Will a "one stop shop" on climate change really make it easier for us to get accurate and up to date information?  Dr. Jane Lubchenco, head of the National Oceanic and Atmospheric Administration (NOAA), announced on February 8 that NOAA will set up the new Climate Service to operate in tandem with NOAA's National Weather Service and National Ocean Service. The Climate Service, and its new NOAA climate portal on the Internet used to collect a vast array of climatic data from NOAA and other sources, is intended to provide "one-stop shopping into a world of climate information," noted Lubchenco. The new agency will initially be led by Thomas Karl, director of the current National Climatic Data Center. I'm for anything that is intended to incorporate a longer view of climate than just watching the weather.  According to MSNBC, Lubchenco said she anticipates growth of private climate-related business around the new agency. No word on whether any job creation in this business would count as green jobs.  Visit http://www.climate.gov for more information.

Just days before the United Nations Climate Change Conference in Copenhagen, Denmark, the U.S. Patent and Trademark Office (USPTO) initiated the Green Technology Pilot Program on December 8, 2009 to expedite the examination of "green technology" patent applications. By offering the program, the USPTO hopes to accelerate the development and deployment of green technologies, help create green jobs, and promote U.S. competitiveness in the clean technology sector. In the press release announcing the Pilot Program, the Under Secretary of Commerce for Intellectual Property and Director of the USPTO, David Kappos explained "Every day an important green tech innovation is hindered from coming to market is another day we harm our planet and another day lost in creating green businesses and green jobs."

According to its own statistics, the USPTO takes on average 30 months to issue an initial office action for green technology patent applications and approximately 40 months to make a final determination on the patentability of such applications. In the normal process, applications are taken up for examination based on their filing date. Recognizing that over a three and half year wait is too long in the green technology sector, the Pilot Program provides a mechanism for green technology patent applications to be advanced, out of turn, to examination without having to pay any additional fees or provide any additional examination support documentation. The USPTO estimates that this Pilot Program will reduce the examination time of these applications on average by one year.

The Pilot Program broadly defines the term "green technologies" as technologies that pertain to environmental quality, energy conservation, development of renewable energy resources, or greenhouse gas emission reduction. Despite this broad definition, the USPTO currently requires that a patent application be classified in one of 79 specific U.S. patent classifications outlined in the Pilot Program to be eligible.

The Pilot Program only applies to non-provisional utility applications filed prior to December 8, 2009 that have yet to be examined. Applications that are either filed after December 8, 2009 or already being examined are not eligible for the Pilot Program. The Pilot Program is set to expire on December 8, 2010 and the USPTO only guarantees that it will accept the first 3,000 petitions to make an application special under the Pilot Program. Thereafter, the USPTO will evaluate whether the Pilot Program should be extended based on the USPTO's workload and available resources. Thus, time is of the essence for those wanting to take advantage of the Pilot Program.

While there are limitations on the number and type of claims that can be included in the application and a requirement that an applicant waive its right to object to a restriction requirement, the Pilot Program does provide an inexpensive mechanism to expedite the examination of a green tech patent application. Such an expedited examination can prove beneficial to those looking to enforce their patent rights as quickly as possible and/or those looking for funding options.

The Official Notice of the Pilot Program can be found at 74 Fed. Reg. 64666 (Dec. 8, 2009) (See http://www.uspto.gov/patents/law/notices/74fr64666.pdf ) and the USPTO Press Release for the Pilot program can be found at www.uspto.gov/news/pr/2009/09_33.jsp.

If you have questions about the Green Technology Pilot Program, you can contact Alex Forman or Bill Lyon, members of Ice Miller's Intellectual Property Group.

Day 8 - Monday, September 14
We attended the opening ceremony of the Midwest U.S.–Japan Association Conference.  Mitch Daniels is one of three U.S. governors who is attending this conference.  Governor Jennifer Granholm of Michigan and Governor Jim Doyle of Wisconsin are in attendance as well.  There are four Japanese governors participating.

Several members of the delegation were able to meet privately with a representative from Sony.  He discussed that Sony's top issues right now are quality and the environment.  He also discussed the increased need for universities and businesses to collaborate more; specifically pointing out excellent programs at Purdue and Rose-Hulman that would be of importance to Sony.  This representative is happy with their Indiana connections and feels that Indiana strives to keep the costs of conducting business in the state low.

Overall, Japanese business leaders are looking to expand relationships throughout Asia and not rely so heavily on the U.S. and Europe  The current economic conditions that the U.S. and Europe are facing have impacted Japan because of their market presence.

Over the weekend Governor Daniels announced that beginning in 2010 the Indiana State Fair will feature a different country each year.  Japan will be the first country featured.  Japanese exhibits will include performing arts, cuisine, interactive displays and educational opportunities.

Day 7 – Sunday, September 13
Today was the first opportunity the delegates had to do some sightseeing on their own.  Some of the delegates visited Japanese shrines but I decided to do a bit of shopping in the "fashion capital of the world!" 

The Ginza District of Japan features many of the world's best designer shops as well as smaller shops featuring hand painted stationery, paper, umbrellas and fans.  The Japanese culture emphasizes order and cleanliness.  For example, you must take your shoes off when entering a dressing room and put a cloth over your face to protect the clothes.  On escalators, you hear instructions on which side to stand and reminders to hold small toddlers.

This emphasis on order and cleanliness even translates to their public restrooms.  The toilet seats in public restrooms are heated and all the restrooms have bidets.  Restrooms are easy to find and are on located on every floor.  There is a special deodorizing spray and you hear a continuous flushing sound to protect your privacy. 

In Japan you'll find that many stores have a lot of customer service representatives to assist you. In one small section of a department store I found 3-4 representatives designated to help customers in just that one section.

