Deal delays indirect land-use penalty

By Erin Voegele
Posted June 24, 2009, at 1:26 p.m. CST

House Agriculture Committee Chairman Collin Peterson, D-Minn., House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., and Speaker of the House of Representatives Nancy Pelosi, D-Calif., have struck a deal that could change how the U.S. EPA is directed to consider indirect land-use change in the proposed rulemaking for the second stage of the renewable fuels standard (RFS2).

This change is now reflected in the American Clean Energy and Security Act (ACES), also known as the Waxman-Markey Bill. ACES, which also seeks to establish a federal carbon cap-and-trade program and renewable portfolio standard, is expected to undergo a vote in the U.S. House on June 26.

The deal struck by the three lawmakers would ensure that there is widespread scientific agreement linking biofuels to indirect land-use change before the U.S. EPA could impose such a greenhouse gas penalty on biofuels. The agreement would ultimately ensure that science � not politics � would determine whether the EPA can move forward with the highly controversial theory. Under the agreement, an entity such as the National Academy of Sciences would conduct a study on whether there is a link between biofuels and tropical deforestation. In the meantime, the EPA would be prevented from imposing an indirect land-use penalty on biofuels for at least five years. At the end of the five-year study, the EPA, U.S. DOE, and USDA would need to agree that such a link is present and can be effectively predicted. At that time, Congress would have one year to review the issue before the EPA could move forward.

The American Coalition for Ethanol issued a statement June 24 in support of the agreement, and applauding Peterson for leading the effort to broker the deal. "While we are enormously pleased with this agreement, we recognize that at this stage EPA still proposes to ascribe a carbon penalty to biofuels based upon their disputed computer modeling of unsubstantiated predictions of so-called international land-use changes," said ACE in the statement. "Therefore, ACE calls upon EPA to reconsider their approach and we encourage the U.S. Senate to adopt language similar to the agreement worked out by Chairmen Peterson and Waxman."

Growth Energy CEO Tom Buis has also weighed in on the issue. "We congratulate Chairman Peterson and Chairman Waxman on reaching a common sense solution to this very controversial issue," he said. "We believe that additional study of the issue of indirect land-use change will further demonstrate that these provisions should never have been a part of the 2007 energy law to begin with. Chairman Peterson's steadfast leadership in ensuring an equal playing field for America's homegrown fuel producers was critical to achieving this resolution. This is a good first step in a longer process, including full review by the House and Senate."