May 20, 2009

What does cap and trade have to do with Animal Waste? More than you think, and not what you think.

Another great article from the Heritage Foundation. I find it even more interesting as I live in a rural area of a rural state, and a local town had the turkey rendering facility that the article mentions until it was thankfully shut down (according to the article because it became non-profitable when the government subsidy ran out, imagine that). Anyone who says that these operations are environmentally friendly does not have a sense of smell. If you can imaging what smoldering feathers, rotting turkeys, and road tar would smell like all mixed up that is about what the town smelled like most of the time they were running. They said they spent millions to make it safe, but many townspeople felt that anything that smelled that bad was likely not good for air quality either. Then they started only running at night, but unlucky for them there are many other industries in the local area that run 24 hours. The Missouri Dept of Natural Resources and the EPA set up a special hotline for people to call to report the odors. The EPA levied fines and injunctions against the company. Some folks might have even had the hotline number posted on bulletin boards near phones in factories to help employees call and complain. It would literally make you sick to your stomach at times. Anyway, what does this have to do with Cap and Tax? Well it is the exact same game. Read on to get the full picture…

The Waxman-Markey Pay to Play

When Congress passed its last major energy legislation in 2005, a minor provision was added late in the legislative process that created a $1-per-gallon tax credit for “renewable diesel” fuel created through “thermal depolymerization.” The measure was included to benefit a single firm that produced boiler fuel from turkey waste, but in 2007 the Internal Revenue Service ruled that the tax credit also applied to other livestock waste. This led corporate giants ConocoPhillips and Tyson Foods to form a joint venture that turned chicken, cow, and pig fat into diesel fuel.

But just as ethanol mandates drove up the price of food, diverting Tyson’s animal fat into the energy market drove up the costs of manufacturing soap. So the soap lobby fought back and earlier this year Congress cut the thermal depolymerization tax credit in half. This made the Conoco/Tyson venture unprofitable, which they have since discontinued.
What does this have to do with the Waxman-Markey cap and trade legislation currently being debated in Congress? Everything. In order to win enough votes to pass cap and trade, Rep. Henry Waxman (D-CA) has given the corporate members of the United States Climate Action Partnership (which includes both private and government-controlled firms like General Electric, Duke energy, Chrysler, and General Motors) a front-row seat in writing the legislation. The motives of these major corporations are simple: if they cooperate with big government in drafting the legislation, they can cut deals to protect their bottom line. If they don’t play ball, then big government will just tilt the regulatory scheme in their competitors favor. As the New York Times reports, this is exactly what is happening in the House now:

Cap and trade, by contrast, is almost perfectly designed for the buying and selling of political support through the granting of valuable emissions permits to favor specific industries and even specific Congressional districts. That is precisely what is taking place now in the House Energy and Commerce Committee, which has used such concessions to patch together a Democratic majority to pass a far-reaching bill to regulate carbon emissions through a cap-and-trade plan.

The Center for Public Integrity released a study today showing that lobbying on the Waxman-Markey bill has been dominated by just 10 major lobbying firms. And yesterday the United States Climate Action Partnership released a statement in support of Waxman-Markey explaining:

As USCAP has indicated, there are several key linked issues that must fit together to ensure a climate protection program is environmentally effective, economically sustainable and fair. In some instances, that does not occur in this legislation. … Individual USCAP members will continue to work with Congress to address these matters in a satisfactory manner.

Oh, we’re sure they will.

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