The Japanese stores tend to only carry three sizes: small, medium and large.  In America, I usually wear an extra small but in Japan I'm a medium. Most of the Japanese women are very slender and all are about the same height.  You'll find very little obesity among the Japanese.

Today's weather, beautiful, clear and in the mid-70s (similar to our Fall), gave me an opportunity to observe interesting aspects of the Japanese culture.  Even in the summer many Japanese wear boots.  As in China, pale skin is preferred and many of the women carry umbrellas.  Japanese society is very disciplined.  The city streets are clean and people don’t dress as casually as they do in the U.S.  For example, you don't find many people wearing flip-flops.

Sunday Evening
In the evening we attended the gala reception for the Midwest U.S.-Japan Association Conference in Tokyo.   For nearly three decades, business leaders from the Midwest region of the U.S. and Japan have met on an annual basis to discuss the growth and progress of economic relations of the American Midwest and Japan.  The Midwest U.S.-Japan Association is comprised of ten member states including Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio and Wisconsin.   Membership in the Japan-Midwest U.S. Association is comprised of corporations that have direct economic ties to Japan or are interested in developing them.  The association has some 100 corporate members including Toyota Motors, Mitsui & Co., Saison Group, Sumitomo Chemical, Kajima Corporation, and Sony.  The associations reinforce the economic, political and cultural ties that link the national economy of Japan with the regional economy of the Midwest.

Day 6 – Saturday, September 12
We traveled by bullet train to Tochigi Prefecture, Indiana's sister-state in Japan.  The bullet train was very comfortable and is an extremely efficient mode of transportation for the Japanese.  The train is low energy, low noise, seats a very high capacity of passengers and is easy to maintain.  The Japanese culture emphasizes order and you see that in their transit system.  Their average delay is less than one minute.  Everything is on time and there are no last minute changes.  Seventy-two percent of transportation is done on these bullet trains in Tokyo central and 56 percent in metro Japan.

When we arrived we attended a ceremony to celebrate the 10th anniversary of the sister-state agreement by planting a tulip tree, the official state tree of Indiana, in the central park of Tochigi.  This park is beautiful with many fountains and tulip trees.  The Japanese mentioned that the relationship between Tochigi and Indiana was fate.  Tulip trees were planted in this park 15 years before we became sister states and they feel there is strong significance in the fact that the tulip tree is Indiana's state tree.  These goodwill gestures were further endorsed by the fact that it was a rainy afternoon, but the clouds broke just as the planting ceremony began.

After the tree planning ceremony, we attended the 10th Anniversary Commemorative Symposium at the Tobu Hotel.  Over 100 Japanese government and business leaders attended this event.  Governor Fukuda, the governor of the Tochigi Prefecture, expressed his appreciation and his view of the importance of the delegation coming to Japan.  Personal connections are very important to the Japanese and these face-to-face visits are crucial to successful relationships.

After thy symposium, we attended a reception for the Indiana delegation which was hosted by Fukuda.  We were able to witness the tradition of the "breaking of the barrel."  Six Japanese officials broke a barrel, filled with Saki, with wooden hammers.

An interesting observation that I've made is that many of the roofs in Japan are "green."  The tops of the buildings have grass, trees and bushes.  Not only is this great for their environment, but it is a way for the Japanese to have yards in an area that is highly populated.

Our trip to China was a big success.  It was important for Indiana leaders to visit this country face-to-face and show the sincere interest in enhancing and creating business ties.  The size and scope of the delegation seemed to go a long way in making an impact during our meetings.

An influential Chinese businessman still has a token of Governor Orr's trip to China over 20 years ago sitting on his desk.  It was the last trade mission trip an Indiana governor made to China.  The importance of Indiana making this trip again shouldn't be ignored.

In addition to the wealth of economic and business benefits we've been able to establish, I have truly enjoyed observing and participating in many aspects of the Chinese culture.  As I mentioned in a previous post, tea is one of the traditions I have enjoyed learning more about.  Every place we visited in China served us tea.

During this trip, we were able to visit a vineyard-like grower of tea.  You can buy tea, taste tea, shop for anything tea related from tea pillows, to tea candy and tea marshmallows.  Anything you want in tea, they sell.

There are many aspects of the tradition of Chinese tea.  Some that I found especially interesting are:
• It takes eight hours to make two pounds of tea leaves.
• The entire procedure must be done by hand; no machines.  The Chinese believe the only way to make things well is by hand.
• If you have too much tea that is too strong, you can get "tea drunk," which is similar to alcohol drunk, where you can get a headache, a stomachache and generally don't feel very well.
• They have a tea ceremony similar to wine, where you shake it and smell it.
• There is a special way to hold your cup when you're drinking tea.  You hold the cup with your right hand and put your left hand under the bottom of the cup. 
• China does not export their highest quality tea because there's not much of it and it's incredibly expensive. 

Three common types of tea are black tea (where the tea leaves are totally fermented), green tea (where the tea leaves are not fermented at all) and oolong (which is semi-fermented).  All three have different tea plants and fermentation processes. White tea is a special variety of unfermented green tea.  Chamomile tea is considered an herb, it is not a tea.  You serve different teas at different times.  For example, black tea is in the morning and green tea is after eating.

Green tea is very low in caffeine; black tea has eight times more caffeine than green tea.  You can tell good tea by the color of the leaves and the size of the leaves.  The lighter the color and younger the leaves the better the tea.  Also, the smaller the leaves and stronger the smell the better the tea.

We were able to participate in a tasting.  They put a few tea leaves in our glasses, added a tiny bit of water, we smelled it and then swirled it around in the glass.  They then added additional water.  When they pour the water into the tea glass, the woman pouring the tea flicks her wrist three different times, very high up above the glass.  If she doesn't spill a drop of water it means you are warmly welcomed.

