Climate Change Legislation

Never in history has so much been required of agriculture.  In addition to the ever-present mission to feed the world, agriculture is expected to help mitigate climate change, develop alternative energies, improve human health and create new sources of food and nutrition. 

In just 50 years, the over nine billion people then living on this planet will require 100 percent more food than is needed today.  Translation:  agriculture will need to produce in that same time period twice the amount of grain, livestock and other products.  

Because of environmental and practical limitations, there is simply insufficient high-quality land to just "grow" or "raise" more food.   According to the World Bank, there is at most 12 percent more arable land available for food production that isn't presently forested or subject to erosion or desertification.  There also will be significant limitations on water availability in the future.  By 2050, it is estimated, four billion people, eight times as many as today, will be living in countries with chronic water shortages.

The United Nation's Food and Agriculture Organization reports that new farmland could meet 20 percent of this new food demand and increased cropping intensity may yield another 10 percent.  The remainder – an overwhelming 70 percent of the additional world food needs – must come from technology and innovation.

Technology advancements and corresponding productivity gains in agriculture across the 20th century were remarkable and arguably prevented major famines or devastating food wars.  Consider the following:

• Corn yields in 1910 were about 15 bushels to the acre.  In 1960, they were 55 bushels per acre, and today, they are well over 160 bushels – a 300 percent increase in just the last 50 years.  Wheat and soybean yields have seen 215 percent and 169 percent increases in that same 50-year period.  

• The livestock sector, too, continues to provide more high-quality protein using fewer resources.  The U.S. dairy industry produces nearly 60 percent more milk with 64 percent fewer cows than it did some 65 years ago.  And, the same trend holds for pork.  Compared to 1950, U.S. hog farmers produce 176 percent more pork per sow with 44 percent fewer sows.

• A century ago, each U.S. farmer's production fed only a dozen or so people.  Today, the average U.S. farmer feeds 155 people.

Our next set of great challenges, though, will require even greater solutions and must come not only from the U.S. but from around the world.  Investment and commitment to these three unique, yet inter-connected, areas are especially critical to our problem-solving.

Read Beth Bechdol's entire article that was published in Nebraska Pork Talk.

Blog written by Jacob Cox.

Opposition continues to grow against the U.S. Environment Protection Agency's (EPA) recent finding that greenhouse gases "endanger" public safety and welfare due to their effect on global warming.  Climate change issues are already a common source of controversy, but the EPA's finding has drawn attention due to the potentially wide-reaching effect of regulations proposed by the EPA:  More than six million facilities whose emissions are currently unregulated, including hospitals, restaurants, hotels and even small farms, could potentially be subject to new permitting requirements.

Driven by a concern for the effect of such new administrative and economic burdens on small businesses, Virginia and two other states filed suit in federal court against the EPA in late February 2010, in an attempt to force it to reexamine its "endangerment" finding.  Since that time, more than a dozen other states, including Indiana, Kentucky and Nebraska, have filed motions to join the Virginia lawsuit in opposition to the EPA's finding.  Outside the courtroom, numerous members of Congress have also begun to seek support for an amendment to the Clean Air Act that would specifically prevent the EPA from regulating greenhouse gas emissions. 

Despite these criticisms, the EPA has refused to compromise its position, and has indicated that it believes its "endangerment" finding will withstand even such direct legal attacks.  Further, the EPA is not without its supporters in this fight – a similar number of states have already expressed their agreement with the EPA's finding, and have even requested the right to intervene in lawsuits filed against the EPA in support of the EPA's position. 

I guess my upcoming presentation on Climate Change Disclosures for the University of Kentucky College of Law Securities Law Conference this Friday, February 5, 2010, is more timely than I could have anticipated. While not opining on the science of climate change, the Securities and Exchange Commission (SEC) issued interpretive guidance (guidance) Tuesday, February 2, 2010, on existing SEC disclosure requirements as they apply to business or legal developments relating to the issue of climate change.  Proxy activism, investors interest on the impact of climate change on their investments, and the recent regulatory and legislative developments prompted the SEC to recognize that, for some companies, these developments could have a "significant effect on operating and financial decisions, including those involving capital expenditures to reduce emissions and, for companies subject to 'cap and trade' laws, expenses relating to purchasing allowances where reduction targets cannot be met."  The SEC noted that even companies that may not be directly affected by these developments could be indirectly affected as prices change for goods and services. Given this diverse and shifting regulatory landscape, what's a reporting company to do?  The intent of the guidance is to provide the reporting roadmap. The guidance does not change the landscape and notes specifically that a number of SEC rules and regulations may be the source of disclosure obligations for registrants under the federal securities laws.  However, the guidance identifies topics that are some of the ways climate change may trigger disclosures required by those rules and regulations:

• Impact of legislation and regulation - Developments in federal and state legislation and regulation regarding climate change, and provisions which relate to greenhouse gas emissions, may trigger disclosure of material estimated capital expenditures and specific risks registrants face as a result of the changes. The guidance advises registrants to "consider specific risks they face as a result of climate change legislation and avoid generic risk factor disclosure that could apply to any company."
   
