By ANN HINCH
Assistant Editor

WASHINGTON, D.C. — When it comes to greenhouse gas (GHG) regulation in the United States, a major concern from the agricultural sector is: How can we make federal regulation work for farming and ranching?

Since the U.S. Environmental Protection Agency’s (EPA) announcement Dec. 8 that it determined “six greenhouse gases taken in combination endanger both the public health and the public welfare of current and future generations,” there has been speculation as to what this means financially for the auto industry, power plants and other GHG emitters and their consumers.

The EPA rule specifically “finds that the combined emissions of these greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas air pollution that endangers public health and welfare” under the Clean Air Act (CAA). Some observers feel it’s only preliminary to the EPA regulating stationary sources of EPA-cited GHG emissions: factories, coal plants, other industrial – and farms.

“It does start a trigger regulation,” said Tamara Thies, chief environmental counsel for the National Cattlemen’s Beef Assoc. (NCBA).

First, she said, EPA rules that GHG are adverse to health and welfare (the specific gases are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride). Then, under the CAA, by law, these must be regulated – as with proposed emissions and fuel economy standards for light duty vehicles, rumored to take effect in the spring.

Once those standards are in place, Thies said the EPA is likely to make standards for stationary emitters. But if these are already governed by law – say, cap-and-trade or similar federal legislation – the EPA won’t have to make those rules.

She said the Obama administration has used potential EPA rulemaking as “a stick” to prod Congress to act on cap-and-trade.
“Either you do it, or else” is the message, she said. “And this is the ‘or else’ time.”

“It just opens up the opportunity for (EPA) to expand their regulatory authority over farms,” added Darrin Ihnen, president of the National Corn Growers Assoc. (NCGA) and a South Dakota farmer.

He doesn’t know how the EPA could oversee so many individuals, but believes the agency “seems to want to get regulating down to the farm level” nonetheless. It’s another layer of rules farmers don’t want to deal with, he said, and there is concern about how EPA rules may conflict with best management practices for farms.
Thies said under the CAA, those who emit at least 250 tons of recognized pollutants per year (TPY) are subject to regulation. She said this amount “is almost nothing” and could be attributed to even small emitters.

While she said the EPA has proposed concentrating on 25,000-plus TPY emitters, it’s debatable if this is legal, since the CAA – already law – specifically states 250 TPY. But even if the EPA starts with larger emitters, she agreed with Ihnen in that “their vision is to go after everybody.

“It really must be done by statute,” Thies said. “It must be a law by Congress to change the Clean Air Act.”

Cap-and-trade legislation that the U.S. House has passed and the Senate is considering would put the USDA in charge of farm regulations and carbon trades.

“We’re used to working with them,” Ihnen pointed out. “Most farmers don’t trust the EPA because they don’t understand our business.”

“Regulation is going to happen; it may take time, but it will happen,” agreed Dennis Nuxoll, director of federal policy and government relations for the American Farmland Trust (AFT).

Of the EPA rule, he said, “we’re actually not surprised by it.” He noted if some farmers think they can simply wait out a Democrat administration for this to pass, he would remind them the current effort actually began under former President George W. Bush.
The AFT is focused on finding ways to “minimize costs and maximize opportunities” for farmland owners. One proposal under cap-and-trade is the “trade” portion – which might better be called “sell.” In a carbon offset market, those who sequester GHG and don’t emit much would basically sell their right to emit to larger polluters; the idea is to keep the sum total of emissions the same.
“If producers really sat down and looked at the whole playing field, that’s the conclusion they’d come to,” he said.

“We think legislatively, you have the ability to lower costs for compliance, and create opportunities,” he added, whereas federal regulation by itself has a “very blunt” punitive effect.

Nuxoll is hopeful Congress will pass climate change legislation before the EPA issues regulations in its stead, even if it’s not in 2009. Recently, he heard Congress ranks cap-and-trade third in its priorities, behind health care reform and regulation of financial markets.

Controversial legislation
Thies isn’t as hopeful. She said senators are a long way from a consensus of 60 to oppose a possible filibuster on cap-and-trade, and Congress will likely carry its health care debate into the new year.

She said if climate change is taken up again in 2010, it will be difficult to pass such controversial legislation in an election year – especially one expected to raise the cost of producing energy, which would likely be passed on to customers. Agriculture is an energy-intensive industry. And growing corn is more energy-intensive than, say, raising soybeans, Ihnen added – thus, some the NCGA’s interest in last week’s EPA ruling.

Also, “what we’re concerned about is regulation (of farms) as minor sources (of emissions), from the state level,” Thies said of the NCBA.

Livestock producers worry this will be an invitation to activist lawsuits aimed at shutting down food-animal operations, trying to use this EPA rule to prove they are bad for the environment. While Thies said the EPA found agriculture only emits 6 percent of human-controlled GHG in the United States, the United Nations cites ag worldwide for 18 percent of global human GHG, because of deforestation.

“Well, obviously that is not happening in America,” she said.
The larger concern, she said, is the CAA being used to regulate GHG, a purpose for which Thies does not believe the 1970 act was ever intended. Nonetheless, in a 2007 U.S. Supreme Court case decision, the court directed the EPA to use the CAA to evaluate and regulate GHG.

She also questions human involvement in producing enough GHG for global warming and believes it would be prudent for the EPA to reexamine its data more closely in light of last month’s news about hacked e-mails among scientists at the Climate Research Unit of the University of East Anglia.