Does the GOP Need To Pass a Farm Bill?

National Journal:

For the last several years, commodity prices have been so high that farmers haven't been concerned about their safety net and farm leaders have found it impossible to get their members to put on the kind of grassroots campaigns that are usually required to get a bill enacted. Those high prices have allowed Republicans, particularly in the House, to engage in an endless debate over food stamps, formally known as the Supplemental Nutrition Assistance Program, or SNAP.
Now big crops and the Obama administration's decision to consider lowering the volumetric requirements for corn-based ethanol and biodiesel under the renewable-fuel standard have sent commodity prices plummeting and raised questions about land values. As Bloomberg has reported, corn prices in 2013 experienced their biggest one-year drop since 1960 and wheat prices dropped the most in five years. Prices haven't fallen below profitable levels yet, but farmers and their bankers now see that they need the certainty of a five-year bill, whatever its details.
Since the Democratic-controlled Senate passed a farm bill in 2012 and 2013 and the House passed it in 2013 after the most excruciating lengthy battle, there seems to be an understanding in political circles that if the conference report gets held up, rural voters will see it as the fault of the Republicans in general and the House Republicans in particular.
The evidence can already be seen in key Senate races. In December, Sen. Mark Pryor, D-Ark., said that the vote of his expected opponent, GOP Rep. Tom Cotton, against a comprehensive farm bill last June because it didn't cut food stamps enough had hurt Arkansas farmers. Pryor urged farmers to ask Cotton how he will vote on the conference report that will most certainly include both commodity programs and food stamps.
In Kentucky, Allison Lundergan Grimes, a Democrat running against Senate Minority Leader Mitch McConnell, has charged in a TV ad that Congress's slowness in passing a farm bill means "McConnell's failure to lead hurts Kentucky farmers." Grimes has also called McConnell's vote against the Senate farm bill "shameful."
McConnell, who also faces a Republican primary, justified his vote, telling reporters, "In the Senate bill, it just largely became a food-stamp bill with production agriculture kind of stuck on as an afterthought."
Sen. Tammy Baldwin, D-Wis., is not up for reelection in 2014, but she recently used the farm bill in a fundraising letter. "The failure to pass a strong farm bill could do serious damage to Wisconsin's economy and to communities all over the country who depend on family farms moving local economies forward. Tea-party obstructionists can't be allowed to play political games with America's rural economy," Baldwin wrote to her supporters.
The farm bill could also become an issue in Senate races in Georgia, Iowa, Louisiana, Montana, South Dakota, and West Virginia

Personally, I don't see it being a big part of the 2014 elections.  While farmers vote, there just aren't a huge number of people who actually get government money as farmers.  In the end, the food stamp portion affects way more people, and that is what the Republicans really want to cut.  Politically, those cuts probably won't hurt most rural Republicans, but you never can tell.

Commodity Markets Look Bleak in 2014

WSJ:

Many investors expect commodities markets to struggle for a fourth consecutive year in 2014, as steady-but-unspectacular economic growth extends a rough patch for what had been one of the hottest investment niches of the past decade. In 2013, investors appeared to finally give up on hopes for the return of the "supercycle," the confluence of tight supplies and surging demand that propelled prices for commodities ranging from oil to aluminum to wheat to records in the past decade. Years of high prices persuaded farmers to boost crop output and metal producers to invest in new mines. In 2013, those efforts flooded many markets with more supply than a barely expanding global economy could consume. The Dow Jones-UBS Commodity Index, which tracks 22 U.S.- and London-traded commodities, fell 9.6% in 2013, the third consecutive annual loss. With the S&P 500-stock index climbing 30% this past year, the gap between commodities and stocks was the widest it has been since 1998. Investors and analysts expect more of the same. Analysts with Citigroup Inc. C +0.31% are bearish or neutral on 19 of the 23 commodities tracked by Citigroup, even as the bank forecasts that global economic growth is expected to accelerate to 3.2%, from 2.5% this year.
"There's going to have to be a huge shift in market psychology to have commodities bounce higher," said Ralph Preston, a market strategist with Heritage West Financial in San Diego. Growth in China, the world's largest consumer of raw materials, is widely expected to continue at a pace close to the state-targeted figure of 7.5% for 2013. But that expansion would remain a step below the frantic growth seen during the past decade's commodity boom. While the country will likely consume greater quantities of most commodities in 2014, analysts caution that a slower-expanding China may not be enough to absorb the increased global output of agricultural commodities, minerals and fuel. In industrial metals, aluminum and steel are locked in a chronic surplus, and iron ore and copper are set to join them as production ramps up from megaprojects in Peru, Mongolia, Australia and other countries. It is the same story for agricultural commodities such as corn, whose stockpiles are set to more than double next year in the U.S., and for sugar.

