By Dan Mauer and Will Stafford, CHS Washington representatives
This has been a busy year for CHS Government Affairs as we continue to navigate the changes that stem from one party taking control of the House of Representatives, Senate and White House.
This year is especially dynamic due to Democrats holding slim majorities in both the House and Senate. Combined with a polarized environment, that makes for a messy legislative process. The regulatory changes that come with the White House changing political hands has added to the turbulence as the Biden administration rewrites rules adopted during the Trump years.
Regardless of the challenges, numerous issues in play are important to CHS and its farmer-owners. Here’s an update on some of those issues and how CHS is positioning itself to take advantage of the opportunities in Washington to support cooperatives and agriculture.
Climate control policy under a new administration
With the Biden administration and Congress continuing to focus most policy decisions on climate change, the goal to minimize and eventually eliminate greenhouse gas emissions is front and center in the nation’s capital and we expect it to likely stay there for the foreseeable future.
Due to its varied energy interests, CHS has an important role to play in contributing to that debate. One place where CHS has been particularly vocal is in the negotiations surrounding a potential infrastructure package. Earlier this year, the administration proposed around $2.3 trillion in spending for traditional infrastructure projects like roads, bridges, inland waterways and broadband. CHS was somewhat dismayed to see that none of those funds were earmarked for biofuels or biofuel producers.
Since ethanol is a proven way to significantly lower carbon emissions from the transportation sector, it would seem logical for the government to promote its use. After many conversations with members and staff of the U.S. House and Senate, the CHS team was delighted to find that others agreed with our view and pledged to help ensure biofuels were included in any infrastructure package that makes its way through Congress.
As of mid-August, there was no language in the bill that would direct funding to ethanol or biofuels, but there are a number of amendments we hope will be accepted. They cover things like funding for ethanol blender pumps, a permanent Reid vapor pressure waiver and a tax credit for sale or blending of certain fuels containing ethanol. If the Senate doesn’t include funding for ethanol or biofuels in the bill, the House could add those items as it considers the legislation.
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Carbon policy and ag
Smart climate practices continue to be a focus in the House and Senate Agriculture committees. Earlier this summer, the Senate passed the Growing Climate Solutions Act by an overwhelming vote of 92-8. The legislation, which is supported by CHS, was introduced by Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.) and Senator Mike Braun (R-Ind.). It would instruct USDA to set up a greenhouse gas technical assistance provider and third-party verifier certification program to help farmers, ranchers and foresters participate in carbon credit trading markets.
The program would provide a USDA stamp of approval for qualified providers of technical assistance and verifiers that help landowners adopt voluntary practices that allow them to earn carbon credits, which can be sold in carbon markets. The bill also would direct USDA to establish an advisory council to assist with program implementation and recommend best practices. At least half of the council’s members would need to be farmers, ranchers or private forest owners.
A companion bill has been introduced in the House by Representatives Abigail Spanberger (D-Va.) and Don Bacon (R-Neb.), but so far there has been no movement on the legislation by the House Agriculture Committee Chair David Scott (D-Ga.). Scott is staying quiet on when and how the bill may move in the House. He will need to find a way to gain support from more progressive Democrats, who may want to see the bill do more to address climate change. It is also possible the House could end up simply passing the Senate’s language in a year-end omnibus package or similar vehicle.
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Renewable Fuel Policy regulation
A significant policy area we’ve spent considerable time on is the Renewable Fuel Standard (RFS) — specifically how CHS complies with the law.
The primary way refiners demonstrate compliance with the RFS is by accumulating and retiring renewable identification numbers (RINs). RINs show the federal government that an obligated party has either blended enough fuel to meet its obligation or has purchased enough RINs to cover the difference between what they were able to blend and what was mandated by the government. RINs are traded daily and prices fluctuate based on supply and demand.
Prior to the COVID-19 pandemic, RINs traditionally traded somewhere in the range of $0.10 to $0.30 and represented a significant, yet manageable, expense for CHS refineries. Today, RINs are trading at around $1.70 and recently touched an all-time high of more than $2.00. As a company that operates refineries to serve our owners’ gasoline and diesel demands, we consider RINs to be part of our cost of production and, at today’s values, RINs have become one of the larger expenses in meeting our owners’ energy needs.
Unfortunately, due to the complicated nature of the RIN system, there are no quick fixes to help alleviate the inflated cost of RINs, but we are doing everything we can to educate policymakers on the topic, highlighting the financial stress RINs are putting on refiners throughout the country.
Rural broadband internet
Another issue we have been advocating for during infrastructure talks is funding to build out broadband connections in rural America. While this need has received broad bipartisan support from the beginning, nothing in Washington is over until it’s over.
Additional dollars are desperately needed to do two things:
- improve the nation’s broadband internet mapping data to better understand the challenges faced and
- eliminate the digital divide by sending resources where they will most effectively bridge the broadband gap.
The latest proposals seem to indicate broadband could receive about $65 billion in funding, but details are murky on how much of that would go to building access in rural areas of the country.
Check out the full Summer 2021 issue of C magazine with this article and more.
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The CHS Government Affairs team will continue to advocate for agriculture and cooperatives on these and other critical issues as we raise our voices on behalf of our owners.