A very common way of saying "thank you" in Chinese tea ceremonies, business matters and in the general culture is to take your forefinger and your middle finger and hit them against the table three times. 

The Chinese don't put milk in their tea.  Milk is only for English tea, because English tea is bitter.  Green tea should be served hot or room temperature.  To slurp your tea is completely unacceptable and if you do slurp you're called a "buffalo drinker."

Chinese tea is loose.  They don't use tea bags or a strainer, so you have to manipulate drinking the tea so as not to swallow the leaves.  They always have tops to the teacups to keep it warm and it's served with washcloths in order to wash your hands.  According to the Chinese, tea bags show the worst quality of tea.  It's considered tea dust.  They compared it to drinking instant coffee.

Day 3 - September 9, 2009 – Traveling to Hangzhou

I was really looking forward to traveling by train to Hangzhou and I was not disappointed.  It was a great opportunity for me to learn more about the Chinese culture and see more of China's beautiful landscape.

Hangzhou is in the Zhejiang Province located about 112 miles southwest of Shanghai.    Hangzhou has a population of over 6 million people, which is small by Chinese standards, and has a beautiful fresh water lake called West Lake.  West Lake is surrounded by mountains on three sides and is very well known in China.

Many Chinese homes, especially in farm villages, have temples on top of them to pay homage to their ancestors.  Ancestry and history play a large part of the Chinese culture and the temples are another example of these influences.

I also thought it was interesting, that unlike the U.S., Chinese grooms and their families pay for about 80 percent of the cost of their weddings.

It is early in the day of September 9, 2009 – 9/9/09 – and 9 is a very lucky number in the Chinese culture.  If fact, the Chinese celebrate the ninth second, of the ninth minute, of the ninth hour, of the ninth day, of the ninth month of the ninth year.  The luck of nine did not rub off on the number four in this culture.  Four is considered very unlucky, similar to the U.S. perception of the number 13.

I look forward to reporting more about this day's events in tomorrow's blog.

September 8, 2009 - Day 2

We spent the first part of our day with the American Chamber of Commerce for a discussion on "green collar" jobs.  Chinese carbon emissions are escalating and China has seven of the 10 most polluted cities in the world.  As a result, environmental protection has become more important to the Chinese.

Later in the day we traveled to Eli Lilly's facility at the Pudong Science Park.  Lilly has over 2,000 employees in China, which means China has the second largest Lilly operation in the world.  Pudong is one of Shanghai's newest districts with a focus on three main industries: life sciences, software and integrated circuits.

Some of us were also able to visit ShangPharma.  ShangPharma provides research services to pharmaceutical and biotech companies.  They currently have over 1,600 scientists.  An interesting question was raised about how intellectual property is protected for the company and its clients.  The uncertainty of intellectual property protection is not isolated to just ShangPharma.  It is an issue that China is addressing as a country.

Following these visits we had a traditional Chinese lunch that was again served on a lazy Susan.  There were six different courses that included duck, shrimp, squid, scallops, fresh vegetables, jellyfish and fried rice.  Beer and wine were again offered.  Chinese meals are traditionally very  large.  I was curious how the society remains so thin.  Meal preparation seems to hold the answer.  They use vegetable oils and other "waist friendly" and heart healthy preparation methods.

The day concluded with a Friends of Indiana reception.  Guests included companies that have a business connection to Indiana or have an interest in doing business in Indiana.  Eli Lilly, Cummins and Alison Transmission all attended.

I'm really looking forward to traveling by train to Hangzhou tomorrow.  It will be a great opportunity for me to see some of the rural parts of China and its landscape.

Incentives are on the rise for businesses to provide "green" products and services.  Many consumers are willing to pay a premium for products that are environmentally friendly, and businesses have taken notice.  Buzzwords such as "organic," "recyclable" and "hybrid" are used to distinguish a product from its competitors.  Even the government has increased its focus on encouraging companies to provide environmentally friendly products and services by offering a wide array of tax incentives available to companies and consumers.  It is not surprising that many companies have responded to these incentives by embarking on green marketing campaigns.

However, companies engaged in green marketing are not only increasing their profits, but also their risk.  Lawsuits and class actions accusing companies of "greenwashing" - marketing the environmental friendliness of a company's product in a false or misleading way - have sprung up across the nation.  These lawsuits have been filed against companies in a variety of industries and trades, including construction companies, retailers, automakers, candy makers and manufacturers of cleaning supplies.

In addition to these consumer actions, the Federal Trade Commission (FTC) has also increased its scrutiny of green marketing.  In June 2009, the FTC filed suit against Kmart, Tender Corporation and Dyna-E International for making false and unsubstantiated claims that their products were biodegradable.  The FTC alleged that these claims did not conform with environmental marketing guidelines contained in the "Green Guides," a set of regulations used by the FTC to determine whether a company's environmental marketing constitutes consumer fraud.  A revised version of these guides will be released later this year and will address the changes and growth in green marketing over the past ten years.

Although green marketing is a potentially invaluable tool, companies should ensure that they understand and minimize the risks that are associated with its use.  For further information regarding green marketing and ways to manage its risk, please contact Michael McNally or Jacob Cox in Ice Miller LLP's Competitive Business Practices Litigation Practice Group and members of the Firm's Green Industries Initiative.

Blog was written by Paul Jones, partner in the Tax Practice Group and member of the Firm's Green Industries Initiative.

Nearly five months after the enactment of the American Recovery and Reinvestment Act, the U.S. Department of the Treasury and the U.S. Department of Energy (DOE) today announced a multi-billion dollar program for the development of renewable energy projects.  The Act extended and modified tax credits for renewable energy projects in a manner intended to make such projects more financially feasible during the current economic downturn.  The Act authorized the Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009.

