Rep. Peterson brawling over ethanol expansion

Ethanol plant
One of Rep. Collin Peterson's demands involves corn ethanol. Peterson said the Environmental Protection Agency threatens the fuel's viability.
MPR photo/Mark Steil

Rep. Peterson, who chairs the House agriculture committee, has been negotiating all week with fellow democrat Henry Waxman. The California congressman is one of the main sponsors of the climate change bill.

Waxman said a deal is near, but Peterson is more skeptical. He told the "Environment and Energy Daily" the two have yet to settle a couple of issues Peterson calls "deal breakers".

William Yeatman with the Competitive Enterprise Institute in Washington is following the debate. He said Peterson has a lot of farm state support in the negotiations.

Politics can't overcome what appears to be true.

"He said that he's got 45 congressmen lined up against this bill unless his demands are met," Yeatman said.

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One of Peterson's demands involves corn ethanol. Peterson said the Environmental Protection Agency threatens the fuel's viability.

The EPA is calculating ethanol's greenhouse gas emissions. The agency said the tally should include carbon dioxide released when farmers break new land to replace corn used for ethanol -- even when that happens in other countries.

Peterson has said including those world impacts could kill ethanol's expansion. The EPA plan could make new ethanol facilities ineligible for financially critical government subsidies.

Yeatman said Peterson wants language in the climate bill forcing the EPA to drop world impacts from its ethanol tally sheet.

"His main jewel, his main goal is to have the EPA not block the progress of the corn-based ethanol industry," Yeatman said.

But Peterson also has other concerns. At one time it was thought that climate change legislation would be a substantial money maker for agriculture.

Those hopes are fading, and Minnesota Farm Bureau President Kevin Paap said his organization even opposes the current bill. He said the legislation will boost energy prices for farmers and others, without much of a payback.

"Agriculture has got a good role to play as we reduce greenhouse gases," Paap said. "But we want to make sure we're at the table, we want to make sure our role to offset that is recognized."

One of the big opportunities for farmers under the legislation's cap and trade system is to sell greenhouse gas credits.

Some companies will emit more gases than the legislation allows. To avoid federal penalties, they must buy emission credits from someone who pollutes less than their federal allotment.

Farmers likely will have those credits to sell. Paap said that's because planting certain crops and using better land management techniques are beneficial to the environment.

"Many of those items will also help in reducing greenhouse gases," Paap said.

Something as simple as reduced plowing helps slow the release of greenhouse gases, since freshly turned earth emits carbon into the air.

Paap said the problem is that farmers have already improved their land management practices. He said the climate bill doesn't reward farmers for the improvements they've already made.

Paap and others want some of the more recent changes factored into the climate change bill. To get that, they're counting on Collin Peterson.

"I judge Collin Peterson to be a fairly effective dealmaker," said University of Minnesota agriculture expert C. Ford Runge.

Runge said it's quite possible that Peterson will get his way on the climate legislation, but Runge said that doesn't necessarily mean that Peterson is right.

Going back to the ethanol question, Runge said most studies show that corn ethanol has increased agricultural greenhouse gas emissions in other parts of the world.

"Politics can't overcome what appears to be true," he said.

The question of whether Peterson gets what he wants in the climate legislation may be answered soon. Peterson has said he believes he can defeat the bill on the house floor if the changes are not made. The house may vote next week.