I wouldn't be surprised if grain markets just trend lower and lower all year.  I think this is going to be a very tough year.  Hopefully, I'll be wrong.  Where grain prices are right now, I can't see land prices remaining propped up where they've been.

Hard White Wheat Gains Market Foothold

Harvest Public Media via Big Picture Agriculture's new sister site, Sowing Agricultural Seeds Daily:

A new wheat variety may have cracked the code to marry the fluffiness of white bread with whole grain nutrition.
For a long time, American bread makers have been in a bind. Many consumers like the texture and taste of white bread, but want the nutritional benefits of whole grains.
Snowmass, named for a Colorado peak, is a hard white wheat variety, a crop in high demand as bread makers increasingly seek new markets -- in this case health-conscious consumers who don’t want to give up white bread. Hard white wheats lack the dark bran color and potent flavor of their red wheat cousins, which are grown widely across the Great Plains.
Farmers and food companies have been interested in hard white wheat for a while, but economic and climatological realities have kept it from taking off. Hard red winter wheat grows well in wheat states like Colorado, Kansas and Nebraska. But it doesn’t mill into white flour, it has to be bleached. By itself, the dark, flavorful bran it can be a tougher sell to more finicky consumers who prefer white bread.
Wheat breeding programs, both public and private, have been hard at work trying to come up with a variety like Snowmass -- a type of white wheat that yields well, mills into a white flour and mixes easily into dough.
Colorado State University wheat breeder Scott Haley finally had success. He’s the father of Snowmass. When you come up with a well-performing, novel crop, there’s a whole community of people who consider you a rock star.
“Well, I’ve been told that this is the most famous wheat in the world, which is just like, oh my gosh. I don’t believe that,” Haley said.
The foundation that funds some of Haley’s research receives money from food giant ConAgra to develop wheat varieties for commercial use. The exact amount is part of a confidentiality agreement among Colorado State University, ConAgra and the Colorado Wheat Research Foundation. ConAgra has been after healthier white flour, which its customers, like Sara Lee and Azteca, can then turn into whole grain white products like breads and tortillas.

Sowing Agricultural Seeds Daily looks like it will be a must-visit site.

Shale Oil Train Derailment Rattles N.D. Town

Valley News Live - KVLY/KXJB - Fargo/Grand Forks

Authorities urged residents to evacuate a small North Dakota town Monday night after a mile-long train carrying crude oil derailed outside of town, shaking residents with a series of explosions that sent flames and black smoke skyward.
The Cass County sheriff's office said it was "strongly recommending" that people in the town of Casselton and anyone living 5 miles to the south and east evacuate. A shelter has been set up in Fargo, which is about 25 miles away. Casselton has about 2,400 residents.
The sheriff's office said the National Weather Service was forecasting a shift in the weather that could increase the risk of potential health hazards.
"That's going to put the plume right over the top of Casselton," Cass County Sheriff Paul Laney said at a news briefing.
As many as 10 cars out of more than 100 caught fire when the BNSF Railway Co. train left the tracks about 2:30 p.m. Monday. No one was hurt.
The cars were still burning as darkness fell, and authorities said they would be allowed to burn out.
Authorities hadn't yet been able to untangle exactly how the derailment happened, but a second train carrying grain was involved. BNSF spokeswoman Amy McBeth said the train carrying grain derailed first, then knocked several cars of the oil train off adjoining tracks.

Trains carrying dangerous chemicals and occasionally derailing is not a new occurrence, but the controversy  surrounding fracking and the construction of the Keystone pipeline push recent derailments involving crude oil shipments into the headlines.  I've often considered how scary it could be when living beside a major railroad line and watching carloads of propane, sulfuric acid, molten sulfur and sodium hydroxide flying by.  Walking the tracks getting  from one field to another definitely doesn't bolster my confidence.  While the railroad has spent a lot of money on infrastructure over the last few years, the siding which runs the length of the farm I live on is not one of these expenditures.  The ties are terrible, and the rail actually looks in pretty good condition considering that it came out of the mill in 1943 (unlike the main line which was milled in 1974).  I am glad that trains using the siding travel at extremely low speeds.  Considering that oil exploration in the hottest shale plays has dramatically outpaced investment in infrastructure (I actually think that the underinvestment in pipelines may be due to oil players' not believing their own hype when it comes to the potential longevity of these shale plays), I would anticipate quite a few more of these kinds of accidents.  Hopefully none are as deadly as the Lac Megantic derailment.