Under the new program, businesses may elect to forgo renewable energy tax credits in return for an immediate reimbursement of a portion of qualified expenses.  The cash in lieu of credit program is intended to provide immediate stimulus in local economies, and guidance is now available for businesses to elect direct payments in lieu of tax credits in support of renewable energy facilities.  According to their press release, the Treasury and DOE estimate that the cash in lieu of credit program will support 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities.  While applications are not yet being accepted, businesses interested in applying for the new program should start preparing now to seek the cash grants.

Businesses considering the election of cash in lieu of credits should carefully consider not only the requirements of the program, but also the tax consequences of the election as it may impact the overall economics of the project.

U.S. Secretary of Agriculture Tom Vilsack made a tour through Indiana on June 3, primarily to tout the Obama administration’s plans to rebuild and revitalize rural America.   He made three stops in Indiana: Terre Haute, Indianapolis and Danville.  The most interactive of the stops for Indiana residents was in Danville, where the secretary held a forum (part of USDA's Rural Tour) to collect ideas and comments from local residents on how best to revitalize the rural economy.

Vilsack outlined the goals of the American Reinvestment and Recovery Act – providing  assistance to struggling families; investing in the nation’s transportation system; and building “green collar” jobs.  He acknowledged that families are struggling because of the economic crisis.  In rural areas, Vilsack pointed to a few specific areas of relief provided by the stimulus funds, including infrastructure in watershed areas to reduce flooding and promotion of renewable energy production to revitalize local economies.

Rural community residents, ag organization and business leaders in attendance asked the secretary questions on a variety of topics… the struggle to feed a growing world population, the regulatory environment and wind energy issues were just a few.  Another topic though dominated the conversation and also provide the insight into the administration's priorities in agriculture – structural changes in U.S. agriculture and USDA's plans for assisting small farmers.

This has been a recurring theme for Vilsack following the release of the 2007 Census of Agriculture.  Referencing three different segments of producers ("large" farms that produce 75 percent of the nation's output; mid-sized farms and small farms), the secretary outlined priorities primarily for the latter two groups.

Mid-sized farms, he noted, are decreasing in number because they are either being purchased by larger farming operations or are dissolved because they are no longer able to compete in the industry.  USDA and other federal programs will promote job creation in local areas to provide alternative job opportunities for those farmers.

Small farms, on the other hand, are a growing segment and one that USDA will attempt to help more because of the "job opportunities they create in rural America."  How will USDA help these smaller operators?

1. Expansion  of the beginning farmer program
2. Connecting local consumers and local producers to establish more market opportunities for farm products. 
3. Expanded conservation programs will help farmers more efficiently use their land.
4. Increased focus on biofuels,  expanded trade, and climate friendly programs will also create more opportunities for small farmers.

These comments provide much needed reassurance and promises of support to rural communities hard hit  by the current economic downturn.  At the same time, they also foretell a significant shift in USDA focus and programming away from the largest, most productive farms to smaller farms seeking more localized expansion opportunities.  It is still early in this administration's term and so difficult to predict precise directives or outcomes, but it is clear that Vilsack has yet to waver from this theme and these new priorities.

As expected, the United States Congress passed and the president signed into law, sweeping economic recovery legislation that expands existing, and establishes new, tax incentive programs to promote clean technology, renewable energy and green jobs.  The legislation also provides businesses tax relief in certain areas.

Read the entire alert on tax relief to promote clean technology and renewable energy.

Indiana Department of Environmental Management, DieselWise Indiana  - Application Deadline is May 15, 2009

The DieselWise program is grant availability for projects designed to significantly reduce diesel emissions across Indiana.  The total estimated funding for this competitive grant opportunity is in excess of $2,000,000.  DieselWise Indiana anticipates awarding cooperative agreements from this announcement ranging from $25,000 to $250,000, subject to availability of funds and the quality of proposals received.  Additional funds may be available in the near future.  Project proposals submitted under this grant announcement may be awarded for funding from these additional funds.  Preference will be given to applicants that are willing to provide a financial match and/or in-kind match, provide actual historic idling hours pre-installation and post installation of idle reduction technologies, along with a commitment to maximize the use of any installed diesel emission reduction technology.  Information can be found at http://www.in.gov/idem.5255.htm

USEPA Small Business Innovation Research Program - Solicitation closes May 20, 2009

The U.S. Environmental Protection Agency’s (EPA) Small Business Innovation Research Program supports small businesses in developing new environmental technologies.  The EPA anticipates the total funding that will be available for Phase I projects issued under this announcement will be $1.8 million. A total of $70,000 is available in funding for each EPA Phase I award. Recipients of Phase I awards will be eligible to compete for a much larger (up to $295,000) two-year Phase II award. Companies with fewer than 500 employees are eligible.  Solicitation closes May 20.

SBIR Phase I green building materials and systems research topics are:

• Building Materials and Site Management
• Energy and Indoor Environmental Quality
• Water Use and Management

HUD Brownfields Economic Development Initiative Funds - Application Deadline June 16, 2009
 
The Department of Housing and Urban Development (HUD) published a notice of availability of $20 million in Brownfields Economic Development Initiative (BEDI) funds (74 FR 20494) on May 4.  David Kaminsky, who works on development grants in HUD's Office of Economic Development, said the funds will be awarded competitively, and individual grants are capped at $2 million. BEDI grant funds are targeted for use in redeveloping brownfield sites as part of larger urban economic development projects, according to HUD. Brownfields are underutilized, abandoned or vacant sites where expansion or redevelopment may be burdened by confirmed or suspected environmental contamination, according to HUD. Kaminsky said BEDI grants must be used in conjunction with a new guaranteed loan under Section 108 of the Housing and Community Development Act. Section 108 is the loan guarantee provision of the Community Block Grant Program administered by HUD. The application deadline is June 16. The funds are coming from fiscal year 2008 and fiscal year 2009 appropriations, according to HUD. See http://www.hud.gov/offices/cpd/economicdevelopment/programs/bedi/funding09/index.cfm.

