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January 2013 Archive for Ag in the Courtroom

RSS By: John Dillard,

John Dillard grew up on a beef cattle farm and now works as an agricultural and environmental litigation attorney with OFW Law. His blog analyzes legal issues and court decisions that affect America’s farmers and ranchers.




Court Tells EPA to "Get Real" on Cellulosic Ethanol Standard

Jan 25, 2013


Today, the U.S. Court of Appeals for the District of Columbia struck down EPA's requirement that oil refiners use 8.65 million gallons of cellulosic ethanol in 2012 or pay a fine.  The reason was simple - there is no cellulosic ethanol.

EPA's authority to mandate ethanol use comes from the Renewable Fuel Standards (RFS), a product of 2005 and 2007 legislation passed by Congress to reduce greenhouse gas emissions and foreign oil dependency.  The RFS contain a mandate that a certain amount of biofuels be mixed with petroleum.  Refiners are subject to a fine if they do not meet the RFS mandate.

We are all familiar with the corn ethanol mandate, which requires refiners to use increasing amounts of corn-derived ethanol each year (12.45 billion gallons in 2013).  The corn ethanol mandate has increased corn demand (40% of 2012's crop), but higher corn prices have squeezed margins for livestock producers.

The advanced biofuels standard has received less attention in the agricultural community.  When the RFS was enacted, Congress wanted to encourage the development of "next generation" biofuels, which are essentially any type of biofuel not derived from corn.  Congress envisioned cars running on cellulose-based fuels derived from switchgrass, Sudan grass, straw, and forest residue.  However, there were no commercially-viable cellulosic facilities in operation when the RFS was enacted.  Although optimistic that the RFS would drive innovation, Congress provided EPA with guidelines in case cellulosic ethanol capacity did not meet the RFS standards.  EPA can estimate the amount of cellulosic ethanol that will be produced in a given year, and use that figure as the standard.  Furthermore, EPA may make up the cellulosic ethanol deficit by substituting other advanced biofuels, namely Brazilian sugarcane ethanol.

It turns out science does not necessarily move at the pace Congress wishes it did.  It's 2013 and there is still no commercial cellulosic ethanol production.  Nonetheless, the RFS called for 500 million gallons of cellulosic ethanol in 2012.  Recognizing that the cellulosic industry was nowhere near meeting this standard, EPA exercised its flexibility and set the cellulosic ethanol mandate at 8.65 million gallons for 2012.  EPA also mandated that 490 million gallons of other advanced biofuels be used to make up the difference.

The American Petroleum Institute (API) took issue with the 8.65 million gallon mandate, because, and apologies for repeating myself - there is no commercially available cellulosic ethanol.  The refiners faced monetary penalties for not purchasing a product that was not on the market.  EPA defended its position with the argument that these fines would incentivize development of cellulosic technology.  The court sided with API.  It held that EPA's position was the equivalent of saying "Do a good job, cellulosic fuel producers.  If you fail, we'll fine your customers."  Thus, EPA's cellulosic mandate for 2012 was struck down.

API, however, did not come away with a clean victory.   API also argued that EPA should have reduced or eliminated the amount of other advanced biofuels (Brazilian sugarcane ethanol) that was mandated.  The court disagreed.  It held that EPA has the discretion to mandate other advanced biofuels to make up for cellulosic ethanol shortfalls.  Thus, refiners were held to the requirement to use 490 million gallons of imported sugarcane ethanol.

Cellulosic ethanol may ultimately prove to be a great benefit for farmers, ranchers, and rural America.  However, federal courts are not going to allow EPA to fine petroleum refiners for the biofuel industry's failure to make aspirational policy a scientific reality.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer


A Court Decision That Could Haunt Animal Agriculture

Jan 16, 2013

A 2009 court decision pertaining to pesticide regulation is a looming threat for livestock producers.  EPA, state agencies, and environmental activists can leverage the precedent of National Cotton Council v. EPA to require livestock operations to seek a permit under the Clean Water Act (CWA) and charge fines of up to $37,500 per day.

The case was a challenge to EPA’s 2007 regulation that attempted to simplify the CWA’s regulatory burden on pesticide applicators.  In general, point sources of pollution (read: pipes or ditches emptying into a waterway) can only legally discharge pollutants if the discharge is in compliance with a National Pollutant Discharge Elimination System (NPDES) permit.  EPA’s proposed pesticide regulation stated that applicators did not need a NPDES permit so long as pesticides were applied in compliance with the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

Agricultural interests and environmental groups both challenged the regulation.  The issue at hand was whether pesticides that entered waterways could be defined as "pollutants" under the Clean Water Act.  The Sixth Circuit Court of Appeals held that pesticides, when applied in compliance with FIFRA are not pollutants under the CWA.  However, the court held that "pesticide residue" and "excess pesticides" are pollutants that can be regulated under the CWA.  The court reasoned that aquatic pesticides that were intentionally sprayed into waterways were not pollutants because they served a useful purpose.  Conversely, the court reasoned that land-applied excess pesticides and pesticide residues that reached waterways are chemical wastes that can be regulated under the CWA.  Thus, land applicators could be required to have an NPDES permit if excess pesticides or pesticide residue drift into streams or enters waterways via stormwater runoff.