Farming and Fracking

Via Marginal Revolution, the only places where median household income increased are in fracking or farming:

Prairie Suffers as Land Comes Out of CRP

(chart should read million)

Weekend Edition Sunday:

"Goodness, there's thousands of species that live in grasslands, including several hundred species of higher plants," says , an ecologist at South Dakota State University in Brookings, S.D. Plus, permanent grass cover keeps soil from washing away.
"With those deeps roots that grasses have, and thick thatch, the water has a hard time getting a hold of the soil," says Johnson.
So more land in CRP means cleaner streams, less fertilizer runoff and more carbon stored in the soil.
Back when Reynolds was showing me those duck eggs, there were 34 million acres enrolled in the CRP — an area roughly the size of the state of New York.
In recent years, though, the conservation reserve has shrunk by more than 25 percent, including those 1.6 million acres that farmers took out of the program this past year.
It's partly because Congress has cut funding for the program. But there's a more important reason: high grain prices.
Farmers have been making a lot of money recently growing corn, soybeans, and wheat. They're bidding up prices for land, and landowners are cashing in.
In southwestern Iowa, near the town of , the owners of about 60 acres decided to take it out of the CRP. They rented it instead to farmer Mark Peterson. "They felt that it would make more income for them, renting it out, than it would being in the CRP," says Peterson.
Peterson recognizes that "it is fragile ground," so he says he'll be extra careful with that land, which is on a hillside. Some parts are quite steep, and the soil could easily wash away.
He grew soybeans on it this year, but he tried to disturb the soil as little as possible. And he'll plant cover crops in the off season to anchor the soil.
Ecologist Johnson, at South Dakota State University, says the shrinking Conservation Reserve is just one part of a larger trend: Farmers are ripping up other grasslands, too, including native prairie that never was plowed.
"I've seen things that I never thought I'd see here in South Dakota," he says. "With these land prices going up, there actually are people out there with Bobcats and front end loaders, pulling out the rocks in hundreds of acres of land that's been in pasture all these years."

This is one of the worst aspects of the biofuels-driven ag boom economy of the last six years.   Big Picture Agriculture has featured some pictures of some of the worst examples of sensitive land being abused in an effort to cash in on the boom.  Overall, it is tremendously depressing.  As Kay notes in one of the posts, all the additional land contributes to overproduction, which contributes to price deflation, which risks pushing prices below cost of production.  So we are destroying sensitive lands and destroying the ag economy at the same time.  That is not good at all.

Why The Dairy Cliff Won't Materialize

Because it would be a stupid pain in the ass:

U.S. farm law is set by a 1949 act that includes hefty price supports for dairy farmers. Those supports were once needed because dairy prices often weren’t high enough to cover the costs of production. The law directs the federal government to buy milk, butter and cheese, artificially inflating prices to prop up farmers.
But the “permanent law” is superseded by the farm bills Congress is supposed to pass roughly every five years. Not surprisingly, the current Congress has had some trouble reaching an agreement this time around, and the farm bill is now ridiculously late. A one-year extension at the end of last year wasn’t enough, and congressional leaders have said the bill will be taken up in January. Theoretically, that means a reversion to the “permanent law,” which would force the Department of Agriculture to start buying dairy products at (perhaps) about double their current prices on January 1. Hence the headlines warning that a gallon of milk is about to shoot up to anywhere between $6 and $9 a gallon, depending on which account you believe. There were even more scary “dairy cliff” headlines last year, before the extension was passed. We weren’t any close to the edge then than we are now.
Like the debt ceiling, the “permanent law” carries the “threat that it’s such a goofy law that Congress will pass a new one and rewrite the rules and not go back to the old rules,” Kent Olson, a University of Minnesota Extension economist, told Minnpost.
Secretary of Agriculture Tom Vilsack, though, has said that he won’t implement “permanent law” as long as Congress continues debating the farm bill in January, which they will be doing. And even if we were to go over the dairy cliff, Vilsack has any number of options for stalling price supports. It’s not like the federal government can suddenly just start buying (and storing) vast amounts of dairy products.

