Washington Insider -- Friday

By DTN's Washington Insider

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

OMB Issues Threat to Veto House Energy, Water Appropriations Bill

House legislation that would fund federal water and energy activities is under a veto threat issued this week by the White House Office of Management and Budget. OBM says that as written, the $34 billion appropriations bill underfunds clean energy projects and contains harmful environmental riders that would block the administration from issuing rules that would subject coal mining, road building and excavating operations to Clean Water Act permitting requirements.

It also would permanently bar the U.S. Army Corps of Engineers from implementing a Clean Water Act rule that clarifies which waters fall under federal protection, a possibility that has caused considerable anxiety among farmers and ranchers.

"The bill significantly underfunds critical investments that develop American energy sources to build a clean and secure energy future, support the emerging clean energy technologies that create high-quality jobs, and enhance the Nation's economic Competitiveness," OMB's Statement of Administration Policy says.

Whatever comes out of the House will need to be reconciled by a future conference committee with similar legislation from the Senate. Senate Democrats named to that committee likely will use the threat of a presidential veto to convince their House Republican colleagues to drop at least some of the provisions the administration finds objectionable.

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Energy Efficient Bulbs Still on House Republicans' No-Go List

House Republicans are continuing their fight against energy efficient light bulbs by inserting in a fiscal 2015 appropriations bill a continuing ban that prohibits the Energy Department from enforcing energy efficiency standards for incandescent light bulbs. Then-President George W. Bush signed the Energy Independence and Security Act (EISA) into law in 2007, an act that among other things creates a standard which requires incandescent bulbs of 100, 75, 60 and 40 watts to use between 25% and 30% less energy.

Rep. Michael Burgess, R-Texas, –– who introduced the standard-blocking amendment –– says that the provision creating the light bulb "was an overreach." According to Burgess, the marketplace should be able to sort out problems regarding energy efficiency and Congress "should not be picking winners and losers in the marketplace."

Light bulb manufacturers oppose the Burgess amendment, and say they plan to comply with the efficiency standards whether they are enforced or not. So the congressman's appeal to the marketplace appears to be working. However, a spokeswoman for the National Electrical Manufacturers Association told the press that the association's members would prefer that the Energy Department be granted the funding "to enforce and defend the statute."

Environmental groups estimate that compliance with the light bulb standards will result in savings of nearly $13 billion a year, electricity savings equivalent to 30 large power plants and reduced carbon dioxide emissions of about 100 million tons of carbon a year.

However, for some, even a savings of $13 billion per year cannot compensate for the lost second or two between the time a switch is thrown and an energy-efficient compact florescent bulb springs to life.

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Washington Insider: Particulate Matter for Grain Elevators

The Environmental Protection Agency came out this week with a request for public comment on a proposal to revise its new source performance standards for grain elevators. The purpose, it says, is to reduce particulate matter emissions by clarifying existing standards for a small slice of the grain handling business: certain new and modified elevator facilities. The new standards apparently would cover only new equipment not currently covered by the existing regulations.

The agency also is proposing that all emissions standards for all affected grain elevator facilities be in effect at all times, including during startup, shutdown and maintenance activities. The focus of these standards are various facilities at grain elevators, including truck unloading stations, barge and ship unloading stations, grain handling operations and railcar loading and unloading stations.

While the effects of the proposal are not easy to sort out, it appears to leave unchanged the regulations for currently "affected facilities" but would establish standards for "a new type of barge unloader and column dryer" not covered by the existing standards.

Perhaps the best indicator of the modest effects EPA expects from new rule is its cost estimate, $1.08 million in capital costs for the whole industry and about $1.2 million in annual compliance costs. If these estimates are anywhere near correct, they suggest that the proposed rule has a very narrow target, indeed. Even the amount of emissions reduced is small — 31 tons annually across the entire country once the rule is fully implemented in 2018, according to the EPA's cost-benefit analysis. (By way of comparison, 31 metric tons of corn equals 1,220 bushels.)

Still, EPA reminds that particulate matter is dangerous, and is the main pollutant emitted by grain elevators — and the only criteria pollutant regulated under the EPA's new source performance standards. It is normally emitted from grain during the drying process, as well as when grain is moved between facilities and loaded or unloaded from transport vessels, the agency said.

The agency also notes that the proposal came as a result of a periodic review of its new source performance standards, which aim to help areas attain and maintain ambient air quality by ensuring that new and modified facilities use the best emissions reduction systems available. At the same time, the standards should take into consideration costs involved. Clean Air Act rules require EPA to review and, if appropriate, revise its existing new source performance standards at least once every eight years, but standards for grain elevators were last reviewed in 1984, so the recent review was long overdue.

In a key declaration concerning the proposal, EPA characterized it as reflecting generally what "well-controlled sources" are already doing within the grain elevator industry. As comments concerning the proposal come in over the coming months, it will be interesting to note whether the industry agrees with this characterization of a small, narrowly-targeted rule.

It also will be important to note how this proposal is received by producers amid the agency's efforts to better define its Clean Water Act authorities and to implement possible revisions in the Renewable Fuels Standard. At the moment, it is ramping up an outreach effort to farmers and rural areas and perhaps to improve its unpopular image, caught as it is between unhappy producers who think EPA is overreaching and unhappy advocate groups who think it is "captured" by industry.

Whether the agency is hamstrung by these controversies remains to be seen, but are clearly developments producers should watch carefully as they emerge, Washington Insider believes.

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