The Gas Tax: EPA May Cost $175 Per Cow

US - The internet lit up last week about a possible Environmental Protection Agency (EPA) green house gas (GHG) tax on dairy cows that would amount to a $175 per cow annual fee simply for ruminating.

28 November 2008

3 minute read

North America

The urgency of the proposal, which was flitting around the web at byte speed, was fueled by the fact that comments on the proposal are due this Friday, November 28. The proposal, issued in an "Advanced Notice of Proposed Rulemaking," is a mere 168 pages in the Federal Register, says Jim Dickrell, Editor of Dairy Today.

His thoughts were published in the Ohio State University Extension Beef Team newsletter, where he said that the EPA acknowledges that regulating GHG under the Clean Air Act is controversial: "The implications of a decision to regulate GHGs under the [Clean Air] Act are so far reaching that a number of other federal agencies have offered critical comments and raised serious questions during interagency review of EPA's ANPR.

"Rather than attempt to forge a consensus on matters of great complexity, controversy, and active legislative debate, the Administrator has decided to publish the views of other agencies and to seek comment on the full range of issues that they raise."

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"If Congress doesn't act, he would then let EPA move forward with the Clean Air Act regulating greenhouse gases"

Andrew Walmsley, environmental services coordinator with the Florida Farm Bureau Federation.

The problem, of course, is that EPA published the proposed rulemaking on July 30th - yep, four months ago - and few in the ag community seemed to take notice. Yet comments are due Friday - this Friday.

But before we all get our undies in a bundle, there is a bit of political gamesmanship going on here, suggests Andrew Walmsley, environmental services coordinator with the Florida Farm Bureau Federation.

"[President-elect] Obama is calling on Congress to enact global warming, cap-and-trade legislation within the next 18 months. If Congress doesn't act, he would then let EPA move forward with the Clean Air Act regulating greenhouse gases," he says.

If that happens, pain will follow. Title V of the Act requires any entity that will potentially emit more than 100 tons of green-house gas to obtain a permit. USDA estimates that any dairy farm with more than 25 cows or any beef operation with more than 50 cattle would be potential emitters of that 100-ton magnitude.

In 2008-2009, the "presumptive minimum fee" for the emissions permit is $43.75/ton/year of emitted GHG, which translates into $175 for each dairy cow, $87.50 for each head of beef cattle and $20 for hog. Can you say ouch?

The average U.S. dairy farm, which now milks 155 cows, would be facing a $27,000 annual GHG permitting fee.

Such onerous penalties are insane. What it would amount to, for the mere privilege of inhalation, exhalation, and flatulency, would be 87.5¢ fee on each hundredweight of milk produced. And that doesn't include the higher feed prices driven by the permitting fees on crop farmers. (Farms with more than 500 acres of corn or 250 acres of soybeans would also be required to obtain - and pay for - emissions permits.) And for what?

Agriculture, and the dairy industry in particular, has done an incredible job of reducing methane emissions over the past 85 years. Over that period, milk production has doubled while cow numbers have dropped nearly 60%. Click here to read the stories from Dairy Today and the University of Minnesota. As a result, each gallon of milk produced today results in just a third of the methane emitted compared to 1924. The dairy industry should be applauded for that achievement, not penalized with put-you-out-of-business taxes.

Congress must get its clean air act together to enact cap-and-trade legislation. The alternative - an emissions tax on food production - stinks.