Posted By Cindy January 4, 2012
Corn growers and the grain-based ethanol industry got a late Christmas present last week when a Federal District Court judge in Fresno, California sided with America’s ethanol industry in ruling that the State of California’s Low Carbon Fuel Standard (LCFS) violates the Commerce Clause of the U.S. Constitution and is therefore unconstitutional. The ruling is in response to a suit filed in December 2009 by the Renewable Fuels Association and Growth Energy asserting that the LCFS violates the Commerce Clause by seeking to regulate farming and ethanol production practices in other states.
“This ruling reaffirms our position that the state of California violated the U.S. Constitution when it created a low carbon fuel standard punitive to farmers and ethanol producers outside of the state’s border,” said National Corn Growers Association President Garry Niemeyer. “We hope that this ruling will lead to an inclusive discussion where regulators join other stakeholders to find effective renewable energy solutions.”
The Commerce Clause specifically forbids state laws that discriminate against out-of-state goods and that regulate out-of-state conduct. The original filing notes that “the LCFS imposes excessive burdens on the entire domestic ethanol industry while providing no benefit to Californians. In fact, in disadvantaging low-carbon, domestic ethanol, the LCFS denies the people of California a genuine opportunity to clean their air, create jobs, and strengthen their economic and national security. One state cannot dictate policy for all the others, yet that is precisely what California has aimed to do through a poorly conceived and, frankly, unconstitutional LCFS.”
On this claim the Court found that the LCFS discriminates against out-of-state corn-derived ethanol and impermissibly regulates extraterritorial conduct. As a result, the Court issued an injunction. The judge also ruled that CARB failed to establish that there are no alternative methods to advance its goals of reducing GHG emissions to combat global warming.
The California Air Resources Board (CARB) is expected to automatically appeal the ruling to the U.S. Court of Appeals for the 9th Circuit and the industry is prepared to continue the fight to provide clean corn ethanol for all Americans.
Posted By Cindy January 4, 2012
The two Republican presidential candidates who topped the Iowa Caucus in a virtual dead heat Tuesday night are both considered to be supporters of ethanol, according to the Iowans Fueled with Pride Iowa Caucus Voters Guide.
Both former Governor Mitt Romney and former Senator Rick Santorum expressed their support for the federal renewable fuels standard while campaigning in Iowa. In addition, both candidates were 4-for-4 on other important ethanol issues, including a fair and equitable energy tax policy; the attempt to ban E15; and consumer fueling choice through programs to increase the number flexible fuel vehicles (FFVs)and blender pumps in the nation. The other two candidates who scored well in all those categories were Newt Gingrich and President Obama.
“Despite scant attention on agriculture issues by the national media, both Governor Romney and Senator Santorum prioritized rural and ag issues,” said Iowa Renewable Fuels Association Past President Walt Wendland, CEO of Golden Grain Energy near Mason City. “It came as no surprise to us that friends of ethanol fared well in the Iowa Caucus.”
Ron Paul, Michelle Bachman and Rick Perry all were opposed to the RFS and increasing FFVs and blender pumps, while only Rick Perry was against E15 and a “fair and equitable energy tax policy” that would “create a level playing field for energy taxes” by revising the permanent tax benefits enjoyed by the petroleum industry.
The voter guide was mailed to approximately 10,000 Iowa households with residents who are directly involved in Iowa ethanol refineries and was also promoted to all of Iowa’s 250,000 agricultural households via email, the Internet and social media. An electronic version of the guide can be viewed at: www.IowansFueledwithPride.com.
Posted By Cindy January 3, 2012
2011 was a wild year for farm market prices and ag economists generally expect that to continue into 2012.
“We had a lot of things that came together and pushed prices up for a wide variety of products the last couple of years,” said Patrick Westhoff, Director of the Food and Agricultural Policy Research Institute (FAPRI) during a visit at the St. Louis Agribusiness Club. “We expect a lot of volatility in the year ahead.”
One of the main reasons is an “ordinary garden variety one” – the weather. “People tend to forget that sometimes,” said Westhoff. On top of that, the biggest factors to consider are land markets and what Congress will decide to do with farm policy. No surprises there!
He notes that tight stocks will continue to keep corn prices particularly volatile. “Every little piece of news, either positive or negative, can make the market move around a lot,” Westhoff added.
Westhoff believes that the spending cuts presented to the “super committee” by the House and Senate agriculture leadership should help start the conversation for a new farm bill in 2012, “but it certainly won’t be the end of that conversation.”
Listen to Chuck Zimmerman’s interview with Patrick Westhoff here: Patrick Westhoff Interview
Posted By Cindy January 3, 2012
There’s nothing indirect about the land use changes reported in the most recent summary from USDA, which shows that the only land use in the United States that is declining is cropland.
According to the report, “Major Uses of Land in the United States 2007,” the amount of land in the United States devoted to growing crops declined by 34 million acres – or nearly 8 percent – between 2002 and 2007. At 408 million acres, total cropland was at its lowest level since records were started in 1945.
Cropland accounted for 18 percent of the total land area in the country – the third largest land use behind forest (30%) and grassland (27%) – both of which increased over the same five-year period while cropland declined.
The smallest total use of land in the U.S. is urban, at 61 million or 3 percent. However, while urban land use accounts for the smallest percentage, the USDA report shows that it accounts for the biggest increase in land use, quadrupling between 1945 and 2007, increasing at about twice the rate of population growth over the period. Urban land use increased almost 2 percent from 2002 to 2007.
The report is significant because it shows with actual data that cropland acres declined at the same time ethanol production was increasing – which means no direct or indirect land use change as a result of corn being used for ethanol. Instead, Renewable Fuels Association (RFA) president Bob Dinneen said what the report does show is how farmers are producing more on less land, while urban land uses increase.
“It is ironic that the land use debate has fixated on biofuels, when the actual culprit of land conversion has clearly been urban and suburban sprawl,” Dinneen said. “Subdivisions full of mini-mansions, big box stores, shopping malls, and parking lots are encroaching on productive farmland across the country.”
Read the USDA report here.