The Farm Bill is one of the better examples that Congress is full of clowns.  They've had forever to bang out a farm bill, and they are still unable to get anything done.  And the kicker is that the reactionary morons from rural areas in the House decided to hack the food stamps out of the bill, which was the only reason the Congressmen representing areas with sustainable population densities had any interest in passing a Farm Bill.  What a bunch of asshats.

U.S. Men Qualify for Olympic Curling Tournament

Minneapolis Star-Tribune:

Winning the U.S. Olympic curling trials should have been cause for celebration, but John Shuster and his crew knew their task was only half complete. The Duluth skip and his Minnesota teammates still had to qualify for a place in the 2014 Winter Olympics, leaving them with some serious work to do before the party could start in earnest.
The foursome finally got to raise that long-delayed toast Sunday. They rallied to beat the Czech Republic 8-5 in the last game of the Olympic qualifying tournament in Fuessen, Germany, to claim the final spot in the Sochi Olympics. Shuster and teammates Jeff Isaacson of Gilbert, Jared Zezel of Hibbing and John Landsteiner of Duluth won five consecutive games to end the tournament and came back from a 3-2 deficit late in the final match.
Shuster earned his third consecutive trip to the Olympics in dramatic fashion. His team trailed after seven of 10 ends in a tense, back-and-forth game, then scored five in the eighth end to take command. Their victory puts four more Minnesotans on the Olympic team; the women’s curling team, which already had locked up its berth, includes Jessica Schultz of Minneapolis and alternate Allison Pottinger of Eden Prairie.
“The butterflies of winning for an opportunity like this, they never get old,’’ said Shuster, 31, who won a bronze medal at the 2006 Olympics as the lead for Pete Fenson’s team. “That’s why we play this game. I’m extremely proud of how well our team has played the entire season, and especially here, when we had our backs against the wall.’’
Shuster’s team won the U.S. Olympic curling trials in November in Fargo, N.D. It was forced into the eight-team qualifier because the U.S. was ranked eighth in the combined standings of the past two world championships. The top seven teams, plus Russia as the Olympic host, earned automatic berths in the 10-team Olympic tournament.
The final two teams were decided via the qualifier. After a 2-2 start — including a loss to the Czechs in Tuesday’s opener — Shuster’s team won three consecutive games. Germany and the Czech Republic topped the standings and played for the first Olympic spot, while the U.S. had to beat Korea in a Saturday tiebreaker to keep its hopes alive.

I started watching the match last night, but I only made it through about 12 stones before I fell asleep.  At least this will guarantee a decent amount of curling coverage on TV.

Farmers Hoarding Corn

WSJ, via Big Picture Agriculture:

Faced with the lowest corn prices in more than three years, many U.S. farmers are stashing away their grain in a bet on a rebound.

The strategy is sending ripples through the corn belt—affecting everyone from grain buyers to storage-bin makers—and tempering the price declines in the $27 billion corn-futures market.
By hoarding freshly harvested supplies, farmers are forcing livestock producers, ethanol companies and food makers to pay a premium over futures in some areas to secure corn, helping to buoy prices during what is expected to be a record U.S. harvest, traders and analysts say. But they warn the move could backfire on farmers in coming months if rival producers—such as growers in South America—generate big crops or demand for corn falls.....

Mary Ann Kwiatkowski, an independent grain trader at the Chicago Board of Trade, says she is "a little less bearish" on corn futures because of the farmers' strategy. Because storing corn leads to higher cash prices, it will cause investors to be less willing to bet on declines in corn futures, she says.

"Farmers have had a lot of years of doing very well," says Craig Turner, a senior broker at Daniels Trading in Chicago, "and they can use the bins as a bank account and only sell when they need to. Having the storage has helped with the price not coming down as much as it would have. It helps stabilize the price."

But analysts say corn growers are taking a big risk, noting that favorable weather so far this season for rival farmers in Brazil and Argentina could lead to large crops in the new year, which could further expand global supplies and exert even more downward pressure on prices.

The corn stockpiles also act as an overhang on the market. Farmers eventually will have to sell their grain, Mr. Turner says, and when they do, the added supplies will weigh on prices.

The USDA estimated in November that U.S. corn production will total 13.989 billion bushels this year, easily surpassing 2009's crop, the largest so far. The massive harvest comes just a year after the worst U.S. drought in decades curtailed output and vaulted corn futures to a record-high closing price of $8.3125 a bushel.

