Nelson says Congress responsible for cutting greenhouse gas emissions
Sen. Ben Nelson, D-Neb., says Congress, not the Environmental Protection Agency, needs to regulate greenhouse gas emissions.
By Robert Pore, The Grand Island Independent
Sen. Ben Nelson, D-Neb., says Congress, not the Environmental Protection Agency, needs to regulate greenhouse gas emissions.
"It seems most people want to cut down on greenhouse gases so we can protect the Earth's atmosphere and boost our energy independence," Nelson wrote in his weekly column. "Many members of Congress are working on ideas and seeking support to do that in various energy bills being written and debated right now."
According to Nebraskans he has heard from on the subject, there's concern if EPA takes a regulatory approach to controlling greenhouse gases.
Nelson said he is part of a bipartisan resolution of disapproval of the EPA taking a regulatory approach.
"Some critics have said that we are attacking the science examining changes in the climate. Some other critics say we are trying to undo the Clean Air Act," Nelson said. "Neither is the least bit true. We simply seek to stop an EPA overreach on regulating greenhouse gases."
"Some critics have said that we are attacking the science examining changes in the climate. Some other critics say we are trying to undo the Clean Air Act," Nelson said. "Neither is the least bit true. We simply seek to stop an EPA overreach on regulating greenhouse gases."
Nelson said he would like Congress to address cutting greenhouse emissions through a comprehensive energy bill that promotes efficiencies and renewable energy.
"We should encourage innovation and new technology that will help our state's economy as we clean up the air," he said.
Nelson said he's "very concerned about the impact on Nebraska if EPA moves ahead."
He said EPA regulations would amount to "a government-directed mandate that would hike energy prices in Nebraska."
He said EPA regulations would amount to "a government-directed mandate that would hike energy prices in Nebraska."
"That burden would fall squarely on the shoulders of Nebraska families, farmers and businesses," Nelson said.
Nebraska ag organizations that support the bipartisan approach to halt EPA's regulatory approach to greenhouse gas emissions include Nebraska Cattlemen, Nebraska Corn Growers Association, Nebraska Dry Bean Growers Association, Nebraska Soybean Association, Nebraska Wheat Board and the Nebraska Wheat Growers Association.
But while Nelson is concerned what EPA greenhouse gas emissions could do to energy prices, the Institute for Agriculture and Trade Policy (IATP) said the Commodity Futures Trading Commission (CFTC) should act immediately to limit excessive speculation by Wall Street firms on energy derivatives trade, a move that will help address extreme volatility in both energy and agricultural markets.
According to IATP, the CFTC is accepting comments until April 26 on a proposed rule that would establish position limits on energy derivative contracts, which include specified crude oil, natural gas, heating oil and gasoline contracts.
IATP said position limits reduce speculation by limiting the number of derivative contracts that any one entity can hold for a contract period. Because other commodities are position-limited, the energy position exemption is colloquially known as the "Enron Loophole."
While the proposed rule applies strictly to energy derivative contracts, IATP said it will indirectly affect agriculture commodities as well.
"Commodity index funds bundle together nonagricultural and agricultural contracts, with the energy component being as much as two-thirds of the fund formula," according to IATP. "Spikes and drops in energy derivative prices have roiled the much smaller agricultural contract component. In 2006"2008, index funds held about a third of all agricultural futures contracts."
"The lack of energy trade position limits has exacerbated excessive speculation and price volatility in agricultural futures contracts," said Steve Suppan of IATP. "Excessive speculation has hurt U.S. agriculture by undermining the original purpose of commodity exchanges " to help commodity sellers and buyers manage price risk. Agricultural price spikes and volatility in U.S. markets have contributed to increased hunger in many of the two-thirds of developing countries that are food import dependent and that rely on U.S. markets for predictable purchase prices."
Suppan said trading energy contracts with no position limits has brought on unwarranted price increases and volatility in heating oil, gasoline and other retail and wholesale energy products.
He said several loopholes, combined with a lack of effective enforcement, allowed excessive speculation to be a major factor in steep food price increases in late 2007 to early 2008. Commodity prices collapsed an aggregate of 60 percent between June and November 2008 as the insolvency of major investors, including index fund dealers, led to U.S. bailouts of Wall Street firms.
Suppan said the financial services industry is lobbying for the CFTC to hold off implementing the new rule until Congress passes financial reform legislation that the industry is fighting. The industry also argues that if the CFTC implements tight position limits, investors will simply move their trades to less-regulated or unregulated markets elsewhere.
"In the case of both agriculture and energy, our markets continue to be highly vulnerable to the actions of Wall Street speculators," Suppan said. "We need the CFTC to act now, and set a strong regulatory standard for other countries to follow around the world. We don't want a repeat of 2008, when prices were so volatile that U.S. grain elevators couldn't hedge their own risks on commodity exchanges and some refused to buy farmers' grain in advance, leading to a cash-flow crisis on many farms."
A group of agriculture and rural groups, including Nebraska's Center for Rural Affairs, is defending EPA's ability to enforce the Clean Air Act and regulate greenhouse gas emissions.
"Agriculture and rural communities are particularly vulnerable to the effects of climate change," said Jim Kleinschmit of the Institute for Agriculture and Trade Policy. "From droughts to floods to temperature extremes, climate change puts farmers' livelihoods at risk and threatens the security of our nation's food supply."
The ag and rural coalition said the EPA has stated it will tailor new greenhouse gas emission rules to target large emitters, and exempt small carbon emitters. This approach would exclude most farms and ranches, while holding accountable large emitters who have long been subject to EPA standards for other forms of pollution.
"Support for Senator's Murkowski's resolution to block EPA regulation of greenhouse gases would be a vote against the health and security of our nation's farms and of the livelihoods of our farmers," the letter said. "Fears that farmers and ranchers would be unduly burdened by these regulations that appear to not only be short-sighted, but incorrect."
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