Modern agriculture is affected by more than just traditional farm policy - in other words, the statutes and programs that offer financial supports and incentives for production agriculture.  Today, new and changing policies and regulations require different strategic and business planning considerations.  Agriculture policy now is inextricably linked to rural, energy, trade, climate change, nutrition, transportation and infrastructure policies not to mention food safety, financial services and environmental regulations. 
 
This increasingly important set of policy priorities coupled with a new political administration in Washington, D.C. with a strong will to act suggest that the agriculture industry be prepared for something other than the status quo.  In just the last few weeks, several announcements and actions that connect the Environmental Protection Agency (EPA), the US Department of Agriculture (USDA), the Congress, the court system and the agriculture industry support this view. 
 
Consider the following:
 
1.  EPA's greenhouse gas endangerment finding  After a thorough scientific review ordered in 2007 by the U.S. Supreme Court, the EPA issued last week a proposed finding that greenhouse gases contribute to air pollution that may endanger public health or welfare. The gases in question are: carbon dioxide, methane, nitrous oxide, hydro fluorocarbons, per fluorocarbons and sulfur hexafluoride. 
 
As the proposed endangerment finding states, "in both magnitude and probability, climate change is an enormous problem. The greenhouse gases that are responsible for it endanger public health and welfare within the meaning of the Clean Air Act."  The report continues, "the science clearly shows that concentrations of these gases are at unprecedented levels as a result of human emissions, and these high levels are very likely the cause of the increase in average temperatures and other changes in our climate." 

Many industries send out warning signals at the first sign of "over-regulation" and agriculture is no exception.  This specific finding is a slippery slope for agriculture - especially the livestock industry that could be subject to new permit requirements for structure construction or modification and ultimately naturally occurring methane emission fees per animal to the tune of $175 per dairy cow, $87.50 per beef cow and $21.87 per hog (according to the American Farm Bureau Federation).  

In response, Nebraska Senator and former Secretary of Agriculture Mike Johanns has co-sponsored legislation that would protect animal agriculture from any greenhouse gas regulations promulgated by EPA.  Citing the significant economic value his state reaps from commercial red meat production, Johanns suggests this "cow tax" could cost Nebraska's farmers and ranchers tens of thousands of dollars per farm per year.
 
Before the finding takes effect, EPA is required to hold it open for public comment for 60 days and then issue proposed regulations which again would be subject to a public comment period. So EPA’s “deliberative process” could take another two years or more. Meanwhile, last week's announcement will increase pressure on Congress to move ahead on climate change legislation.

2.  Comprehensive climate change legislation  Climate change is near the top of the legislative agenda. In the Senate, Energy and Public Works Committee Chairman Barbara Boxer (D-CA) says she’ll do her best to work with anyone who seeks to move legislation quickly.  The House Energy and Commerce Committee is holding hearings now on a draft released by Chairman Rep. Henry Waxman (D-CA) and Rep. Ed Markey (D-MA) that proposes a mandatory cap-and-trade system to reduce greenhouse gas emissions.

The House Agriculture Committee wants a seat at the table on climate change, too. Committee staffers are currently reviewing stakeholder responses to a 29-question survey regarding the role of agriculture and forestry in a carbon reduction program. The input will be used in “crafting principles that could be part of any subsequent legislation,” explained Ag Committee Chairman Collin Peterson, who says the panel will launch its own hearings on the issue in the next few weeks.

3.  EPA does not appeal court decision on pesticide applications  The U.S. Justice Department recently announced it will not appeal a federal court decision that could eventually require farmers to seek permits from the EPA for all pesticide applications and open the door to citizen lawsuits.  The U.S. Court of Appeals 6th Circuit issued the decision on the case, National Cotton Council vs. EPA, in January, nullifying an earlier EPA ruling that allowed chemical applications to be regulated under existing federal pesticide regulations. Instead, the pesticides applied in or near waterways will now be classified under the Clean Water Act. The change, if allowed to stand, carries significant implications for agriculture as a user of pesticides unable to completely control runoff caused by rainfall. 

A wide range of other beneficial pest control activities could be subjected to lawsuits from activists claiming that the use of pesticides is prohibited under the Clean Water Act unless authorized by permit.  This is of great concern to mosquito control officials and pest managers for forests, recreational waterways, irrigation canals and parks. 

In a March 6, 2009 letter, Agriculture Secretary Tom Vilsack asked EPA Administrator Lisa Jackson to seek a rehearing and request reversal of the 6th Circuit's decision. Senate Agriculture Committee Chairman Tom Harkin, (D-IA) and Ranking Member Saxby Chambliss (R-GA) weighed in with a similar letter.  But those requests were rebuffed, and the EPA has indicated they would be requesting a two-year implementation plan for the ruling. 

4.  EPA seeks public comment on raising the ethanol blend level to E15  EPA's broad reach into agriculture also is evident in its renewable fuel mandate authorities.  EPA is currently seeking public comment on a waiver application submitted by representatives of the ethanol industry to authorize up to 15 percent ethanol blends with gasoline.  The 30-day comment period will run through at least May 20, 2009. By law, the EPA is required to grant or deny the request no later than December 1, 2009.  Since 1978, the limit has been a 10 percent volume ethanol blend (E10) for conventional (non flex-fuel) vehicles.

According to the EPA release, the applicants contend that increasing the blend rate is needed to bring greater investment to next generation biofuels technologies and commercialization.  And the higher blend rate is arguably critical to fulfilling the 2007 Energy Independence and Security Act's renewable fuel mandates.  Opponents (typically environmental and consumer groups and small engine and car manufacturers) counter that the increased blend rate might damage pollution control equipment, reduce air quality, and undermine vehicle and equipment performance and warranties.