I don't see this ending well, and this is one of the biggest reasons I'm pretty bearish about the next couple years' corn crops.  I just don't see anything to drive prices higher for a while.  Also from Big Picture Ag are a couple of farmland price stories.  The fact that a big pension fund is buying a huge parcel of farmland is a contrarian indicator in my opinion.  As for Iowa, I don't know what's going on there:

WTF?  Has anybody out there tried to make those numbers work with corn under $4?

Lawmakers Push To Remove Corn From Ethanol Mandate

Expect more of this:

A bipartisan group of lawmakers has introduced legislation that would eliminate corn from the country’s ethanol mandate requirement.
The bill, introduced by Sens. Dianne Feinstein, D-Calif., and Tom Coburn, R-Okla., would greatly diminish the prominence of the Renewable Fuel Standard by removing the component that requires fuel to be made from corn. Smaller mandates for advanced biofuels such as cellulosic would remain in place. The Renewable Fuel Standard, put in place in 2005 and strengthened two years later, requires refiners to blend 16.55 billion gallons of biofuels in 2013, most of it from corn.
The 10 senators, all of them from states that are not major corn producers, said the maize component of the Renewable Fuel Standard has made food more expensive for consumers, pushed up the cost of animal feed for livestock farmers and harmed the environment.
The head of Growth Energy, which represents the ethanol industry, called the legislation “incredibly shortsighted.”

If they do this, expect a severe drop in corn prices and numerous ethanol plant closings.  I'm pretty sure the strength of Big Corn and their ethanol juggernaut has peaked. The at least short-term growth in oil production due to shale oil has strengthened Big Oil to go after their mortal enemies in the grain alcohol industry.

North Dakota Oil Production Sets New Record

National Journal:

Oil output in North Dakota reached a record high for the state in October, with production rising to just over 941,000 barrels per day, according to data released by the North Dakota Department of Mineral Resources.

Natural-gas output also climbed to a high of slightly more than 1.07 billion cubic feet per day.

"We set a new production record again in October and had a well-record both in oil and natural gas," Lynn Helms, the department director, said during a press call Friday.

Helms noted, however, that the uptick in production from September to October, which registered as an increase of approximately 8,600 barrels per day, was less than expected.

"It was maybe a little bit lackluster in terms of the production increase, less than what we would have maybe anticipated for the amount of drilling and well-completion going on out there," he said.

Heavy rains in North Dakota's McKenzie County leading to road closures that lasted several days were to blame for tepid production gains, Helms said, estimating that output would likely have been 10,000 to 15,000 barrels a day higher in dry weather.

When asked when he expects the state to hit the production threshold of 1 million barrels of crude per day, Helms said that will likely happen early next year as state officials have previously estimated.

"We've always been predicting that that would come early next year so even with what happened in October ... all it does is postpone it. It doesn't mean we're not going to get there," he said.

I'm just curious where the peak will be.  The furthest out projection I've seen is 2020, but I would guess it would be much sooner.  Then again, predictions of well production falloff may be grossly pessimistic.  Only time will tell.  However, when the Eagle Ford and Bakken peak, expect to see spiking oil prices.

A Depressing Start to the New Year?

Looking over the bowl matchups, it appears that New Year's Day might be kind of ugly for the Big Ten.  While Michigan State and Stanford should be pretty evenly matched in the Rose Bowl, and Wisconsin could give South Carolina a run, Iowa vs. LSU and Nebraska-Georgia just don't appear to be fair fights to this guy.  I anticipate that the Big Ten will again struggle during the bowl season.

Buckeyes Stumble

Pat Forde:

If you want to know how badly the Big Ten championship loss wounded Ohio State, consider this:
After Michigan State had finished harmin' Ohio, the Buckeyes bagged "Carmen Ohio."
At a school that takes its traditions seriously, that will be considered sacrilege by some fans. Under former coach Jim Tressel, the ritual was non-negotiable: Win or lose, the team would gather postgame before the marching band and sing the song, written more than a century ago by an Ohio State student.
For 24 games under Urban Meyer, that continued. Game ended, players gathered, song was sung. Meyer, a self-proclaimed lover of Buckeye lore, was always front and center, flanked by players on either side.
Made for a nice photo op, at the very least.
Of course, for 24 games there was never a loss, never a chance to test the commitment to tradition in a time of adversity.
Saturday night, that changed. Saturday night, Meyer's Buckeyes finally lost – and did so in shocking fashion. They fell behind the Spartans 17-0, roared back for a 24-17 lead, then were hit with another 17-0 flurry in a devastating 34-24 loss.
National title aspirations vanished. The program that had dominated a diminished Big Ten finally played an opponent of consequence – and was exposed as a cut below championship mettle.

