Iowa Agriculture Secretary Bill Northey says he’s concerned about the potential impact of a rule that would expand the way carbon is measured in fuels like corn-based ethanol. Northey has been in Washington, D.C. meeting with other state ag leaders and says they discussed the E.P.A.’s consideration of an "indirect land use" rule that would examine a number of factors in setting carbon numbers for fuels.
Northey says the rule would look at the actual process of corn production, and the processing of the ethanol, from the use of fertilizer, to what it costs to haul the grain around and dry the grain, to the use of the equipment in the fields and in some cases the actual cost of producing the equipment to produce the corn.
Northey says the impact on the ethanol industry could be dramatic. He says he got the impression that using indirect land use would be a nuetral impact at best, and could be negative to ethanol because of the indirect land use numbers adding so much of an additional charge that it "would take away all the gain that ethanol had."
Northey says all the E.P.A. officials he has talked with in Washington indicate they are leaning toward the indirect land use formula. Northey says the impact would come as states like California look at reducing their carbon emmissions. Northey says the state would get a carbon number for gasoline and one for ethanol based on a formula and as they blend the gas , they need to decrease the number. "Right now, if ethanol with indirect land use has a higher number than gasoline, they get a better (carbon) number just using straight gasoline," Northey says.
Northey says while the impact on the ethanol industry would be major, the issue could also impact other corn users. He says other users could get tagged with using the indirect land use carbon numbers in meat production, dairy production and egg production, if there are real efforts to control the amount of carbon in agriculture.
Northey says right now the whole idea adds more uncertainty to an already uncertain future for the ethanol industry. He says things could change as more people weigh in on the carbon idea. Northey says they heard from one of the economists on the house ag committee that "there were real doubts in some circles that blaming ag producers or biofuels production here in the United States for land use changes in other places was sound science at all."
Northey says he expects Congress to weigh in on the issue to as the idea moves forward.