• International Accords - Consider and disclose, when material, the impact on a registrant's business of treaties and international accords relating to climate change.
   
• Indirect consequences of regulation or business trends - Think increased or decreased demands for goods, services, products and energy sources depending on their greenhouse gas emissions. The guidance directs a registrant to assess its business and its sensitivity to public opinion.  A registrant may have to consider whether the public's perception of any publicly available data, relating to its greenhouse gas emissions, could expose it to potential adverse consequences on its business operation or financial condition resulting from reputational damage.
   
• Physical impacts of climate change - How do the physical impacts of climate change, (such as effects on the severity of weather [floods, hurricanes] or sea levels, arability of farmland or water availability or quality) affect a registrant's operations and results?  Registrations whose businesses may be vulnerable to severe weather or climate related events should consider disclosing material risks of, or consequences from, such events in their publicly filed disclosure documents.

See http://www.sec.gov/rules/interp/2010/33-9106.pdf for the text of the guidance.

The U.S. Department of Agriculture (USDA) made two announcements in recent days from Copenhagen, Denmark as the United States and delegates from 191 other countries meet at the United Nations Climate Summit. Secretary of Agriculture Tom Vilsack released a USDA report outlining the agency's calculated impact of climate change on U.S. ecosystems. "The Effects of Climate Change on U.S. Ecosystems" report concludes that climate change affects U.S. agriculture, land resources, water resources and biodiversity and describes in some detail more specific projected impacts on grain and oilseed crops, horticultural crops, and livestock, among others. Vilsack referenced carbon offset markets as a means to help the country become energy independent, to reduce greenhouse gas emissions and to create income generating opportunities for rural America. USDA's analysis of the climate change legislation passed by the U.S. House of Representatives shows it provides a net gain for farmers and ranchers, with revenue from a carbon offset market offsetting increased farm expenses.

A complete copy of the report is available at the following link: http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2009/12/0611.xml.

Over the last several months, many of the leading agriculture commodity organizations have challenged this specific analysis by USDA, arguing the costs to farmers and ranchers far outweigh the calculated revenue from carbon markets. Today, though, USDA announced a unique partnership with U.S. dairy producers who have agreed to accelerate their adoption of waste to energy technology projects. The Memorandum of Understanding, signed by Dairy Management Inc.'s Innovation Center for U.S. Dairy and USDA, committed the industry to reach a 25 percent reduction in greenhouse gas emissions by 2020. The partners will increase the number of anaerobic digesters (which convert manure into electricity) supported by USDA programs and also encourage research and development of new technologies.

The U.S. Department of Agriculture (USDA) made two announcements in recent days from Copenhagen, Denmark as the United States and delegates from 191 other countries meet at the United Nations Climate Summit. Secretary of Agriculture Tom Vilsack released a USDA report outlining the agency's calculated impact of climate change on U.S. ecosystems. "The Effects of Climate Change on U.S. Ecosystems" report concludes that climate change affects U.S. agriculture, land resources, water resources and biodiversity and describes in some detail more specific projected impacts on grain and oilseed crops, horticultural crops, and livestock, among others. Vilsack referenced carbon offset markets as a means to help the country become energy independent, to reduce greenhouse gas emissions and to create income generating opportunities for rural America. USDA's analysis of the climate change legislation passed by the U.S. House of Representatives shows it provides a net gain for farmers and ranchers, with revenue from a carbon offset market offsetting increased farm expenses.

A complete copy of the report is available at the following link: http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?contentidonly=true&contentid=2009/12/0611.xml.

Over the last several months, many of the leading agriculture commodity organizations have challenged this specific analysis by USDA, arguing the costs to farmers and ranchers far outweigh the calculated revenue from carbon markets. Today, though, USDA announced a unique partnership with U.S. dairy producers who have agreed to accelerate their adoption of waste to energy technology projects. The Memorandum of Understanding, signed by Dairy Management Inc.'s Innovation Center for U.S. Dairy and USDA, committed the industry to reach a 25 percent reduction in greenhouse gas emissions by 2020. The partners will increase the number of anaerobic digesters (which convert manure into electricity) supported by USDA programs and also encourage research and development of new technologies.