5.  New environmental and climate position at USDA   Agriculture Secretary Vilsack announced last week the creation of a new environmental and climate position in his inner office.  Robert Bonnie will serve as Senior Advisor to the USDA Secretary for Environment and Climate.   Referencing that two out of the three key goals of President Obama for USDA are tied to the environment, Vilsack will rely on Bonnie to help guide broad natural resource and climate policy and program decisions.  Bonnie has worked for the Environmental Defense Fund (EDF) for over 14 years with extensive experience in carbon credit programs and conservation initiatives for endangered species.

Independently, each of the above should be important to agriculture, but taken collectively they are evidence of an intensifying regulatory landscape for the industry.  Every part of agriculture - from crop and livestock production, food processing and manufacturing to alternative energy production - is affected by these developments.  Increasingly, EPA will be shaping environmental and climate policy that directly affects agriculture.  Climate change legislation and related programs will be developed and implemented - it's not a matter of if, but when and what form.  Agriculture must communicate with the new political and policy leaders, engage in the policy formation and influence more beneficial rather than harmful outcomes for the industry.
 

The American Recovery and Reinvestment Act (ARRA) is being scrutinized on every level, and the overall assessment is that the bill is good for green.  From production tax credits to grants, weatherization to infrastructure investment, money is there to be received but you have to work quickly, and through the proper processes, to receive the funding.  Watch for tight timelines and meet the dates!

Some programs are being implemented by the Department of Energy.  On Thursday Energy Secretary,  Steven Chu, announced he intends to streamline the process by which the Energy Department distributes funding, with the goal of dispersing 70 percent of its funds from the ARRA by the end of 2010.  He is naming Matt Rogers as a senior adviser to implement the new department reforms which include rolling out appraisals of applications for loan guarantees, rather than waiting for the application deadline to evaluate them.  He said that the loan application forms will be simplified and the department will speed up loan underwriting by using outside partners.  The Treasury Department is also tasked with crafting regulations to implement the stimulus funding.

Specifically for Indiana, you should know the process for the:

Indiana Brownfields Program - Contact a Petroleum Remediation Grant consultant in your region.  A potential project list will be compiled by March 4, 2009. Right now the list is focused on petroleum contaminated sites, however the program may be able to open site consideration to hazardous substances as well.

Indiana State Revolving Fund - Drinking Water and Wastewater programs.  The Indiana Finance Authority (IFA) will be provided approximately $94 million to fund wastewater infrastructure projects and about $26 million to fund Drinking Water infrastructure projects.  The IFA created the SRF Loan Program Recovery Loan and Grant Program.  All standard SRF Loan Program requirements apply. Fixed rate loans (20- year terms) and grants are available.  Make sure that your community has completed a Preliminary Engineering Report and have it filed with the SRF Loan Program by March 13, 2009.

As always think about where the remainder of the financing is going to come from.  For instance, if you are applying for the 30 percent Department of Energy grant for eligible wind, biomass, geothermal and solar plants, make sure that you have a plan in place to fund the remaining 70 percent.  Start talking with your investment and private equity team to craft the entire package.

Commentary from Beth Bechdol, Director of Agribusiness Strategies, Attending USDA's 85th Annual Agricultural Outlook Forum

The attitudes of attendees at this year's agricultural outlook conference are concerned, cautiously optimistic, curious, hopeful and even discouraged.  In other words....extremely mixed!
 
The annual event which provides industry leaders with market and commodity outlooks, but also insight to emerging policy developments, was a must-attend this year because new leaders stepped out further onto the public stage...  Director of the National Economic Council and Assistant to the President for Economic Policy Lawrence Summers and Secretary of Agriculture Tom Vilsack.
 
Summers opened the conference with a description of the Obama  administration's two economic policy thrusts - a direct strengthening of the economy through job creation and the stimulus package and ensuring renewed financial stability in the credit, housing and banking systems.  He described today's recession as one of those "vicious cycles" that occurs just a few times in a hundred year period when the market's self-equilibrating fuction breaks down.  It is the  president's view, Summers noted, that the "profoundly important investments" being made in the stimulus package will help "restore the US economy's potential to produce and earn."
 
Secretary Tom Vilsack was next with a message obviously more tailored to agriculture.  Without prepared remarks, he eloquently outlined priorities for the Department and also key strategies he intends to pursue.   He told us that President Obama personally directed the Secretary to focus on three areas:  1.  ensure that children have more access to nutritious foods; 2.  expand alternative energy opportunites; and 3.  support research that allows agriculture to transition away from its own fossil fuel dependence.
 
Then, recent events added two more priorities for the Secretary...the salmonella find in peanut butter elevated food safety and the economic recession and stimulus package provisions will require USDA to quickly deliver $28 billion in nutrition and rural development programs especially.
 
The recently released 2007 Ag Census also clearly had an impact on the Secretary's thinking and strategic focus for agriculture.  He highlighted several findings from the "snapshot" of U.S. agriculture including the dramatic increase in small income farms (108,000 new small farms in the last five years); an increase in the very large farms such that today the 125,000 largest farms produce 75 percent of all our food; and finally the decline by 80,000 farms in the mid-size range.
 
It was no surprise, then, that the strategies defined by the Secretary were specifically referenced as "helping small to mid-sized farms."  They included: 

1. Helping small farms (many of which are specialty crop producers) become mid-sized farms by encouraging more consumption of fruits, vegetables, and nuts
2. Improve the safety and security of the food system
3. Rebuild and revitalize rural communities
4. Develop more renewable and alternative energy opportunities for agriculture
5. Enhance conservation stewardship programs

Large farms were not completely excluded from the plan, however.  Vilsack referenced the benefits that would accrue to this segment from science and research investments, trade promotion and also climate change profit opportunities.
 
