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Vance’s stance on biofuels... Former President Donald Trump selected Ohio Senator JD Vance as his vice-presidential running mate for the 2024 election. In “First Thing Today” we highlighted Vance’s stance on agriculture and energy. Several Pro Farmer Members asked about his position on biofuels. We can infer some alignment between Vance and Trump’s policies on biofuels based on the following points:
· Vance has become a strong supporter of Trump’s policies since aligning himself with the former president. He has shifted his views on various issues to match Trump’s positions.
· Trump has been supportive of ethanol and biofuels, particularly in relation to the agricultural sector. In 2018, Trump ordered EPA to expand sales of corn ethanol, which was seen as a gift to farm states and corn producers.
· Trump’s directive aimed to increase the availability of E15 gasoline (containing 15% ethanol) year-round, which was a significant move to support corn growers and the ethanol industry.
· Vance has positioned himself as pro-Trump and supportive of policies that benefit domestic industries. As a senator from Ohio, an agricultural state, he is likely to be attentive to policies that support farmers.
· Vance has been critical of Biden administration policies related to energy, including the Inflation Reduction Act, which he claims has made the economy less energy independent. This suggests he may favor policies that support domestic energy production, potentially including biofuels.
· While we can find no explicit statements from Vance on ethanol and biodiesel, his alignment with Trump’s policies and his representation of an agricultural state suggest he may support similar pro-biofuel stances. However, it’s important to note that Vance has also been supportive of the oil and gas industry, which could potentially conflict with strong support for biofuels.
UBS: U.S. tariffs at 60% would halve China’s growth rate... New research from UBS Group AG indicates that imposing a 60% tariff on all Chinese exports to the U.S. would significantly impact China’s economy, potentially more than halving its annual growth rate. If former President Donald Trump, who has considered such a tariff, returns to the White House, China’s GDP could be reduced by 2.5 percentage points in the year following the tariff implementation. Currently, Beijing aims for about 5% growth this year after achieving a 5.2% expansion in 2023. The forecast assumes some trade will be diverted through third countries, that China will not retaliate and that no other nations will impose similar tariffs. The expected economic drag would be split between a decrease in exports and a reduction in consumption and investment.
Exports have been a significant growth driver for China this year, contributing 14% to the economy’s expansion and pushing the trade surplus to a record high last month. However, this export strength has led to complaints from trade partners, prompting more countries to impose or consider tariffs to counterbalance China’s trade practices. Over time, increasing exports through and production in other economies might mitigate the impact of higher U.S. tariffs, but there is also the risk of other countries raising tariffs on Chinese imports.
Chinese retaliation could worsen the situation by increasing import costs. Even the risk and uncertainty of another trade war could deter U.S. importers, regardless of any future tariff reductions. UBS forecasts China will grow by 4.6% next year and 4.2% in 2026, but this could drop to 3% for both years, even with stimulus measures. To counteract the effects of high tariffs, the Chinese government may use fiscal measures, ease monetary policy, issue special treasury bonds, and allow the currency to depreciate by 5% to 10%.
GM revises expectations for EV program... General Motors CEO Mary Barra has revised the company’s expectations for its electric vehicle (EV) program, particularly regarding the goal of selling one million EVs by 2025. Barra clarified GM’s transition to a 100% electric fleet will unfold “over decades” rather than adhering to a specific short-term target. This represents a shift from the company’s previous, more aggressive timeline. The CEO emphasized the pace of reaching the one million annual sales milestone for EVs will be determined by customer demand. This aligns with her statement that GM will be “customer-focused” as it goes through this transformation. Despite the revised expectations, Barra maintains that GM is still committed to an all-electric future. The company continues to invest heavily in EV technology and infrastructure.
The adjustment in expectations comes amid softening EV sales in the U.S. market. In the first quarter of 2024, there was a quarter-over-quarter decline in EV sales and only a 3% year-on-year increase.
Summit Carbon Solutions claims state, federal laws override Iowa counties’ pipeline ordinances... Summit Carbon Solutions argues that two Iowa county ordinances intended to limit the placement of carbon dioxide pipelines are overridden by state and federal regulatory authorities. This argument was reiterated in a recent brief to the federal court in response to appeals by Shelby and Story counties against a judge’s rulings that sided with Summit. An injunction currently prevents these counties from enforcing their ordinances. The case is now set for oral arguments before the Eighth Circuit U.S. Court of Appeals, with a decision expected next year.
Summit Carbon Solutions aims to build a 2,500-mile pipeline system across five states to transport captured carbon dioxide from ethanol producers to North Dakota for underground sequestration. The project, which received preliminary approval in Iowa last month, is driven by federal tax credits aimed at mitigating climate change. However, opponents are concerned about the safety risks posed by potential pipeline ruptures near populated areas and livestock.
