WASHINGTON DC UPDATE: SUMMER 2014

Now that we have officially entered summer and the longest day of the year is behind us, let’s take a look at three important aspects of life in Washington DC; legislation, regulation, and the politics which influence them, and how these all will impact corn farmers going forward.

For starters, the legislative calendar for the rest of this summer and the rest of this Congress appears to be quite short. While there are ongoing concerns with regards to the ability of Congress to reach a deal on several important appropriations/spending bills that would fund the government through the end of the year, it is largely expected that deals will ultimately be reached and we will avoid the fiscal impasses that we’ve seen in other recent years.

The regulatory calendar, in contrast, looks to be jam packed with activity and the expectation is that the last two years of the Obama Administration will see a level of regulatory activity unseen in many years. Most notably, the White House unveiled its first major regulatory action on greenhouse gas emissions on June 2nd, which is its first major attempt to regulate emissions from stationary sources, primarily those emanating from power plants. Coal-fired power plants look to receive the biggest burden from this proposed regulation, which, if implemented in a timely fashion, will not likely take effect until the middle of 2016, shortly before President Obama leaves office. This initial phase of regulatory activity will focus on the largest stationary emitters of carbon dioxide, but subsequent phases will address mobile sources, such as emissions from automobiles. That, however, is not expected to take effect under the Obama Administration and will be unveiled by a future White House; assuming Democrats retain the White House in 2016.

IL CORN PLUGGED INSimultaneously, agricultural, biofuel and oil and gas stakeholders are anxiously awaiting the release of a proposed rule from the Environmental Protection Agency (EPA), which many expect will dramatically decrease the renewable volumetric obligations for renewable fuels, and specifically, for corn-based ethanol. The Illinois Corn Growers Association has been working to engage the Administration on this rule and has offered recommendations and suggestions that we feel would help everyone as this process to revise the Renewable Fuel Standard moves forward.

All of this, of course, is heavily influenced by the political undertones of an election year, a big mid-term election which could see the control of the Senate switch, the loss of a number of senior lawmakers of both parties, and a primary calendar rife with risk for legislators of both political parties. In the last two weeks, we’ve seen the House Majority Leader, Eric Cantor, defeated by a Tea-Party backed challenger, the first House Majority Leader to have ever been defeated since the creation of the position. Voters go to the polls today in Mississippi, where Senator Thad Cochran (R-MS), the Ranking Member on the Senate Agriculture Committee, is in the political battle of his life, facing off against state Sen. Chris McDaniel, also backed by the Tea Party. Recent polling has shown Cochran trailing. To say that this type of political atmosphere makes politicians of both parties incredibly nervous is an understatement.

What this means; however, is that the next several months will provide legislators an opportunity to weigh in with the Administration and its regulators on a variety of regulatory concerns. Conservative legislators in difficult primaries will likely move even farther to the right in criticizing Administration policies and vulnerable Democratic legislators may openly question or criticize proposed Administration activities which they deem unhelpful to their Congressional district or state. Given this, Illinois corn farmers should continue to be strong advocates for biofuels, inland waterways infrastructure investment and sensible regulatory frameworks as they meet with their legislators in Congress. Political support from us is also timely and appreciated by Illinois legislators, especially by those who face a difficult re-election in November. It will be an interesting summer.

David-Beaudreau_175x420David Beaudreau
DC Legislative and Regulatory Services

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