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Friday, August 23, 2013

Regulation of Fertilizers: Ammonium Nitrate and Anhydrous Ammonia

Dana A. Shea
Specialist in Science and Technology Policy

Linda-Jo Schierow
Specialist in Environmental Policy

Scott D. Szymendera
Analyst in Disability Policy

The explosion on April 17, 2013, at the West Fertilizer Company fertilizer distribution facility in West, TX, has led to questions about the oversight and regulation of agricultural fertilizer. Facilities holding chemicals must comply with regulations attempting to ensure occupational safety, environmental protection, and homeland security. In addition to federal regulation requiring reporting and planning for ammonium nitrate and anhydrous ammonia, most state and some local governments have laws and regulations regarding the handling of either or both of these chemicals.

The West Fertilizer Company possessed a variety of agricultural chemicals at its retail facility, but policy interest has focused on two chemicals: ammonium nitrate and anhydrous ammonia. Ammonium nitrate is a solid that can be used as a fertilizer, a use that generally occurs without incident. In combination with a fuel source and certain conditions, such as added heat or shock, confinement, or contamination, ammonium nitrate can pose an explosion hazard. Such accidents have rarely occurred, but have historically had high impacts. For example, the ammonium nitrate explosion in 1947 in Texas City, TX, where two ships carrying ammonium nitrate coated in wax and stored in paper bags caught fire and exploded, destroyed the entire dock area, including numerous oil tanks, dwellings, and business buildings. The bomb used in 1995 to attack the Murrah Federal Building in Oklahoma City, OK, contained ammonium nitrate as a component of its explosives.

Anhydrous ammonia has a variety of uses, including as an agricultural fertilizer. Many agricultural retailers store and use anhydrous ammonia. In contrast with ammonium nitrate, anhydrous ammonia is a gas more generally viewed as a threat from its inhalation toxicity. It is regulated to prevent release of the chemical into the atmosphere where it might travel as a cloud and impact workers and the surrounding environment.

Various federal, state, and local agencies collect mission-relevant information about chemical holdings. The West facility reportedly had not complied with all relevant and applicable regulatory requirements. For example, the facility reportedly had not contacted the Department of Homeland Security (DHS), which should have received information about any ammonium nitrate or anhydrous ammonia stored at the facility. The extent to which agencies shared relevant information about chemical holdings in order to enable effective regulatory oversight is still unresolved.

As congressional policymakers consider the ramifications of the explosion in West, TX, they may face several policy issues. These policy issues include the:

• challenges arising from relying on reporting of chemical inventories by regulated facilities;

• potential for omission and duplication in existing regulatory reporting;

• long intervals between inspections at many such facilities;

• ability of federal, state, and local government agencies to share information effectively among themselves; and

• public and first-responder access to regulatory information.

Date of Report: July 31, 2013
Number of Pages: 21
Order Number: R43070
Price: $29.95

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Friday, August 9, 2013

Country-of-Origin Labeling for Foods and the WTO Trade Dispute on Meat Labeling

Remy Jurenas
Specialist in Agricultural Policy

Joel L. Greene
Analyst in Agricultural Policy

Most retail food stores are now required to inform consumers about the country of origin of fresh fruits and vegetables, fish, shellfish, peanuts, pecans, macadamia nuts, ginseng, and ground and muscle cuts of beef, pork, lamb, chicken, and goat. The rules are required by the 2002 farm bill (P.L. 107-171) as amended by the 2008 farm bill (P.L. 110-246). Other U.S. laws have required such labeling, but only for imported food products already pre-packaged for consumers. The final rule to implement country-of-origin labeling (COOL) took effect on March 16, 2009.

Both the authorization and implementation of COOL by the U.S. Department of Agriculture (USDA) have been controversial, particularly for the labeling rules for meat and meat products. A number of livestock and food industry groups continue to oppose COOL as costly and unnecessary. They and the main livestock exporters to the United States—Canada and Mexico— view the requirement as trade-distorting. Others, including some cattle and consumer groups, maintain that Americans want and deserve to know the origin of their foods, and point out that many U.S. trading partners have labeling laws.

Less than one year after the COOL rules took effect, Canada and Mexico challenged them in the World Trade Organization (WTO), arguing that COOL has a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments agreed to by the United States. In November 2011, the WTO dispute settlement (DS) panel found that (1) COOL treats imported livestock less favorably than like U.S. livestock (particularly in the labeling of beef and pork muscle cuts), and (2) COOL does not meet its objective to provide complete information to consumers on the origin of meat products.

