Washington Insider -- Monday

Vermont Label Rules Change, but the Fight Goes On

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

OMB Still Reviewing RFS Plan

OMB is currently reviewing the proposed RFS rule for 2017. That rule contains 2017 renewable volume obligations (RVOs) for renewable fuel, advanced biofuel and cellulosic biofuel. It also contains the 2018 RVO for biomass-based diesel.

On April 15 the Environmental Protection Agency (EPA) sent proposed RFS volumes for 2017 and 2018 to OMB for review. EPA’s Regulatory Development and Retrospective Review Tracker currently forecasts the 2017 RFS rule will be published in the Federal Register in June.

Under the Clean Air Act, EPA must set standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel by November 30 of the year before the standard is set for, and 14 months before the year that the biodiesel standard is set for -- the agency has vowed the rule will be finalized by Nov. 30, after missing statutory deadlines for years 2014 through 2016 and issuing three years of standards in its latest rule issued Nov. 30, 2015. EPA's issuance of the RFS volumes to OMB is usually the final step before the rule is publicized. OMB's review is limited to 90 days, but typically takes 30 days.

The RFS mandates the use of about 18.11 billion gallons of renewable fuels this year, 80% of which is ethanol. For the first time, EPA this year mandated consumption targets that would exceed 10% of projected gasoline demand (10.1%). That figure eclipsed those for 2014 (16.28 billion gallons, or 9.2%), 2015 (16.93 billion gallons, or 9.5%), and a prior EPA estimate for 2016 (17.4 billion gallons, or 9.7%), which as later increased.

Suits by Oil & Gas Industry, Others Seek to Block Sage Grouse Plan

The sage grouse conservation plan by the Interior Department and USDA is being challenged via a lawsuit filed in US District Court for the District of North Dakota by the Western Energy Alliance and the North Dakota Petroleum Council.

The suit filed May 12 seeks to block implementation of the conservation plan, alleging the Bureau of Land Management and Forest Service land use plans developed were amended in violation of federal environmental procedural laws.

"Western Energy Alliance’s complaint is narrowly targeted to challenge key procedural violations related to the promulgation and imposition of habitat designations and related restrictions and prohibitions on oil and natural gas leasing and development," said Bret Sumner, shareholder at Beatty & Wozniak and lead attorney for the Alliance.

Lawsuits challenging the sage grouse plan have also been filed by counties in Idaho, Utah, Nevada, the American Exploration & Mining Association, the Wyoming Coalition of Local Governments, the Wyoming Stock Growers Association and the Western Watersheds Project.

Washington Insider: Vermont Label Rules Change, but the Fight Goes On

The GMO label fight continues to twist and turn. For example, Informa Economics is reporting this week that a key part of Vermont’s GMO food labeling law will be delayed by a rider on Vermont’s annual budget bill that will push the start date of one key part law back by one year.

That provision would allow citizens to sue companies for not complying with GMO labeling requirements. Late in the legislative session, lawmakers decided to delay the implementation of that provision in response to store owners’ concerns about legal action for products that were distributed before the law came into effect.

The change, Vermont’s Attorney General’s Office says, means that until the beginning of 2017, manufacturers will not be liable for failing to label products on store shelves if those products were distributed before the law takes effect this July.

Vermont’s Senate Appropriations Committee added the language to the omnibus budget bill shortly before passing the bill out of committee in April. Recently, the House and Senate gave final approval to the budget bill.

The Vermont Retail and Grocers Association issued a statement praising the change and arguing that it will “make the implementation a little smoother this summer and beyond.”

While it notes the delay, the food industry points out that the issues are largely unchanged and that the change includes no real relief for companies.

Meanwhile, the Associated Press is reporting that state-level concerns are increasingly polarizing the GMO debate and discusses a meeting of GMO supporters in North Dakota last week. Vermont, AP points out, is the only state with fewer people than North Dakota, but that North Dakota leads the nation in the production of 10 farm commodity classes and is second in four other groups. And, it overwhelmingly supports GMO technology.

The AP said the conference featured supporters of GMO foods and a “friendly audience at an annual biotechnology conference.” A key theme was that Vermont’s law will unfairly stigmatize genetically engineered foods and that it is designed to drive them off the market. The result will be “chaos in the food industry and it's going to cost consumers money," said Bruce Chassy, alongtime food and nutritional researcher at the University of Illinois and promoter of biotech foods.

Chassy argued that the vast majority of scientific research has found GMO generally safe, but that some consumers continue to worry that “new GMO foods could somehow become allergenic or toxic through the engineering process.” The Vermont law is a product of that thinking, he says.

North Dakota has recently become increasingly active in support of GMOs. The state House in the last legislative session voted 78-0 in favor of a resolution asking for national food labeling standards—in contrast to individual ones like the law in Vermont--and extolling the benefits of GMO foods.

Chassy said after his keynote speech at North Dakota State University that opponents of the technology are using labeling to try and get GMO foods off the market. "It's working," he said.

"They have chipped off one little state that is notoriously liberal and maverick on issues and are using that as a lynchpin of a process to cause American agriculture to grind to a halt on GM."

Other threats were leveled, as well. “Vermont will learn its lesson" about the cost of defending the law and what it will do to the price of food, Thomas Redick, a lawyer for the Global Environmental Ethics Counsel, told AP.

"More power to them if they want to be that little corner of the world," Redick said. "They set aside a million dollars of state funds in their law to pay for the lawyers. I think they're going to run out soon and will need another few million."

The Vermont law would impact companies that distribute nationally, as well as within Vermont, one representative of a large food producer said, and argued that the financial pain will be felt from field to fork. "This is a big deal through the supply chain," he said.

So, the issue now involves the Senate, where it seems to be stalled, and in at least some cases, in State legislatures. On the political side, it seems well funded, so the “fear of legal costs” that the group in North Dakota discussed, seems unlikely to be decisive. Increasingly, it seems that a court decision may be in the works, but the issues are so complex several cases may be required to end the fight—which producers should watch closely, Washington Insider believes.

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