Post image for Ethanol Mandate Waiver: Decks Stacked Against Petitioners

The Governors of Georgia, Texas, Arkansas, Delaware, Maryland, New Mexico, and North Carolina have petitioned EPA Administrator Lisa Jackson to waive the mandatory ethanol blending requirements established by the Renewable Fuel Standard (RFS). The petitioners hope thereby to lower and stabilize corn prices, which recently hit record highs as the worst drought in 50 years destroyed one-sixth of the U.S. corn crop. Corn is the principal feedstock used in ethanol production.

Arkansas Gov. Mike Bebe’s letter to Administrator Jackson concisely makes the case for regulatory relief:

Virtually all of Arkansas is suffering from severe, extreme, or exceptional drought conditions. The declining outlook for this year’s corn crop and accelerating prices for corn and other grains are having a severe economic impact on the State, particularly on our poultry and cattle sectors. While the drought may have triggered the price spike in corn, an underlying cause is the federal policy mandating ever-increasing amounts corn for fuel. Because of this policy, ethanol production now consumes approximately 40 percent of the U.S. corn crop, and the cost of corn for use in food production has increased by 193 percent since 2005 [the year before the RFS took effect]. Put simply, ethanol policies have created significantly higher corn prices, tighter supplies, and increased volatility.

Agriculture is the backbone of Arkansas’s economy, accounting for nearly one-quarter of our economic activity. Broilers, turkeys, and cattle — sectors particularly vulnerable to this corn crisis — represent nearly half of Arkansas’s farm marketing receipts. Arkansas poultry operators are trying to cope with grain cost increases and cattle familes are struggling to feed their herds.

Section 211(o)(7) of the Clean Air Act (CAA) authorizes the EPA to waive all or part of the RFS blending targets for one year if the Administrator determines, after public notice and an opportunity for public comment, that implementation of those requirements would “severely harm” the economy of a State, a region, or the United States. Only once before has a governor requested an RFS waiver. When corn prices soared in 2008, Gov. Rick Perry of Texas requested that the EPA waive 50% of the mandate for the production of corn ethanol. Perry, writing in April 2008, noted that corn prices were up 138% globally since 2005. He estimated that rising corn prices had imposed a net loss on the State’s economy of $1.17 billion in 2007 and potentially could impose a net loss of $3.59 billion in 2008. At particular risk were the family ranches that made up two-thirds of State’s 149,000 cattle producers. Bush EPA Administrator Stephen Johnson rejected Perry’s petition in August 2008.

In the EPA’s Request for Comment on the 2012 waiver petitions, the agency indicates it will use the same “analytical approach” and “legal interpretation” on the basis of which Johnson denied Perry’s request in 2008. This means the regulatory decks are stacked against the petitioners. As the EPA reads the statute, CAA Section 211(o)(7) establishes a burden of proof that is nearly impossible for petitioners to meet. No matter how high corn prices get, or how serious the associated economic harm, the EPA will have ready-made excuses not to waive the corn-ethanol blending requirements. [click to continue…]

Post image for Hansen on Extreme Weather — Pat and Chip Respond

Last week, I posted a commentary on NASA scientist James Hansen’s study and op-ed, which attribute recent extreme weather to global climate change. In the op-ed, Hansen stated:

The deadly European heat wave of 2003, the fiery Russian heat wave of 2010 and catastrophic droughts in Texas and Oklahoma last year can each be attributed to climate change. And once the data are gathered in a few weeks’ time, it’s likely that the same will be true for the extremely hot summer the United States is suffering through right now.

My commentary concluded: “Hansen’s sweeping assertion that global warming is the principal cause of the European and Russian heat waves, and the Texas-Oklahoma drought, is not supported by event-specific analysis and is implausible in light of previous research.”

Although Hansen does not explicitly attribute the ongoing U.S. drought to global warming, he does blame global warming for both the 2011 Texas-Oklahoma drought and the current summer heat. And in his study, Hansen states: “With the temperature amplified by global warming and ubiquitous surface heating from elevated greenhouse gas amounts, extreme drought conditions can develop.”