In March 2012, the United States appealed the WTO ruling. In June 2012 the WTO’s Appellate Body (AB) upheld the DS panel’s finding that the COOL measure treats imported Canadian cattle and hogs, and imported Mexican cattle, less favorably than like domestic livestock. But the AB reversed the finding that COOL does not fulfill its legitimate objective to provide consumers with information on origin. The Obama Administration welcomed the AB’s affirmation of the U.S. right to adopt labeling requirements to inform consumers on the origin of the meat they purchase. Participants in the U.S. livestock sector had mixed reactions, reflecting the heated debate on COOL that has occurred over the last decade.

This case entered the compliance phase when the WTO’s Dispute Settlement Body (DSB) adopted the AB and DS panel reports on July 23, 2012. A WTO arbitrator set a deadline of May 23, 2013, for the United States to comply with the WTO findings. On May 23, 2013, USDA issued a final rule to modify how muscle cuts of meat are to be labeled in order to comply with the WTO’s findings that current COOL labeling requirements discriminate against imported livestock. The final rule requires that labels show where each production step (i.e., born, raised, slaughtered) occurs and prohibits commingling of muscle cuts of meat from different origins.

COOL’s supporters have applauded the final rule for providing consumers with specific and more useful information on origin. Domestic opponents decried the rule, arguing that it is more discriminatory than the previous rule and imposes additional record-keeping burdens on processors and retailers, and in turn, additional costs on consumers. Canada and Mexico have expressed disappointment with the rule, and argue that it does not bring the United States into compliance with its WTO obligations. Canada and Mexico have stated that all options will be considered, including retaliation. All parties have agreed on the procedures for the next steps of the compliance phase. However, Canada and Mexico have not yet requested the formation of a compliance panel to determine if the final COOL rule complies with U.S. WTO obligations.

Date of Report: July 22, 2013
Number of Pages: 49
Order Number: RS22955
Price: $29.95

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Wednesday, August 7, 2013

The 2013 Farm Bill: A Comparison of the Senate-Passed (S. 954) and House-Passed (H.R. 2642) Bills with Current Law

Ralph M. Chite, Coordinator
Section Research Manager

Congress periodically establishes agricultural and food policy in an omnibus farm bill. The 113th Congress faces reauthorization of the current five-year farm bill (the Food, Conservation, and Energy Act of 2008, P.L. 110-246), since many of its provisions expire in 2013. The 2008 farm bill originally expired in 2012, but the 112th Congress did not complete action on a new farm bill and instead extended most authorities and funding for one additional year in the American Taxpayer Relief Act of 2012 (the fiscal cliff bill, P.L. 112-240). The 2008 farm bill contains titles that cover farm commodity support, horticulture, livestock, conservation, nutrition assistance, international trade and food aid, agricultural research, farm credit, rural development, bioenergy, and forestry.

The Senate Agriculture Committee approved its version of an omnibus 2013 farm bill (S. 954, the Agriculture Reform, Food, and Jobs Act of 2013) by a vote of 15-5 on May 14, 2013. The next day, the House Agriculture Committee conducted markup of its own version of the farm bill (H.R. 1947, the Federal Agriculture Reform and Risk Management Act of 2013) and approved the amended bill by a vote of 36-10. Floor action on the Senate bill began during the week of May 20, 2013, and was completed on June 10, 2013, when the full Senate approved the bill by a vote of 66-27. The full House considered H.R. 1947 during the week of June 17 and adopted numerous amendments before defeating the amended bill on June 20 by a vote of 195-234. Three weeks later, the full House debated a variation of the defeated bill that excluded a Nutrition title but included all of the adopted floor amendments to all of the other titles. This revised bill (H.R. 2642) was approved by the House by a 216-208 vote. Conference on the two measures is pending.

Within the various titles of S. 954 and H.R. 2642, as passed by their respective chambers, are provisions that would reshape the structure of farm commodity support, expand crop insurance coverage, consolidate conservation programs and extend authority to appropriate funds for many U.S. Department of Agriculture (USDA) discretionary programs through FY2018. Both bills would eliminate direct payments to farmers, and revise (and rename) counter-cyclical price and revenue support programs. S. 954 reauthorizes and revises the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), while H.R. 2642 contains no SNAP provisions. H.R. 2642 terminates permanent law that for many years has served as a fallback for the farm commodity support programs if current authorities were allowed to expire, and instead makes the farm commodity support authorities in H.R. 2642 the new permanent law.

