Washington Insider-- Thursday

By DTN's Washington Insider

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Report Claims Greater Exports of U.S. Crude Oil Would Reduce Domestic Gasoline Prices

A report issued this week by Columbia University is receiving attention in Washington for its claim that lifting the ban on exports of domestic crude oil would lower U.S. gasoline prices by as much as 12 cents a gallon. The report, co-authored by Columbia's Jason Bordoff, also says that exporting oil would help prevent a shortage of light crude refining capacity in the United States and could increase U.S. crude production by as much as 1.2 million barrels a day on average between now and 2025.

Until two years ago, Bordoff was working at the White House as special assistant to the president and senior director for energy and climate change on the staff of the National Security Council, thus giving the report an even higher profile.

There are a number of supply and demand factors at play in this analysis, some of which appear counterintuitive. How would exporting more oil cause the price of gasoline to fall? But the reasoning does make sense for commodities including petroleum. For example, an increase in exports of U.S. corn and soybeans generally supports domestic prices, leading to greater production the next year and, absent another increase in exports or domestic disappearance, to lower prices down the road.

***

Senate Holds 'Statement Vote' on Climate Change

Each year, a number of proposals are sent to the floors of the House and Senate not because they have much chance of passage, but to put members on record as being either for or against a particular –– usually politically sensitive –– issue. This week, two Democratic senators introduced amendments to the Keystone XL pipeline bill to allow their colleagues to make just such a statement about where they stand on climate change.

The amendments, sponsored by Hawaii's Sen. Brian Schatz and Rhode Island's Sheldon Whitehouse, call on Congress to recognize the scientific link between climate change and human activity.

The Republican-controlled Senate backed one non-binding measure 98-1 Wednesday. It reads, "Climate change is real and not a hoax."

The Senate was divided, 50-49, on Schatz amendment that claimed human activities "significantly" altered the climate.

***

Washington Insider: Dietary Advice Increasingly Controversial

The federal Dietary Guidelines Advisory Committee has been gathering headlines and sending off political sparks in many directions recently. The panel hasn't published its recommendations yet, but the press is combing documents and public testimony and claims to have insight regarding the outlines of coming committee findings.

Earlier, the committee's discussions focused on possible health risks from eating too much meat and sodium-rich foods. In response, the North American Meat Institute cried "foul" and worried that the panel's focus on saturated fats could kill references to "lean meat" being part of a healthy diet. The trade group shared its concerns with lawmakers, said spokeswoman Janet Riley, without providing specifics.

In addition, the panel has discussed a blockbuster "sustainability initiative" that includes endorsing plant-based diets and urging greater consumption of farm-raised fish to alleviate overfishing. Some powerful interests in Congress didn't like that much and an appropriations bill passed last month included a non-binding provision telling the guideline agencies, USDA and HHS, to "only include nutrition and dietary information."

However, committee members do not appear to be backing down and are continuing to push for detailed sugar information on Food and Drug Administration nutrition labels and for rules limiting the use of food stamps to purchasing "healthy choices." Apparently, the committee will suggest limiting sugars to no more than 10% of all calories, down from the average 13% now consumed by U.S. adults, press reports indicate. The recommendation would be the panel's first explicit target for sugar in the diet.

Food industry experts note that guideline recommendations are often controversial because they can have far-reaching effects. They help shape school lunch menus and the $6 billion annual Women, Infants and Children program, which serves more than 8 million Americans. They also are the basis for the well-known dinner-plate icon that replaced the food pyramid in public-education campaigns about a healthy diet.

In comments to the panel, the Sugar Association, a trade group of farmers and refiners said it is "mystified" by some of the work, and called "added sugars" a misleading term. The industry also argues that "Recommendations should be based on the preponderance of scientific information."

Observers suggest that the sugar recommendation being considered reflects the fact that the consumption of sugary beverages has been linked to high obesity rates and that several local governments such as New York City have concluded that sugars can be a public-health threat. However, efforts to cut consumption from raising taxes on sodas to imposing limits on supersize beverages have largely failed at ballot boxes and in courtrooms, except in Berkeley, Calif., where voters overwhelmingly approved he nation's first tax on sodas last year.

Any recommendation by the panel to limit sugar consumption likely will be diluted before becoming final later this year, nutrition advocates say. The soda and meat industries already are poring over the diet committee's work, and the American Beverage Association said in comments that panelists "appeared to be biased toward pre-determined outcomes."

Historically, committee efforts to provide clear direction have been watered down after lobbying, but some believe that public awareness of nutrition issues has grown, spurred by the Obamas.

Today, food industry groups are convinced that the dietary panel's scientists overreached and should be reined in. Marion Nestle, a nutrition professor at New York University and a dietary advisory committee member in 1994-95, told the press, "the industry will do what it's always done: You attack the science, you attack the individuals who are making statements on it, and you go behind the scenes and lobby."

In addition, it likely will be much tougher — perhaps impossible — to find scientific arguments to support any massive "sustainability initiative" that would shift U.S. diets away from red meats and toward plant based foods. In fact, it is likely that such efforts, based largely on vague preferences, may be both weakening the overall efforts of the committee and unifying opposition.

Clearly, there are areas where scientists have important guidance to give American consumers. But pushing social objectives ahead of health and nutrition probably will not further those objectives and should be watched carefully by producers as the debate continues, Washington Insider believes.

---

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN's Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the U.S. Ag Policy, U.S. Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@telventdtn.com

(GH/CZ)

Copyright 2015 DTN/The Progressive Farmer. All rights reserved.