He closed by noting that this "complicated agenda" was "complicated further by the financial situation," and that the "ag budget has to be a part of making hard choices" to attack the federal budget debt.   At the same he was delivering these comments, across town at another press event, the Obama budget proposal was released.  It should have been no surprise to industry observers who have listened closely to President Obama that the budget proposes a phase out of direct payments to large farms - payments that have for decades been a part of the farm "safety net".  In fact, it was just days ago in his address to Congress that the  president said he would look for wasteful items in the budget to cut including "large payments to agribusinesses."

Agricultural policy has long been viewed as a massive ship which required much strength and time to even begin steering on a new course.  We should all watch closely the new captains at the decision-making helm - the new direction may come more quickly than many in agriculture had planned or hoped for.

"Green" projects and programs may be another way the federal government is hoping to pull the struggling economy out of the red.  The bill provides for billions of dollars of tax relief for qualifying energy and climate change projects through changes in the renewable energy tax credits, the Department of Treasury renewable energy grant program and energy and transmissions appropriations.

Read more about the impact on renewable energy and green projects.

Blog written by Paul Jones.

Tax Provisions in the American Recovery and Reinvestment Act Provide Relief to Taxpayers and Promote Clean Technology and Renewable Energy
As expected, the United States Congress passed, and last week the President signed into law, sweeping economic recovery legislation that expands existing, and establishes new, tax incentive programs to promote clean technology, renewable energy and green jobs.  The legislation also provides businesses tax relief in certain areas.

Read the entire alert about the American Recovery and Reinvestment Act.

The American Recovery and Reinvestment Act (ARRA) is being scrutinized on every level, and the overall assessment is that the bill is good for green.  From production tax credits to grants, weatherization to infrastructure investment, money is there to be received but you have to work quickly, and through the proper processes, to receive the funding.  Watch for tight timelines and meet the dates!

Some programs are being implemented by the Department of Energy.  On Thursday Energy Secretary,  Steven Chu, announced he intends to streamline the process by which the Energy Department distributes funding, with the goal of dispersing 70 percent of its funds from the ARRA by the end of 2010.  He is naming Matt Rogers as a senior adviser to implement the new department reforms which include rolling out appraisals of applications for loan guarantees, rather than waiting for the application deadline to evaluate them.  He said that the loan application forms will be simplified and the department will speed up loan underwriting by using outside partners.  The Treasury Department is also tasked with crafting regulations to implement the stimulus funding.

Specifically for Indiana, you should know the process for the:

Indiana Brownfields Program - Contact a Petroleum Remediation Grant consultant in your region.  A potential project list will be compiled by March 4, 2009. Right now the list is focused on petroleum contaminated sites, however the program may be able to open site consideration to hazardous substances as well.

Indiana State Revolving Fund - Drinking Water and Wastewater programs.  The Indiana Finance Authority (IFA) will be provided approximately $94 million to fund wastewater infrastructure projects and about $26 million to fund Drinking Water infrastructure projects.  The IFA created the SRF Loan Program Recovery Loan and Grant Program.  All standard SRF Loan Program requirements apply. Fixed rate loans (20- year terms) and grants are available.  Make sure that your community has completed a Preliminary Engineering Report and have it filed with the SRF Loan Program by March 13, 2009.

As always think about where the remainder of the financing is going to come from.  For instance, if you are applying for the 30 percent Department of Energy grant for eligible wind, biomass, geothermal and solar plants, make sure that you have a plan in place to fund the remaining 70 percent.  Start talking with your investment and private equity team to craft the entire package.

Blog written by Paul Jones.

Congress is in the process of passing economic recovery legislation that would (if enacted) expand existing, and establish new, tax incentive programs to further those goals.  Specifically, the American Recovery and Reinvestment Tax Act (the Act) contains several provisions that would provide expanded or additional sources of funds for green projects.  If enacted in its current form, the Act would, among other things:

• Establish a 30% credit for investment in facilities that manufacture advanced energy property;
• Extend Code Section 45 renewable energy production tax credits by increasing the placed in service date for three years (through 2012 for wind and 2013 for other qualified facilities);
• Allow temporary election to claim 30% investment credit under Code Section 48 in lieu of the Code Section 45 production tax credit; and
• Expand the volume for Clean Renewable Energy Bonds (CREBs); and
• Expand the volume for the recently established Qualified Energy Conservation Bonds (QECBs), which like CREBs, are tax credit bonds.

The Act contains several other provisions, including those that would expand the New Markets Tax Credit program, revise certain tax-exempt bond limitations, and provide relief for cancellation of debt income.

Read the full text of an Ice Miller alert which contains more details on the points above.

According to the summary of the American Recovery and Reinvestment Bill by the Committee on Appropriations (Obey, D-WI, Chair) action, and action now, is needed to pull the economy out of a "crisis not seen since the Great Depression." The bill contains targeted efforts to have clean, efficient American energy, summarized by the Committee as:

CREATE JOBS WITH CLEAN, EFFICIENT, AMERICAN ENERGY
To put people back to work today and reduce our dependence on foreign oil tomorrow, we will make investments aimed at doubling renewable energy production and renovate public buildings to make them more energy efficient. America’s energy shortcomings present a huge opportunity to put people to work in ways that will transform our economy.