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.

Saying "[w]ith respect to climate pollution, we will act," and that "[t]he Clean Air Act does in fact allow us to do so" Administrator Jackson today announced that greenhouse gases threaten the public health and welfare of the American people.
 
Administrator Jackson indicated at the press briefing that the agency's intention with regards to the finding was to "release the science and reduce the questions." Stressing that "we'll continue to work under the Clean Air Act" Administrator Jackson also stated that the agency is "compelled" to address climate change pollution.
 
She fielded questions on the legislative timeline and agenda and stressed that EPA's and the legislative initiatives are independent.  Administrator Jackson did emphasize that the agency would move forward with work that the EPA had planned, and that there is no reason to delay.  A common question at the briefing was what EPA's timeline is on additional rules for stationery sources and additional rulemaking for reductions in light of the greenhouse gas reporting rule. Administrator Jackson said that there was no timeline for the next rules on emissions, including next steps on the tailoring rule, and stated that "I have no additional information on timelines." 
 
So why issue this rule now, and not concurrent with the transportation rule?  She stressed again that this is a unique situation and responded that this finding itself was the subject of a U.S. Supreme Court Case and that they wanted to project the image that the "EPA is on the job and is about doing the job."  She said that they intend to "keep the ball moving."
 
The overall message from the press conference was, "with respect to climate pollution, we will act."

To view a full transcript of Administrator Jackson's remarks, click here.

After an overnight flight from the U.S., we arrived in São Paulo, Brazil, the nation's largest city in the southern region of the country.  Brazil covers a very large area along the eastern coast of South America and includes much of the continent's interior region.  The county is equivalent in size to the continental U.S., but has less than two-thirds of the U.S. population.

Once we answered questions from the Brazilian hotel staff on the upcoming NFL season and the Indianapolis Colts, we meet with Scott Shaw, deputy senior commercial officer at the U.S. Consulate.  One of the main focuses for this trade mission is to learn about energy.  Brazil's advances in this area make it an ideal place to learn,  especially with São Paulo on the leading edge of energy independence.  The briefing provided a great overview of Brazil's energy programs and the impact they've made in energy advancement.

Brazil is 100 percent energy independent and they have virtually no carbon issues, which means they also don't have the cap and trade issues the U.S. is facing.  Seventy percent of Brazil's energy is from water.  The rainforests, which comprise about 98 percent of northern Brazil, help stabilize the atmosphere and environment and reduce manmade environmental impacts in the region.  In addition, Brazil doesn't use coal.  Another strong energy source for Brazil is ethanol with sixty percent of Brazil's ethanol being produced in São Paulo.  They've been using homegrown biofuels since 1973 and their ethanol is based on sugar cane.  Sugar cane is not a resource easily grown in the U.S. and our ethanol is based on cellulosic and corn ethanol.

Brazil is so committed to energy and global climate change that they have pledged that the 2014 FIFA World Cup soccer event will be carbon neutral.  The stadium currently under construction will use only solar energy.

After the briefing with the U.S. Consulate, we met with representatives of the Federação das Industrias do Estado de São Paulo (FIESP).  The FIESP is an industrial entity comprised of 127 industrial associations (which make up 42 percent of the industrial GDP).  The FIESP monitors and fosters business relations with countries worldwide.  Major projects for this group include renewable and sustainable energy, climate change legislation and solar energy for heating.

We then traveled to the Fundaçoa de Amparo a Pesquisa do Estado de São Paulo (FAPESP), which is the state of Sao Paulo Research Foundation.  FAPESP is one of the main funding sources for scientific and technological research in Brazil.  Funding is derived from a one percent tax to all employers and the board of directors is appointed by the government.  Even with the funding subsidized by the government, the group has autonomy in how they manage and invest the $350 million annual budget.

We were also able to meet with many Brazilian and São Paulo dignitaries at an evening reception hosted by the FIESP.  The reception again reinforced what we already learned .  Brazil, and São Paulo, has learned to use their environment to improve their country and the lives of their people, without harming the natural resources that provide so much.

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.
 

