D.C. Watch: Water, trade and biofuels are top issues

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The Environmental Protection Agency and the Army Corps of Engineers have posted the proposed rule defining the Waters of the United States under the Clean Water Act to the federal register. Accordingly, the clock is now ticking on a 90-day public comment period that will end July 21. The rule would establish which waters are subject to federal jurisdiction, and there has been a lot of discussion about the rule over the past month. The American Farm Bureau Federation says EPA is attempting to regulate virtually all waters and the rules will impede normal farming operations. The National Farmers Union says the proposal is “ag friendly” because of the exemptions it provides for many ag-related activities. The proposed rule can be found here.

Senator Charles Grassley (R-Iowa) expects the Senate to pass a tax-extender bill within the next two weeks. The bill includes several provisions important for agriculture, including raising the Section 179 farm equipment and machinery deductions and depreciations schedules for 2014 and 2015 to $500,000 and extending 50 percent bonus depreciation through next year. The bill would also extend the biodiesel tax credit and the cellulosic biofuel production tax credit. It is not clear when or if the House of Representatives will take up a similar bill.

President Obama visited several countries in Asia last week, and trying to build momentum for the Trans-Pacific Partnership free trade agreement was on the agenda. Japan’s resistance to opening its agricultural and automobile markets continues to be one of the main obstacles to reaching a deal. However, it is not clear that Congress will agree to trade promotion authority (TPA) even if a deal is reached. Without TPA, an agreement would likely get bogged down in Congress and might never pass.

Brazil has decided to postpone asking the World Trade Organization for a panel to decide if the new U.S. cotton program complies with world trade rules. Brazil has held off imposing sanctions totaling $830 million per year while waiting for Congress to change cotton policies that the WTO ruled did not conform to international trade rules. However, Brazil says it may well request WTO action in the next few months.

The Obama administration has suspended indefinitely any decision about the Keystone XL Pipeline. The State Department says it needs to wait until the routing of the pipeline through Nebraska is settled before making any decision about the pipeline. Nebraska’s Supreme Court is not expected to rule for several months, and there will probably be more legal maneuvering after that. The government review of the proposed pipeline, which would carry crude oil from Canada through Montana, South Dakota and Nebraska, has been underway for five years. The State Department has to make a decision because the pipeline crosses an international border.

A controversial study about cellulosic biofuels was released by the University of Nebraska. The study claims that cellulosic biofuels made from corn residue are worse for global warming than gasoline in the short term. This contradicts an EPA study that found the fuel would qualify as an advanced biofuel by releasing 60 percent less carbon pollution than gasoline. A peer-reviewed study by the Energy Department’s Laboratory in 2012 found that biofuels made with corn residue were 95 percent better than gasoline in greenhouse gas emissions. Critics of the most recent study claim the researchers used unrealistic assumptions about how much corn residue would be removed from the land to use in biofuel production



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