This part is brutal:

This game reinforced what many of us suspected: Ohio State's winning streak was a house of cards, built on soft competition. The non-conference schedule was awful, and the conference has been at a low ebb. For this team to have skated into the BCS championship game would have been a disservice to college football.
The Buckeyes hadn't played a single top-10 opponent since Tressel's last game as coach, the 2011 Sugar Bowl. Their victories shouldn't have impressed anyone, but poll voters are seduced by brand-name programs with perfect records.

And so, after scraping past a hugely disappointing Michigan team by one point last week, a team ranked second by the polls and BCS computers came to Indy with everything within its grasp. Just win this game – in front of a crowd that was 70 percent scarlet-and-gray – and the Buckeyes would go to Pasadena and play for the national title.

It was all right there for the taking. And they blew their chance, ceding a spot in the title game to Auburn – and giving the Southeastern Conference a shot at a great eight straight championships.

The Big Ten has not been very good for a while now.  I think the Buckeyes are lucky they weren't exposed by a non-conference opponent in the BCS Championship.  The four team playoff makes things more rational, but it probably ought to be a requirement for power conference teams to play a serious non-conference opponent each season, so you can tell who the pretenders are.

More on Farm Profitability

From the Des Moines Register:

Economists expect Iowa corn and soybean growers will lose money over the next four years, beginning with this year’s harvest, squeezed by low commodity prices and high production costs.
The potential downturn follows a boom that saw growers worldwide bringing millions more acres into production to take advantage of record-high prices.
Experts in Iowa compare the downturn to the devastating 1980s farm crisis, the only time in at least 60 years that the state’s farm industry posted a loss. This correction is unlikely to be as severe, because farmers are coming off record-high net incomes. But enough similarities exist to cause concern.
“We’ll likely see some bad times moving forward,” Chad Hart, an Iowa State University agriculture economist, told growers at the Iowa Farm Bureau annual meeting last week.
Even with a hoped-for soft landing, Iowa is expected to see a $1.4 billion hit to farm income this year alone, a blow that will ripple through Iowa’s slowly recovering economy.
Adding to concerns is a proposed rollback in the amount of renewable fuels that must be blended into the U.S. fuel supply. That could trim another 10 cents to 25 cents from corn prices, which, at about $4.20 a bushel, are already 45 percent lower than a year ago, experts say.

However, livestock producers should fare better:

Lower corn and soybean prices, though, will help Iowa livestock producers, who have suffered through recent losses as a result of high corn and soybean prices.
“It’s a little frustrating to hear people talk about how good agriculture has been,” said Ed Greiman, who raises 2,000 cattle near Garner with his brother, Matt. “It’s been phenomenal for corn and soybeans. But just as good as it’s been for them, it’s been as bad for us.”
Livestock production makes up about 40 percent of the state’s farm cash receipts, federal data show.

The experts are still saying that farmers aren't as leveraged as they were in the '80s, so things shouldn't be nearly as bad.  We'll see.  Experts didn't think there would be a residential mortgage crisis, either.

Grain Farmers Might Face Rough Future

This forecast is calling for grain farmers to lose money until 2017. More to come in tomorrow's Register:



We've been told a number of times that this boom is different, but if things get as bad as they are saying, we may, as Warren Buffett says, find out when the tide goes out who was swimming without a bathing suit.

Petroleum Coke Piles Anger Neighbors

AP:

With the amount of Canadian oil entering the U.S. increasing almost daily, refineries like Marathon in Detroit, BP in Whiting, Ind., and Phillips 66 in Roxana, Ill., have expanded to handle the glut. Even more oil could be on the way if the controversial Keystone XL pipeline is approved, though by then additional domestic pipelines could direct some to refineries in other regions, experts say.
Refineries usually sell the petcoke to other companies, which store it until it can be loaded onto Great Lakes ships for export to places like China. Burning it emits high levels of soot and greenhouse gases, so its use in the U.S. is limited.
In Detroit, petcoke began appearing along the Detroit River in the spring, several months after the Marathon Petroleum Corp. refinery completed a $2.2 billion expansion. But an outcry by residents, who shot video footage of the blowing grit, prompted city officials to order the removal of the piles.
In Chicago, residents became alarmed when the black piles began growing about six months ago, said Tom Shepherd, a member of a neighborhood group. The last straw was when the petcoke went airborne on Aug. 30 and blew into their yards, churches and a Little League field.
Chicago Mayor Rahm Emanuel has ordered the city Health Department to adopt regulations for petcoke, while aldermen introduced competing ordinances to regulate or ban it outright. The city and Illinois Attorney Gen. Lisa Madigan have filed suit against Beemsterboer over the petcoke on his sites.

