25 June 2009

Its An Energy Tax Its a Dessert Topping Its An Energy Tax

Blogowner's comment:
The first thing that needs to happen is for people to stop calling carbon dioxide a pollutant. How is a substance necessary for life to continue a pollutant?
Trees and all green plants need CO2 to survive. They breathe CO2 and give back oxygen; we breathe oxygen and give back CO2. Almost seems like it was planned that way...DUH!!!!!!!!!!!


No matter how Speaker Nancy Pelosi (D-CA) and Energy & Commerce Committee Chairman Henry Waxman (D-CA) re-arrange the deck chairs, the fact of the matter is that their bill is a huge national energy tax. The so-called “deal” that was struck between Waxman and Agriculture Committee Chairman Collin Peterson (D-MN) is a sham. Hollywood, San Francisco and Boston still get a sweetheart deal at the expense of families, farmers, and small businesses. Here are the facts on the so-called Waxman-Peterson deal.

PART I – USDA, EPA & Agriculture Offsets

Myth #1 – The Waxman-Peterson “deal” on agriculture offsets will allow agriculture to benefit from the legislation.

FACT, Part 1 – Today the nation’s largest organization representing farmers, the U.S. Farm Bureau, voiced continued strong opposition to this misguided legislation, calling it “seriously flawed” and “detrimental to U.S. agriculture.” This influential group with members in all 50 states argues that the bill would “…force agriculture and other productive sectors of our nation’s economy into a position of severe competitive disadvantage with trading partners like China and other nations who will not burden their economies to control carbon emissions.”

FACT, Part 2 – Farmers and ranchers spent $60 billion on fuel, electricity, fertilizer and chemicals in 2008 and for some crops, those energy intensive inputs account for more than 70 percent of production costs. There is no debate that each of those inputs will increase in price under Speaker Pelosi’s national energy tax. An agriculture offset program – no matter if it is administered by USDA or EPA – will allow farmers to recoup a fraction of their increased production costs. The Heritage Foundation recently estimated that farm income would drop $8 billion in 2012 and $50 billion in 2035 and that offsets will make-up for less than 10 percent of this lost income.

FACT, Part 3 – Many farmers will not be able to participate in an offset program, and will simply be stuck with significantly higher energy costs. Some crops like fruits, vegetables, rice, cotton and potatoes are simply not suitable for no-till or other farming practices to sequester CO2 in soil. The start-up costs to purchase the necessary equipment to engage in farming practices potentially eligible for an offset can be cost prohibitive, with some equipment costing more than $1 million. And, a new analysis by EPA projects virtually zero potential for soil sequestration.

Myth #2 – Under the Waxman-Peterson “deal,” the EPA will have no ability to regulate farmers and ranchers.

FACT, Part 1 – According to press reports, Chairman Waxman’s description of the deal is that “we will seek guidance from the Administration to figure out the appropriate role for the EPA.”

FACT, Part 2 – The 1,200-page Waxman-Markey has more than 800 references to the EPA or the EPA Administrator and includes the phrase “the Administrator shall” 274 times. In addition, for just the cap-and-trade section of the bill, the EPA is required to produce more than 60 rulemakings, agency and regulatory actions or reports. In contrast, USDA and “agriculture” appear a total of 12 times. Make no mistake, the EPA is the top cop on the beat.

FACT, Part 3 – The devil is in the details…of which there are very few. Until legislative language is produced and reviewed, it is impossible to determine the true impact of the so-called deal between Chairmen Peterson and Waxman. According to press reports, even the Blue Dog’s are reluctant to support a bill if given very short notice to review it. Rep. Stephanie Herseth Sandlin (D-SD) said the following:

“The coalition is just not going to be ready to vote on this next week, particularly if we don’t get language until Monday,” she told E&E last week. “Because many will insist that we have a number of days to review the language ourselves, to have back and forth with our constituencies and stakeholder groups, to understand how the system with a significant manager's amendment will work. Yes, absolutely, we need to chew on this awhile”

PART II – Indirect Land Use & Biomass Definition

Myth #1 – The Waxman-Peterson “deal” on indirect land use fixes the problem.

FACT – According to press reports, this “deal” simply kicks the can down the road by delaying the rule for five years and having the EPA and USDA jointly study the issue. The legislation Rep. Peterson introduced (H.R. 2409) permanently prohibited EPA from using indirect land use changes in the calculation of lifecycle GHG emissions.

Myth #2 – The Waxman-Peterson “deal” improves the definition of renewable biomass.

FACT – There is no deal. According to press reports, Chairman Peterson “hoped” to have an agreement by the end of the day (Wednesday). This issue – using the language from the 2008 Farm Bill to define biomass – is also included in H.R. 2409.

PART III – Rural Co-ops

Myth #1 – The Waxman-Peterson “deal” protects Rural America from electricity price increases.

FACT, Part 1: Farmers, families, and ranchers in rural America will still pay higher electricity prices. Why? The deal that the Democrats struck with the rural co-ops leaves some states way in the hole. The sham deal leaves many state co-ops still far short of the free permits they will need to comply with the new standards in the bill. Translation: rural America will pay more to comply with the bill.

FACT, Part 2: The Democrats’ backroom deal ties the hands of the co-ops to help offset the costs to their consumers. The few additional free allowances that were given to rural co-ops have strings attached. The money can only be used for efficiency, renewable, or low-income assistance. The local distribution company cannot use these allowances to cover the increase in the electric costs due to carbon permit costs. But these local distribution companies need the permits BECAUSE they face higher electricity costs, but the bill says they are not allowed to use these permits to pay for those costs?

FACT, Part 3: Although the bill made marginal improvements by prohibiting “excess distributions,” the deal simply means that states like California and Washington don’t actually make excessive profits on this provision. This Waxman-Peterson deal still means consumers in most of rural America will end up paying more for electricity.

Myth #2 – The Waxman-Peterson “deal” protects consumers and small business from electricity price increases.

FACT: Residential or commercial customers who use a lot of electricity, such as groceries or convenience stores, could be especially harmed by the Democrat deal. The deal now provides for industrial customers to receive allowance value based on the quantity of electricity they purchase and to reduce costs for them. However, utilities are NOT required to reduce costs to residential or commercial customers - the bill only requires that the allocations should be used for the benefit of ratepayers, and specifically prohibits rebates based on the amount of electricity they buy.

Myth #3 – Free allowances to the electricity sector are equitable.

FACT: The bill still distributes allowances to LDCs based 50 percent on emissions and 50 percent on retail sales. This is unprecedented. The much-touted acid rain permit program, for example, allocates permits solely on the basis of emissions. The Waxman-Peterson deal means that states with higher CO2 emissions are penalized. None of the changes they made in the bill remedy that inequity.

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