This week on World Climate Report, Pat Michaels and Chip Knappenberger argue that the current U.S. drought “is driven by natural variability not global warming.” Their post (“Hansen Is Wrong“) is concise and layman-friendly. Here I offer an even briefer summary.

A standard measure of drought in the U.S. is the Palmer Drought Severity Index (PDSI), which measures the combined effects of temperature (hotter weather = more soil evaporation) and precipitation (more rainfall = more soil moisture). “The more positive the PDSI values, the wetter conditions are, the more negative the PDSI values, the drier things are.” The PDSI for the past 117 years (1895-2011) shows a small non-significant positive trend (i.e. towards wetter conditions). There is no greenhouse warming signal in this data.

[click to continue…]

Post image for Pressure Grows on EPA to Suspend Ethanol Mandate

The worst drought in 50 years has destroyed one-sixth of the U.S. corn crop. The USDA’s World Agricultural Supply and Demand Estimates (WSDE) report, released Friday, projects the smallest corn crop in six years and the lowest corn yields per acre since 1995.

As acreage, production, and yields declined, corn prices spiked. Last week, corn futures hit a record high of $8.29-3/4 per bushel.

If corn prices remain  high through 2013, livestock producers who use corn as a feedstock will incur billions of dollars in added costs. “These additional costs will either be passed on to consumers through increased food prices, or poultry farmers will be forced out of business,” warn the National Chicken Council and National Turkey Federation.

Even before the drought hit, corn prices were high. Prices increased from $2.00 a bushel in 2005/2006 to $6.00 a bushel in 2011/2012, notes FarmEcon LLC. A key inflationary factor is the Renewable Fuel Standard (RFS), commonly known as the ethanol mandate. Since 2005, the RFS has required more and more billions of bushels to be used to fuel cars rather than feed livestock and people.

Suspension of the mandate would allow meat, poultry, and dairy producers to compete on a level playing field with ethanol producers for what remains of the drought-ravaged crop. That would reduce corn prices, benefiting livestock producers and consumers alike.

EPA Administrator Lisa Jackson has authority under the 2007 Energy Independence and Security Act (EISA) to waive the RFS blending targets, in whole or in part, if she determines that those requirements “would severely harm the economy or environment of a State, a region, or the United States.” The pressure on her to do so is mounting. [click to continue…]

Post image for Hansen’s Study: Did Global Warming Cause Recent Extreme Weather Events?

A study by NASA’s James Hansen and two colleagues, published Monday in Proceedings of the National Academy of Sciences (PNAS), finds that during the past 30 years, extreme hot weather has become more frequent and affects a larger area of the world than was the case during the preceding 30 years. Specifically, the study, “Perception of climate change,” reports that:

  • Cool summers occurred one-third of the time during 1951-1980 but occurred only 10% of the time during 1981-2010.
  • Very hot weather affected 0.2% of the land area during 1951-1980 but affected 10% of the land area during 1981-2010.

Hansen is the world’s best known scientist in the climate alarm camp and a leading advocate of aggressive measures to curb fossil-energy use. He and his co-authors are up front about the policy agenda motivating their study. The “notorious variability of local weather and climate from day to day and year to year” is the “great barrier” to “public recognition” of man-made climate change and, thus, to public support for policies requiring “rapid reduction of fossil fuel emissions.” When heat waves or drought strike, the authors want the public to perceive global warming. On Saturday, the Washington Post published an op-ed by Hansen summarizing the study’s results.

Heat waves will become more frequent and severe as the world warms; some areas will become drier, others wetter. Those hypotheses are not controversial.

What the Hansen team concludes, however, is controversial. The researchers contend that the biggest, baddest hot weather extremes of recent years — the 2003 European heat wave, the 2010 Russian heat wave, the 2011 Texas-Oklahoma drought, the ongoing Midwest drought — are a “consequence of global warming” and have “virtually no explanation other than climate change.”

There’s just one small problem. The reseachers do not examine any of those events to assess the relative contributions of natural climate variability and global warming. The study provides no event-specific evidence that the record-setting heat waves or droughts would not have occurred in the absence of warming, or would not have broken records in the absence of warming.  [click to continue…]