Jeremy Alford

State officials lining up against energy policy

by Jeremy Alford

One after another, Louisiana’s statewide elected officials are taking strong stances against President Barack Obama’s proposed energy plan that would, as proposed, reduce the pollution counts connected to global warming and increase the nation’s reliance on cleaner energies. Gov. Bobby Jindal, for one, says that the so-called cap and trade bill “punishes the American energy industry.”

The bill has already passed the U.S. House and is pending action in the Senate. The American Clean Energy and Security Act would create a market-based cap-and-trade system under which industries and utilities would buy carbon “allowances” from the federal government.

Businesses and utilities that reduce their carbon output below the cap would then be able to sell their extra allowances to businesses that exceed the cap.

The White House argues that the legislation would create million of green jobs and move the nation toward developing more fuel-efficient vehicles and using renewable sources like wind, solar, ethanol, hydroelectricity, nuclear and others. Inversely, that would also mean moving the nation away from Louisiana staples such as oil and gas, as well as other fossil fuels like coal.

Last week, state Agriculture Commissioner Mike Strain joined Jindal in expressing concern over the concept. More specifically, Strain says cap and trade “is not favorable for Louisiana or the national agriculture economic sector.” In a policy paper, he argued that cap and trade is in essence a tax on fossil fuels that will artificially increase the cost of energy and manufactured products. In turn, he added that such a “tax” would change private and corporate behavior. “Louisiana farmers will be subject to caps because of the nature of their crops and the limits set by the federal government,” Strain says. “Our dairy and cattle operations as well as rice production will all be affected.”

Of particular concern to state cattle operations is enteric fermentation, he says, which is included in the greenhouse gas limit portion of the bill and accounts for 20 percent of the total limit on agricultural emissions. “A proposed solution to reduce enteric fermentation is to alter the animals’ diets and receive credits for diet-induced reductions. That implies that some farmers would be able to sell credits to heavy greenhouse gas emitting industries for a profit,” says Strain. “In reality, this creates an environment where many entities, not just farmers, will be in competition to sell their credits, but will ultimately lower the overall pool of funds available to farmers who may or may not have a chance to offset the added costs.”

He says that’s just one reason why “the legislation represents a net increased cost to the agricultural community and places Louisiana and United States agriculture at a disadvantage from a global trading standpoint.” Strain says he would support a voluntary approach that allows agricultural producers to reduce greenhouse gases through a variety of methods.