Peterson taking a stand for biofuels

WASHINGTON - Collin Peterson, Minnesota's outspoken farm country congressman, is kicking up dust in Congress this month with his threats to obstruct a key climate change bill over concerns that the government is undermining farmers -- particularly in the ethanol industry.

While the issue is new, however, Peterson says the challenge is familiar. "We have a big problem in agriculture not being able to explain to city people what we're doing," said the Detroit Lakes Democrat.

Peterson, chairman of the House Agriculture Committee, has taken Democratic leadership to task over a sweeping piece of legislation that would create a "cap and trade" system for regulating carbon emissions -- converting the right to release emissions into a limited commodity to be distributed by the government and traded among companies.

He threatened to kill the bill last month after the Environmental Protection Agency (EPA) proposed a rule that would increase ethanol's calculated carbon footprint, a change he insists could be fatal for the ethanol industry. Since then he has become one of the most vocal opponents of the legislation, emphasizing that agriculture would be harmed by inevitably higher fuel costs.

"Merging the climate change goals and the energy independence goals are potentially working at cross-purposes if we do this wrong," said Peterson, who represents the fourth-largest ethanol-producing state in the country.

It is far from the first time the 10-term veteran has bucked his party in Congress. A member of the Blue Dog faction of fiscally conservative Democrats, he was one of only 11 Democrats to vote against President Obama's stimulus spending package in January.

As a moderate Democrat from a Republican-leaning district, Peterson has clout with Democratic leaders. His concerns have caught the ear of House Speaker Nancy Pelosi, who has been meeting with Peterson and others to try to strike a deal and advance the legislation, a cornerstone of her agenda.

His deepest concern has been with the EPA's plan to include "indirect land use" when calculating the carbon footprint of ethanol and other biofuels. It would mean that a corn ethanol producer would also be held responsible for the footprint -- or emissions -- caused by another farmer, American or foreign, who would in theory grow additional corn for food to replace corn going into ethanol. The result: Corn ethanol, once thought to reduce total emissions by about 60 percent compared with an equivalent amount of fossil fuel, would barely qualify as a renewable resource -- possibly translating to major financial losses if gasoline producers no longer blended in corn ethanol to meet federal renewable fuel mandates.

"This is why a lot of us on this committee do not want the EPA near our farms," Peterson told Secretary of Agriculture Tom Vilsack on Thursday at an Agriculture Committee meeting.

Peterson has introduced a bill to limit the EPA's authority over biofuels and remove indirect land use as a factor. He would like to see that measure en route to passage before he'll support cap and trade legislation. But some environmentalists don't like the idea.

"I think we have direct evidence that if you don't do this right, then biofuel demand can be a driver of deforestation around the world," said Dan Lashoff, senior scientist at the Natural Resources Defense Council.

Peterson's stance drew the ire of the New York Times last month, which editorialized that he "is furious that the Environmental Protection Agency is doing its job."

He admits that corn is not an ideal source for ethanol production, but said ethanol companies' efforts to move to more efficient sources such as cellulose would be stunted if the recent proposals in Washington harmed the industry.

Kerry Nixon, general manager of the Central MN Ethanol Co-op, which produces about 21 million gallons of ethanol per year, agrees. Nixon, whose co-op is working to build a cellulosic plant using wood to make ethanol, said future improvements rely on the profitability of corn ethanol.

"If you have a robust corn ethanol [plant], then that same private and cooperative-type investment will continue into the second generation -- into cellulose -- whether it be wood or grasses or whatever," Nixon said.

Rep. Tim Walz, a fellow Minnesota Democrat on the Agriculture Committee, said last week that he approved of Peterson's efforts.

"What he's trying to do is craft a bill that makes sense, that's fair," Walz said, "and that has long-range potential to do exactly what it's supposed to do: reduce greenhouse gases by making us energy independent and a stronger economy."