President Obama set out his priorities regarding his vision of a clean energy future. In a press release prior to meetings with "clean energy entrepreneurs and leaders of the research community" the president stated that it was time to make investments in cutting-edge research that will establish the foundation for America's future economic prosperity. The press release included the follwoing:

FACT SHEET: INVESTING IN OUR CLEAN ENERGY FUTURE

Today, President Obama will meet with clean energy entrepreneurs and leaders of the research community to discuss his strategy for building a clean energy economy and creating the industries and jobs of the future.

The American Recovery and Reinvestment Act (ARRA) and his FY10 budget dramatically increase investment in cutting-edge research, the development and deployment of clean energy technologies, and incentives for private sector research and development (R&D).  These investments will establish the foundation for America’s future economic prosperity, reduce our dependence on foreign oil, and help combat climate change.

The ARRA includes $39 billion in energy investments at the Department of Energy and $20 billion in tax incentives for clean energy, including:

• The creation of an advanced research agency for energy, modeled after the Defense Advanced Research Projects Agency which developed the Internet.
• Support for Energy Frontier Research Centers, which could lead to breakthroughs in energy storage, super-efficient engines, and solar cells as cheap as paint.
• Supporting U.S. manufacturing of advanced batteries needed for plug-in hybrids, renewable energy backup, and other applications.
• $1.2 billon for research infrastructure for the Department of Energy’s national labs, which is being announced by Secretary of Energy Steven Chu today at Brookhaven National Laboratory. 

The  president’s 10-year budget also proposes almost $75 billion to make the Research and Experimentation Tax Credit permanent, stimulating private-sector investment in R&D and keeping the U.S. economy at the cutting-edge of 21st century technologies:

• Studies have shown that every dollar of tax benefit stimulates as much as an additional dollar of private R&D spending in the short term and two dollars in the long term.  Every one dollar of R&D adds two dollars of benefit to our economy and society as a whole.
• Two-thirds of benefits of the credit are attributable to salaries of U.S. workers performing U.S.-based research, and the credit stimulates R&D spending by more than 11,000 small, medium and large firms.
• The credit has been extended 13 times with some extensions lasting just six months, and has also been allowed to lapse for almost a year - undermining its effectiveness because companies can't count on it. 

Several of the technologies in the program today will be on display, highlighting the importance of R&D investment in building a clean energy economy, including:

• Orion Energy "Apollo Light Pipe:" The Apollo Light Pipe collects and focuses sunlight, bringing natural light indoors without consuming electricity and replacing traditional lighting for large portions of the day.  Coca-Cola and Sysco have installed this system, saving enough energy to power over 500 homes for a year.
• Solyndra Solar Panel: Solyndra is the first recipient of the DOE Loan Guarantee recovery program, announced last week.  Their solar panel is a unique cylindrical design that maximizes direct sunlight and absorption. 

The program will highlight success stories from R&D investments in the lab to job creation. Paul Holland, the vice chairman of the board and lead investor for Serious Materials, will introduce the president and share the story of Serious Materials, the leading energy-saving building materials company in the U.S.

• Serious Materials has four plants in California, Colorado, Pennsylvania, and plans to reopen the old Republic Windows plant in Chicago this Spring.
• Earlier this month, Serious Materials re-opened a previously shuttered plant in Pennsylvania, and is hiring back over 100 union workers in the next couple of months.
• Serious Materials’ products exceed current Energy Star standards by up to 400 percent and can reduce heating and cooling energy costs by up to 50 percent.  Five percent of U.S. energy use is lapsed through inefficient window glass.

President Obama set out his priorities regarding his vision of a clean energy future. In a press release prior to meetings with "clean energy entrepreneurs and leaders of the research community" the president stated that it was time to make investments in cutting-edge research that will establish the foundation for America's future economic prosperity. The press release included the follwoing:

FACT SHEET: INVESTING IN OUR CLEAN ENERGY FUTURE

Today, President Obama will meet with clean energy entrepreneurs and leaders of the research community to discuss his strategy for building a clean energy economy and creating the industries and jobs of the future.

The American Recovery and Reinvestment Act (ARRA) and his FY10 budget dramatically increase investment in cutting-edge research, the development and deployment of clean energy technologies, and incentives for private sector research and development (R&D).  These investments will establish the foundation for America’s future economic prosperity, reduce our dependence on foreign oil, and help combat climate change.

