUS rule would result in the federal takeover of private property owned by millions of American families, farmers, small businesses and municipalities. However, as explained below, EPA and the Corps ignore the agencies’ history under the Clean Water Act of shutting down local conservation efforts, as well as the likelihood that other stewardship projects could be impeded if the proposed rule is finalized.”

EPA will accept comment on the proposal for 120 days after publication in the Federal Register and will hold four public hearings on the proposed Clean Power Plan during the week of July 28 in the following cities: Denver, Atlanta, Washington, D.C. and Pittsburgh. Based on this input, EPA will finalize standards next June following the schedule laid out in the June 2013 Presidential Memorandum.

The Energy and Power Subcommittee plans to review EPA’s proposed rule at a hearing later this month. — Traci Eatherton, WLJ Editor

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