The county ordinances establish minimum separation distances between pipelines and populated places. A federal judge ruled the ordinances were overly restrictive, potentially preventing the construction of carbon dioxide pipelines. Other counties have adopted less restrictive ordinances, with the latest one approved by Dickinson County, which has not been sued by Summit.
Chief Judge Stephanie Rose of the federal Southern District of Iowa ruled the placement requirements of the Shelby and Story ordinances are overridden by state and federal regulators, specifically the Iowa Utilities Commission and the Pipeline and Hazardous Materials Safety Administration (PHMSA). She also deemed the placement requirements, being safety-related, fall under PHMSA’s jurisdiction. However, PHMSA has indicated that local governments traditionally regulate land use, including setback distances.
Summit argues Judge Rose correctly identified the relationship between setbacks and safety, citing an early version of Story County’s ordinance focused on pipeline safety concerns. Summit contends that provisions requiring disclosure of information to local emergency officials fall under PHMSA’s jurisdiction. Furthermore, Summit asserts that the Iowa Utilities Commission has absolute authority to determine pipeline routes, rendering county ordinances irrelevant.
The American Petroleum Institute and the Liquid Energy Pipeline Association have filed briefs supporting Summit’s position, emphasizing the importance of pipelines to the U.S. economy and the exclusive authority of PHMSA over pipeline safety. They argue the county ordinances could disrupt the nationwide system of pipeline safety standards.
The outcome of this court action will impact pending lawsuits against other counties, which have been paused until the Shelby and Story appeals are resolved. Meanwhile, PHMSA is updating its safety standards for carbon dioxide pipelines, with counties arguing current rules are insufficient to protect the public and that there should be room for local control.
Lawsuit challenges U.S. over conservation leases on public land... The lawsuit filed by various industry groups representing farming, petroleum, mining, electric power and timber against the Interior Department’s new rule on conservation leases for public lands highlights a significant legal challenge to the Biden administration’s environmental policies. The Interior Department’s rule aims to elevate conservation to an equal status with other uses of public lands, such as oil drilling, grazing, and mining. It introduces “restoration leases” and “mitigation leases” for conservation purposes. The lawsuit argues that the new rule is “flatly inconsistent” with federal land management laws. This claim is rooted in the interpretation of the Bureau of Land Management’s (BLM) mandate for “multiple use” of public lands.
The legal action comes shortly after a Supreme Court decision in June that reduced the leeway given to federal agencies in interpreting laws. This timing is significant as it may impact how the courts view the Interior Department’s authority to implement such rules.
This legal challenge could have significant implications for the Biden administration’s broader environmental and climate policies, particularly those involving public land management. The lawsuit is part of a larger debate about the balance between conservation and resource extraction on public lands, which has been a contentious issue in U.S. environmental policy for decades.
EPA announced new protections against pesticide spray drift... EPA expanded its assessment of potential human exposure to pesticides that drift away from their intended application sites. Key points:
· EPA will now evaluate the potential for human exposure to pesticide drift earlier in the agency’s review process.
· This assessment will now apply to new active ingredients, new uses, and amended uses of pesticides, not just during periodic reviews.
· The new policy took effect immediately upon announcement.
· EPA uses peer-reviewed spray drift models (AgDRIFT and AGDISP) to estimate the contribution of spray drift to both ecological and human health risks.
· This change aims to provide more comprehensive protection for people living near agricultural areas where pesticides are applied.
· The move addresses concerns about the potential health impacts of pesticide drift on nearby communities, as illustrated by the 2004 incident near Lamont, California.
· While EPA is increasing protections, it’s worth noting that in the past, the agency has avoided putting Best Management Practices (BMPs) for spray drift prevention directly on pesticide labels due to their complexity and variability.
IMF sees steady global growth, warns of slowing disinflation momentum... The International Monetary Fund (IMF) kept its 2024 global GDP growth forecast unchanged from April at 3.2% and raised its 2025 outlook by 0.1 percentage point to 3.3%. IMF lowered its U.S. GDP outlook for this year by 0.1 point to 2.6%, reflecting slower-than-expected first-quarter consumption. Its growth forecast for next year was unchanged at 1.9%, with the slowdown expected to be driven by a cooling labor market and moderating spending in response to tight monetary policy.
IMF hiked its China growth forecast to 5.0% – matching the Chinese government’s target for the year – from 4.6% in April due to a first-quarter rebound in private consumption and strong exports. IMF also boosted its 2025 China GDP projection to 4.5% from 4.1% in April.
IMF slightly upgraded its 2024 euro zone growth forecast by 0.1 point to 0.9%, while leaving the bloc’s 2025 forecast unchanged at 1.5%.