Congress, EPA Face Same Issues

RFS | Debt limit | BBB | FY 2022 funding

Washington Focus

This just in… The Biden administration is expected to release proposed biofuel blending requirements in the coming days! Maybe this week will not be another false start for the laughable nonexecution of a legal timeline for the Renewable Fuel Standard (RFS) program. For background and why biofuel Covid aid is being held up, see this link to our special report on the topic.

There have been numerous delays and back-and-forth on the coming mandated requirements and other issues. But despite what USDA Secretary Tom Vilsack says, the reason for the delay is not slow walking at the Office of Management and Budget (OMB). The reason is pure politics, as usual, as the Biden administration thinks they will ease the pain of the coming announcement to the biofuel sector by also detailing the $700 million in aid to the industry announced months ago, and they will also mention the around $1 billion of biofuel-related funding in the pending Build Back Better (BBB) package.

If reports are accurate, the Environmental Protection Agency has reportedly told two Democratic Senate offices that volumes for both 2020 and 2021 will be retroactively lower after pandemic-related delays but will be restored for 2022. But that has been known for months, so why the long delay? Again, Vilsack more than signaled the reason why, check it out.

The announcement will reportedly propose changes that would allow more biofuels to qualify for credits under the RFS, including those partially processed at multiple facilities. The measure is set to include elements of an Obama-era “renewables enhancement and growth support” rule proposed in 2016 that has never been finalized. The proposal would benefit biofuels that are processed across multiple sites, with a so-called biointermediate feedstock partially processed at one facility and later further processed into a finished renewable fuel at another location.

New week, same issues in the Senate, and likely same outcomes: no decisions and more delays.

The list includes dealing with the debt limit, trying to get final language for the Build Back Better (BBB) Act, and then a BBB vote that could be pushed into 2022. Lawmakers last week did what they do best by kicking the fiscal year 2022 funding measure until Feb. 18. As for the BBB, the most accurate assessment is to say negotiations continue. Majority Leader Chuck Schumer (D-N.Y.) is reportedly eyeing a vote as early as next week, a timeline many think will not be met. The final language and actual vote depend on centrist Sen. Joe Manchin (D-W.Va.).

Labor markets. The Federal Trade Commission and Department of Justice will hold a joint workshop on competition in labor markets on Monday and Tuesday.

Infrastructure and climate. On Tuesday, Axios will hold an event on "The Infrastructure Bill's Climate Future" featuring Energy Secretary Jennifer Granholm and Sen. John Hickenlooper (D-Colo.). The infrastructure bill includes several provisions relevant to climate change, beyond the funding for bridges and roads, etc. These include nearly $50 billion for climate resilience and weatherization, $65 billion for renewables and electricity grid investments and $7.5 billion for electric vehicle charging stations.

Also on Tuesday, the Bipartisan Policy Center will hold an event titled "Scaling America's Clean Energy Infrastructure" featuring Jigar Shah, the director of the Department of Energy's Loan Programs Office. Shah's office already played a significant role in the Biden administration's renewable energy efforts. The office is now tasked with ushering the commercialization of new renewable, nuclear and other technologies.

WSJ CEO Summit. The Wall Street Journal on Tuesday holds its CEO Council Summit with remarks from Transportation Secretary Pete Buttigieg; and Commerce Secretary Gina M. Raimondo on "Rebuilding America"; Securities and Exchange Commission Chairman Gary Gensler on "Regulating Markets in a Fast-Changing World”; BP CEO Bernard Looney on the "The Energy Transition"; and Sen. Joe Manchin (D-W.Va.) on "Breaking the Political Deadlock."

Global shipping supply chains focus of hearing. On Tuesday, the Senate Commerce, Science and Transportation Surface Transportation, Maritime, Freight, and Ports Subcommittee holds a hearing on "Uncharted Waters: Challenges Posed by Ocean Shipping Supply Chains."

USDA school nutrition programs. House Agriculture Nutrition, Oversight, and Department Operations Subcommittee holds a hearing Wednesday on "Review of USDA Nutrition Distribution Programs."

Cryptocurrency chief executives will testify Wednesday before the House Financial Services Committee. This marks the first time major leaders in the crypto industry will testify in front of Congress together.

On the geopolitical front, Ukraine estimates Russia has massed nearly 100,000 troops (expected to total nearly 175,000) near its border, Western observers are worried, and President Joe Biden is set to talk with Russian President Vladimir Putin on Tuesday.

Dole death announced. Former Senate Majority Leader Bob Dole (R-Kan.), 98, the 1996 Republican presidential nominee and a former vice president nominee, died Sunday morning, according to a statement released by his family. After recovering from wounds suffered in World War II, Dole went on to represent Kansas in Congress for more than 30 years. On the ag policy front, Dole was instrumental for several programs but along with former Sen. George McGovern (D-S.D.) they made a lot more needed Americans qualify for food aid.

Economic Reports for the Week

The Federal Reserve is in its quiet period leading up to its policy-setting committee's Dec. 14-15 meeting. Key report comes Friday via the consumer price index report just five days before Federal Reserve policy makers meet to discuss inflation risks. Analysts expect the headline CPI number to reach 6.7%, which would be the highest rate since 1982. An even higher rate could rattle investors further and reset central bank expectations.

Tuesday, Dec. 7

Federal Reserve reports on consumer credit data for October. After falling slightly last year, total outstanding consumer debt has risen an average of $20 billion a month through September and stands at a record $4.37 trillion.

Wednesday, Dec. 8

MBA Mortgage Applications
BLS releases the Job Openings and Labor Turnover Survey. Economists forecast 10.5 million job openings on the last business day of October, only 600,000 less than the record high of 11.1 million in July.
Bank of Canada announces its monetary-policy decision. The central bank is expected to keep its key short-term interest rate unchanged at 0.25%. At its late-October meeting, the bank ended its quantitative-easing program and signaled that its first interest-rate hike would be earlier in 2022 than had been expected.

Thursday, Dec. 9

Department of Labor reports initial jobless claims for the week ending on Dec. 4. Jobless claims averaged 238,750 in November, the lowest since the beginning of the pandemic, and just 24,750 more than in February of 2020.
Fed Balance Sheet
Money Supply

Friday, Dec. 10

Bureau of Labor Statistics Consumer Price Index for November. Consensus estimate is for a 6.7% year-over-year jump, half a percentage point more than in October. The core CPI, which excludes volatile food and energy prices, is expected to rise 4.8% versus 4.6% previously. October’s 6.2% increase was the hottest the CPI has run in more than 30 years, and this past week Federal Reserve Chairman Jerome Powell finally ditched “transitory” when discussing inflation before the Senate Banking Committee.
University of Michigan Consumer Sentiment index for December. Economists forecast a 66 reading, slightly less than the November data.

Key USDA & international Ag & Energy Reports and Events

In focus this week: China’s first batch of trade data for November, including soybean, edible oil and meat imports, will be released Tuesday, while USDA on Thursday releases its monthly report on agricultural supply and demand. On the energy front, the EIA on Tuesday releases the Short-Term Energy Outlook.

Monday, Dec. 6

Ag reports and events:

Export Inspections
CNGOIC monthly report on Chinese grains and oilseeds
U.S. Purdue Agriculture Sentiment
Holiday: Thailand