Livestock producers should be concerned about National Cotton Council because of how the court addressed whether excess pesticides and pesticide residues were discharged from a "point source."  The court held that excess pesticide and pesticide residue were discharged from a point source, thus requiring a NPDES permit, even though they were not excess or residue at the time they left the applicator’s nozzle.  In essence, the court held that EPA can require a NPDES permit even if pollutants are not charged directly into waterways, but instead enter waters over time through air deposition or stormwater runoff.

How does this impact livestock producers?

EPA, state agencies, environmentalists, and animal rights groups have had modern animal agriculture in their crosshairs for some time.  EPA twice unlawfully attempted to require all large CAFOs (1,000 beef cattle, 700 dairy cattle, 2,500 swine, or 125,000 broilers) to obtain costly and cumbersome NPDES permits regardless of whether the CAFOs discharged pollutants to waterways.  Both of these attempts were thwarted.  In Waterkeeper Alliance v. EPA (2005) and National Pork Producers Council v. EPA (2011), federal appellate courts tossed out EPA’s CAFO rules, holding that CAFOs were only required to obtain NPDES permits if they actually discharged pollutants.

Faced with these defeats, regulators have adapted their strategy to require livestock operations to obtain NPDES permits – proving the existence of a discharge.  However, proving discharges on livestock operations are difficult absent a rare spill or leak.  Unlike other point sources, CAFOs are designed to not discharge in the traditional sense of the word.  Livestock operations do not have pipes or ditches channeling waste into waters because the manure and litter is stored, treated, and used as a soil amendment.

Instead, an aggressive EPA is seeking to prove livestock operations are discharging pollutants via dust particles that exit a feedlot, land on the ground, and mix with stormwater.  In doing so, EPA is employing the same logic used in the National Cotton Council case: pollutants (dust particles in this case) can be "discharged" by point sources in violation of the CWA through indirect means, such as drift and runoff.

People in the livestock industry understand that animal operations produce airborne dust particles that contain manure, litter, feathers, and dander.  Eliminating dust from operations is prohibitively expensive and practically impossible.  EPA has already shown that it is willing to use "dust and feather" discharges as a vehicle for requiring NPDES permits on poultry operations.  If EPA continues on this path, livestock producers will be saddled with the additional costs and regulatory burden of obtaining and complying with NPDES permits.

John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer



Allow Me to Introduce Myself

Jan 10, 2013

 Greetings! I am excited to join the AgWeb community and share my insight and analysis on legal issues that affect America’s farmers and ranchers.  I look forward to discussing these matters and interacting with readers. 

First, I will share a little about my background.  I am from Amelia, Virginia, a small community in Southside Virginia.  I grew up on a small beef cattle farm and have a strong appreciation for the rural lifestyle.  Like many of you, I had many valuable experiences in 4-H and FFA including livestock showing and judging.  I studied animal science and agricultural economics at Virginia Tech.  During my summers I worked on cattle farms and ranches in Virginia, South Dakota, and Wyoming.  These experiences gave me a greater appreciation for the varied challenges faced by producers across the country.  From there, I went to Purdue University where I received a master’s degree in agricultural economics.  After working as an agribusiness consultant and an economist with USDA, I chose to pursue a law degree from the University of Richmond.  Given my interest and background in agriculture, I decided to apply my legal training to the field of agricultural law.
I am now an attorney with OFW Law, a Washington, DC-based law firm that works with agricultural clients and clients with issues before USDA and FDA.  My work is primarily in litigation, with a focus on agricultural law and environmental law.  I relish my work and the opportunity that it provides me to advocate for American agriculture.
I will use this blog as a platform to discuss, in plain English, some of the pressing issues facing agricultural producers.  America’s farmers and ranchers face a number of challenges to stay afloat in a competitive market.  Increasingly, legal issues ranging from environmental compliance, odor nuisance suits, water rights, biotech seed, pesticide drift, and property rights are playing a significant factor in a producer’s business decisions.  I hope to shed light on these important issues and stay at the forefront of new developments.
I will not use this blog as a mere advertisement of my services.  I will do my best to avoid discussing an issue that involves a client and provide disclosure if I ever do.  This blog should also not serve as a substitute for legal advice.  If you have a real legal matter you should seek the assistance of your attorney.  
I will be allowing readers to comment on blogs that I post.  I hope that the discussions will be constructive and helpful.
Once again, I am proud to be on board and excited to get started!
John Dillard is an attorney with Olsson Frank Weeda Terman Matz P.C. (OFW Law), a Washington, DC-based firm that serves agricultural clients and clients with issues before federal and state courts, EPA, FDA, USDA, and OSHA.  John focuses his practice on agricultural and environmental law.  He occasionally tweets at @DCAgLawyer
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