The Congressional Budget Office (CBO) projects that if the mandatory programs of the 2008 farm bill were to continue, they would cost $973 billion over the next 10 years (FY2014- FY2023). If enacted, the Senate-passed farm bill (S. 954) would reduce this baseline by $17.9 billion (-1.8%) over 10 years, of which $13.9 billion is attributed to agricultural programs and $4 billion to nutrition programs. The House-passed bill (H.R. 2642), which does not have a nutrition title, would reduce the agriculture portion of the baseline by $12.9 billion (-6.2%). An earlier House Agriculture committee-reported bill, H.R. 1947, which failed on the House floor in June, would have reduced the nutrition title baseline by $20.5 billion over 10 years, more than the $4 billion nutrition reduction in S. 954.

This report provides a side-by-side comparison of every provision in the House–passed (H.R. 2642) and Senate-passed (S. 954) 2013 farm bills with each other and with current law or policy. The Appendix compares the Nutrition titles of S. 954 and H.R. 1947 as amended and defeated.

Date of Report: July 19, 2013
Number of Pages: 188
Order Number: R43076
Price: $29.95

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Monday, August 5, 2013

Is Biopower Carbon Neutral?

Kelsi Bracmort
Specialist in Agricultural Conservation and Natural Resources Policy

Congress has expressed interest in biopower—electricity generated from biomass. Biopower, a baseload power source, has the potential to strengthen rural economies, enhance energy security, and improve the environment, proponents say. Biopower could be produced from a large range of biomass feedstocks nationwide (e.g., urban, agricultural, and forestry wastes and residues). One challenge to biopower production is a readily available feedstock supply. At present, biopower requires tax incentives to be competitive with conventional fossil fuels. If Congress considers a renewable electricity standard or other measures (e.g., farm bill energy programs) that include biopower, there may be concerns about the carbon neutrality of biopower. Congressional support for biopower has aimed to promote energy diversity and improve energy security, and has generally assumed that biopower is carbon neutral. An energy production activity is typically classified as carbon neutral if it produces no net increase in greenhouse gas (GHG) emissions on a life-cycle basis. The premise that biopower is carbon neutral has come under scrutiny as its potential to help meet U.S. energy demands and reduce U.S. greenhouse gas emissions is more closely examined.

Whether biopower is carbon neutral depends on many factors, including the definition of carbon neutrality, the feedstock type, the technology used, and the time frame examined. Carbon flux (emission and sequestration) varies at each phase of the biopower pathway, given site- and operation-specific factors. A life-cycle assessment (LCA) is a common technique to calculate the environmental footprint, including the carbon flux, of a particular biopower pathway. However, past legislation has not required a standardized LCA.

Interest in the carbon classification of biopower is in part due to sustainability and air quality concerns. Where the feedstock supply for biopower originates, if it is managed in a sustainable manner, and whether the associated air quality impacts from biopower generation are tolerable are questions that are part of the biopower carbon-neutrality debate. Congress may decide whether the current carbon-neutral designation for biopower is accurate, or whether additional carbon accounting for biopower is warranted and what impact this accounting might have on renewable energy, agricultural, and environmental legislative goals.

Rulings by the U.S. Environmental Protection Agency have raised questions about the carbon neutrality of biopower. For instance, the 2010 Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule did not exempt emissions from biomass combustion. Some view EPA’s decision as equating biomass emissions with fossil fuel emissions. EPA decided in 2011 to defer for three years GHG permitting requirements for carbon dioxide emissions from bioenergy and other biogenic stationary sources in order to conduct a detailed examination of the science associated with these emissions. EPA’s Science Advisory Board conducted an independent review of the agency’s biogenic accounting framework and released its findings in September 2012. The board acknowledged the “daunting task” of assessing the greenhouse gas implications of bioenergy, and the “narrow regulatory boundaries” within EPA’s purview that limit the consideration of greenhouse gas flux at various points along the bioenergy pathway. The deferral was vacated in July 2013 by a federal court decision.

State perspectives on the tailoring rule are divided. Some states contend that treating biomass combustion the same as fossil fuel combustion will result in excessive permitting requirements and fees that jeopardize renewable energy development. Other states argue that not treating it the same will aggravate climate change over time.

Date of Report: July 19, 2013
Number of Pages: 17
Order Number: R41603
Price: $29.95

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