The ARRA includes $39 billion in energy investments at the Department of Energy and $20 billion in tax incentives for clean energy, including:

• The creation of an advanced research agency for energy, modeled after the Defense Advanced Research Projects Agency which developed the Internet.
• Support for Energy Frontier Research Centers, which could lead to breakthroughs in energy storage, super-efficient engines, and solar cells as cheap as paint.
• Supporting U.S. manufacturing of advanced batteries needed for plug-in hybrids, renewable energy backup, and other applications.
• $1.2 billon for research infrastructure for the Department of Energy’s national labs, which is being announced by Secretary of Energy Steven Chu today at Brookhaven National Laboratory. 

The  president’s 10-year budget also proposes almost $75 billion to make the Research and Experimentation Tax Credit permanent, stimulating private-sector investment in R&D and keeping the U.S. economy at the cutting-edge of 21st century technologies:

• Studies have shown that every dollar of tax benefit stimulates as much as an additional dollar of private R&D spending in the short term and two dollars in the long term.  Every one dollar of R&D adds two dollars of benefit to our economy and society as a whole.
• Two-thirds of benefits of the credit are attributable to salaries of U.S. workers performing U.S.-based research, and the credit stimulates R&D spending by more than 11,000 small, medium and large firms.
• The credit has been extended 13 times with some extensions lasting just six months, and has also been allowed to lapse for almost a year - undermining its effectiveness because companies can't count on it. 

Several of the technologies in the program today will be on display, highlighting the importance of R&D investment in building a clean energy economy, including:

• Orion Energy "Apollo Light Pipe:" The Apollo Light Pipe collects and focuses sunlight, bringing natural light indoors without consuming electricity and replacing traditional lighting for large portions of the day.  Coca-Cola and Sysco have installed this system, saving enough energy to power over 500 homes for a year.
• Solyndra Solar Panel: Solyndra is the first recipient of the DOE Loan Guarantee recovery program, announced last week.  Their solar panel is a unique cylindrical design that maximizes direct sunlight and absorption. 

The program will highlight success stories from R&D investments in the lab to job creation. Paul Holland, the vice chairman of the board and lead investor for Serious Materials, will introduce the president and share the story of Serious Materials, the leading energy-saving building materials company in the U.S.

• Serious Materials has four plants in California, Colorado, Pennsylvania, and plans to reopen the old Republic Windows plant in Chicago this Spring.
• Earlier this month, Serious Materials re-opened a previously shuttered plant in Pennsylvania, and is hiring back over 100 union workers in the next couple of months.
• Serious Materials’ products exceed current Energy Star standards by up to 400 percent and can reduce heating and cooling energy costs by up to 50 percent.  Five percent of U.S. energy use is lapsed through inefficient window glass.

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

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

"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.

Kelly Doria, an associate at Ice Miller, wrote this blog.  I thought it was interesting.

Although the issue of climate change disclosure has generated much attention over the last few years, the SEC has yet to establish specific guidance on climate change related securities disclosures.  But, this inaction has not stopped the state of New York from taking the lead by demanding climate change disclosures in public securities filings.

The New York State Securities Law, commonly known as the Martin Act, principally focuses on investigation and enforcement powers in preventing the investing public from fraud (compared to other states' Blue Sky laws that focus on the registration of securities).  The Martin Act permits the New York attorney general to file civil or criminal charges of fraud in connection with the offer and sale of securities in and from the state of New York.  In September 2007, New York Attorney General Andrew Cuomo subpoenaed the executives of several public energy companies (AES Corporation, Dominion Resources, Inc., Xcel Energy, Dynegy Inc. and Peabody Energy) for information on whether public disclosures to investors in filings with the SEC adequately described the companies' financial risks related to the emissions of global warming pollution.

In an agreement announced October 23, 2008, Dynegy Inc., a Delaware corporation headquartered in Texas and traded on the NYSE, agreed to provide disclosure of material risks associated with climate change in its next annual report on Form 10-K.  Pursuant to the agreement, the required disclosure includes an analysis of material financial risks from climate change related to:

• Present and probable future climate change regulation and legislation;
• Climate-change related litigation; and
• Physical impacts of climate change.

Dynegy also committed to disclosing:

• Current carbon emissions;
• Projected increases in carbon emissions from planned coal-fired power plants;
• Company strategies for reducing, offsetting, limiting or otherwise managing its global warming pollution emissions and expected global warming emissions reductions from these actions; and
• Corporate governance actions related to climate change, including if environmental performance is incorporated into officer compensation.

A similar agreement was also reached with Xcel Energy in August 2008, while the investigations continue for AES Corporation, Dominion Resources, Inc. and Peabody Energy.

Voluntary climate change disclosures is a likely trend for oil and gas companies in 2009, but expect these disclosures to expand to other industries in the near future.