The anti-Oil Sands crowd and the folks concerned with global warming will combine with neighbors of refineries to really limit these petroleum coke piles, unless the owners find a way to effectively control dust emissions.  As unpopular as petroleum coke is in these crowds, they have to be better neighbors.

Farmers Need To Make Case For Urban Support

A Des Moines Register editorial makes the case that for the Farm Bill to get support, they need to give some things up to get urban support:

That rural-urban coalition fell apart last year when the House removed food stamps from its version of the farm bill. The legislation has also become a battleground for environmental groups that see crop subsidies encouraging reckless and unsustainable management of farmland. Consumer groups increasingly concerned about Americans’ diets and rates of obesity believe Congress should encourage production and consumption of fruits, vegetables and organically grown foods. And, while city folk might be sympathetic to the plight of family farmers, they are less so of corporate-style industrial agriculture. This splintering of views on what had been a fairly noncontroversial piece of legislation has not been lost on lawmakers from rural states, including Iowa’s congressional delegation. Yet it is still not clear that leading farm organizations in this state and in other farm states have gotten the message that they have to make a better case for the federal support they enjoy.
Every other Iowa business would dearly love to have taxpayer-subsidized price supports and insurance that protects against natural and economic losses. Farmers must make a better case for why their industry should get special treatment.
It is not enough just to say that economically stable farming is essential to putting food on the table at reasonable prices. Or that farmers are subject to potentially ruinous risks related to the weather or insects and blight. American farmers must also demonstrate in measurable ways that they are using sustainable farming practices that protect the environment and preserve the land for future farmers.
They must demonstrate that they are willing to accept mandatory conservation rules and participation as a tradeoff for asking American taxpayers to subsidize their business. That has not happened. Instead, powerful farm organizations and state leaders in Iowa send the opposite message that they expect government handouts without any strings being attached.
That attitude will no longer do. Congress is on the precipice of failing, for the third time in the past two years, to pass an extension of the historic farm bill. It is time for rural America to wake up to that possibility.

Farmers are going to find out that the politicians they put into office are so enamored of "trickle-down" economics that they are willing to sacrifice spending which goes to their constituents in order to further cut taxes for the wealthiest Americans.  You get what you vote for.

An OSU-Michigan Tradition

Bob Wojnowski's OSU slamfest:

As thousands of scarlet-nosed Ohioans truck into town, clogging the White Castles, it’s important to remind our friends of a couple rules.

■No. 1, Tasers are not toys, not even after 16 beers.

■No. 2, we strictly enforce BYOPP (Bring Your Own Porta-Potty).

Thankfully, our state gets two shots at the unbeaten Buckeyes this year, and the Wolverines could use the help. I’m not saying they’ve been playing possum, because that sounds like a jab at the second-most popular Thanksgiving dish in Ohio. But maybe the 7-4 Wolverines cleverly saved all their good plays — you know, the ones that go forward — for The Game on Saturday.

The hope is, Michigan at least can soften up Ohio State with a series of glancing body blows, and then Michigan State can finish the job next week in the Big Ten championship game. The Spartans made a horrible miscalculation and clinched early, so they’ll warm up Saturday by whacking the Gophers in front of a tidy gathering of family and friends.

If you think Michigan, a two-touchdown underdog, is afraid of Ohio State, ha, you don’t understand this great rivalry. First of all, once you’ve rushed for minus-69 yards in back-to-back games, you’re not afraid of any embarrassment. And second — and I mean this in the most-respectful way — Ohio State is in the midst of the worst 23-game winning streak in college football history.

Am I being too harsh? Not really. I’ve done investigatory work with my assistant — the talented Ms. G. Oogle — and in this 23-game stretch, Ohio State has precisely one notable road victory — in overtime against Wisconsin last year. This season’s slate includes the standard Big Ten wrecks, as well as the likes of Buffalo, California, San Diego State and Florida A&M. Cripes, why not just complete the cupcake run and schedule Florida?

Considering how bad Michigan has been recently, this is a pretty impressive effort. Of course, he ends up picking OSUto win, 24-9.