• Reliable, Efficient Electricity Grid: $11 billion for research and development, pilot projects and federal matching funds for the Smart Grid Investment Program to modernize the electricity grid making it more efficient, secure and reliable and build new power lines to transmit clean, renewable energy from sources throughout the nation.
• Renewable Energy Loan Guarantees: $8 billion for loans for renewable energy power generation and transmission projects.
• U.S. General Services Administration (GSA) Federal Buildings: $6.7 billion for renovations and repairs to federal buildings including at least $6 billion focused on increasing energy efficiency and conservation. Projects are selected based on GSA’s ready-to-go priority list.
• Local Government Energy Efficiency Block Grants: $6.9 billion to help state and local governments make investments that make them more energy efficient and reduce carbon emissions.
• Energy Efficiency Housing Retrofits: $2.5 billion for a new program to upgrade HUD sponsored low-income housing to increase energy efficiency, including new insulation, windows and furnaces. Funds will be competitively awarded.
• Energy Efficiency and Renewable Energy Research: $2 billion for energy efficiency and renewable energy research, development, demonstration, and deployment activities to foster energy independence, reduce carbon emissions and cut utility bills. Funds are awarded on a competitive basis to universities, companies and national laboratories.
• Advanced Battery Loans and Grants: $2 billion for the Advanced Battery Loan Guarantee and Grants Program, to support U.S. manufacturers of advanced vehicle batteries and battery systems. America should lead the world in transforming the way automobiles are powered.
• Energy Efficiency Grants and Loans for Institutions: $1.5 billion for energy sustainability and efficiency grants and loans to help school districts, institutes of higher education, local governments and municipal utilities implement projects that will make them more energy efficient.
• Home Weatherization: $6.2 billion to help low-income families reduce their energy costs by weatherizing their homes and make our country more energy efficient.
• Smart Appliances: $300 million to provide consumers with rebates for buying energy efficient Energy Star products to replace old appliances, which will lower energy bills.
• GSA Federal Fleet: $600 million to replace older vehicles owned by the federal government with alternative fuel automobiles that will save on fuel costs and reduce carbon emissions.
• Electric Transportation: $200 million for a new grant program to encourage electric vehicle technologies.
• Cleaning Fossil Energy: $2.4 billion for carbon capture and sequestration technology demonstration projects. This funding will provide valuable information necessary to reduce the amount of carbon dioxide emitted into the atmosphere from industrial facilities and fossil fuel power plants.
• Department of Defense Research: $350 million for research into using renewable energy to power weapons systems and military bases.
• Alternative Buses and Trucks: $400 million to help state and local governments purchase efficient alternative fuel vehicles to reduce fuel costs and carbon emissions.
• Industrial Energy Efficiency: $500 million for energy efficient manufacturing demonstration projects.
• Diesel Emissions Reduction: $300 million for grants and loans to state and local governments for projects that reduce diesel emissions, benefiting public health and reducing global warming. This includes technologies to retrofit emission exhaust systems on school buses, replace engines and vehicles, and establish anti-idling programs. 70% of the funds go to competitive grants and 30% funds grants to states with approved programs. Last year EPA was able to fund only 27% of the applications received.

See the entire Committee on Appropriations summary. We'll all be watching Congress as they consider the bill in the next few weeks and its environmental and green provisions. Stay tuned for action!

Or so said John Doerr at the U.S. Senate Committee on Environment & Public Works briefing titled, "Investing in Green Technology as a Strategy for Economic Recovery."  The noted venture capitalist, a partner at Kleiner Perkins Caufield & Buyers, urged Chairman Barbara Boxer (D-CA) and the committee to encourage the enactment of vital policies to ensure speed and scale in addressing green technology.  Advocating for a unified national smart grid and a price on carbon/carbon emissions, among other policy objectives he identified as vital, Mr. Doerr stressed that the United States must account for the cost of emitting greenhouse gases.  Stating that, "battery-breakthrough's are the holy grail of greentech," Mr. Doerr cautioned that ingenuity and entrepreneurship must be fostered and developed domestically so that the United States is not left in the dust of its global competitors.  Mr. Doerr's remarks followed the introduction by Tom Friedman, author of Hot, Flat and Crowded: Why We Need a Green Revolution, who in colorful terms described the need to simulate massive innovation by a price signal.  Mr. Friedman did not advocate for a mechanism but prescribed that it must be accurate in speed, scope and scale.   After all, he reminded the panel, Green IS the new Red, White and Blue.  For a full replay of the hearing, go to http://epw.senate.gov/public/ under the "majority" page and view the recent webcast.

President-elect Barack Obama's appointments for key environmental and sustainability posts are getting mixed reviews.  Commentators are varying from saying this is a "sea-change" from the Bush postings to noting that the appointments are seasoned government insiders. The green team includes:
 
Energy Secretary - Steven Chu, professor of physics and molecular and cell biology at UC Berkeley and director of the Lawrence Berkeley National Laboratory. Mr. Chu's appointment signals a focus on science by the administration, but some have noted that he does not have the political credentials to be effective. Having called coal "his worst nightmare," Midwestern states like Indiana will have to closely follow his coal policy and his stated interest in cap-and-trade regulation.
 
Assistant to the President for Energy and Climate Change (Energy "Czar") - Carol Browner, former EPA administrator.  Noted as "well-vetted and safe" she was also widely criticized during her tenure with the Clinton administration as remaining silent during key determinations on EPA programs. However, Ms. Browner has clearly impressive credentials and is well-known to those inside Washington and in the environmental community generally.
 
EPA Administrator - Lisa Jackson, Governor Jon Corzine's chief of staff, previously head of New Jersey's Department of Environmental Protection. Ms. Jackson brings the view of the east coast in to the green team. So far she is the least well-received of the appointments, with environmentalists criticizing her track record at the state.
 
Chair, White House Council on Environmental Quality - Nancy Sutley - deputy mayor, Los Angeles. Ms. Sutley is another Californian in the mix. With Boxer and Waxman chairing the key legislative committees, west coast voices are now the power block on climate change.

Interior Secretary - Ken Salazar, Colorado Senate, is being criticized by environmentalists for his ties to ranching and traditional energy policy and his record in the Senate.