Balancing Wind and Gas Generation

National Journal:

Managing wind power makes flying a kite look easy.
Wind usually blows the most between 1 a.m. and 4 a.m. when people need electricity the least. But every now and then, the weather gets surprisingly windy at other times. That's when a handful of people on the 10th floor of a downtown Denver office building suddenly get very busy.
"They're really scrambling during that time frame," said Mike Boughner, Xcel Energy's manager of generation control and dispatch, while giving a recent tour of the company's "trading floor," where traders buy and sell electricity and other employees manage the power of the company's entire electric-grid operations throughout the Western and Central U.S., 24 hours a day, seven days a week. "They're calling all the plants, both natural gas and coal, and telling them to back down as fast as they can."...
This is where natural gas comes in, which can be turned on and off more quickly than coal and nuclear. It's also cheaper than nuclear and cleaner than coal.
Pointing to one of many large screens in the room, Boughner said: "This shows the flexible gas-fired combustion turbines that the operator uses to fill in the gaps and respond to variabilities in the wind."
In addition to natural gas, Xcel also uses a hydroelectricity dam in the nearby Rocky Mountains as backup power to wind, which in a roundabout way is actually powered by wind. But natural gas is the primary source used by Xcel—and the country—to use when the wind dies down.
These two energy resources have long been considered a good match on the grid, and Xcel Energy is on the forefront of testing the boundaries of this relationship. Until technology offers a way to store renewable energy on a wide scale, wind needs natural gas.
"We'd have blackouts," Boughner said when asked what would happen if Xcel didn't have natural gas to back up wind. "We would definitely have events where we would have to shut off the lights."
But wind helps natural gas, too, in different ways. It has no carbon emissions, which helps utilities comply with stricter environmental rules and combat global warming. It also has a cost benefit. Even though the country is awash in shale gas and prices are at near-record lows, utilities remember that just a handful of years ago prices were five or six times what they are today. They don't want to depend too much on gas.
"We look at wind as a hedge for natural gas," said Eves. "So with some of these low-cost wind farms, that's the equivalent of locking in a $4.50 gas price for 25 years. It's an unbelievable hedge."

This highlights some of the things I was talking about yesterday. It would be interesting if the article went into a little more detail when it says the hydroelectric dam is powered by wind in a roundabout way.  I would assume that means they are using excess wind power to pump water into the reservoir, but they don't really say.  Anyway, in the Great Plains they are going to be generating a significant amount of electricity with wind turbines.

Big Ag's Losing Fight on Ethanol

Des Moines Register:

With billions of dollars of potential profit on the line, ethanol producers, corn growers and other groups know they have a tough road ahead and a limited window in which to change the thinking of the EPA and White House officials overseeing the mandate, known as the Renewable Fuel Standard. The law requires refiners to buy alternative fuels made from corn, soybeans and other products. The EPA proposal will be open to a 60-day comment period; the agency is expected to finalize the rule in the spring of 2014.
Biofuel producers have wasted little time trying to get their message through to the Obama administration. On Wednesday, just five days after the measure was made public, representatives of Growth Energy, the Renewable Fuels Association, ethanol maker Poet, the National Corn Growers Association and others met with Secretary of Agriculture Tom Vilsack, White House staff and EPA officials. The industry representatives underscored the damaging impact the proposal would have on the future of biofuels.
Vilsack said administration officials told the biofuels industry they remain committed to the renewable fuels requirement and “understand the importance of it” for offering consumer choice, creating jobs, reducing the country’s dependence on foreign energy and saving motorists money at the pump. The former Iowa governor said more needs to be done to expand consumer access to higher-grade ethanol blends such as E85, which includes 85 percent of the corn-based fuel.
Critics of the EPA proposal contend they must act to prevent a permanent shift in the way blend levels are determined. In the past, the EPA largely followed the annual level requirements put in place by Congress, helping to drive new markets and spur demand for the renewable fuel. The proposed reduction — a move even some in the oil industry have called substantive — would shift the process to one that sets the requirements based on expected market demand.

The ethanol mandate was bad policy growing out of diminishing conventional oil production and high gasoline prices.  The skew it has made in commodity prices fueled a farm land price bubble and has wreaked havoc in livestock production.  With shale oil production spiking, fuel economy improving and miles driven per licensed driver falling, Big Ag has run into a more powerful foe, Big Oil.  If I'm a betting man (and I am), I'd wager on Big Oil.