HemperFi

As promised, here is an analysis of election-year politics for the members of the California Senate's Public Safety Committee. They currently hold the fate of AB1147 in their hands:

1. Charles Poochigian (say it four times fast) is a Republican vice-chair of the committee, and he’s reached his term limit this year. Guess where he’s applying for a new job: He wants to be the next Attorney General! He’ll face a tough opponent in former governor and Oakland Mayor Jerry Brown, now the grand old man of California politics. But would he want to take a risk in being called soft on drug crime by allowing the hemp bill to get to the Senate
floor?
2. There are two others up for reelection in November, Gil Cedillo and Gloria Romero (both districts in the Los Angeles area). Yes, these are both safe districts (over 50 percent Democratic registration), but they both also have to deal with 20 percent “Decline to State” voters, who can fall into the Republican column very easily over a single issue. Would the hemp bill really threaten these districts? Maybe not, but there’s an element of political risk for these two.
3. Two Democrats in the Assembly joined 28 Republicans in the “No” column. Both are from fairly conservative districts in the Central Valley and Orange County. Senate Democrats, if this bill ever makes it to the floor, will have to make sure they keep these defections to a minimum. If five Dems decide to vote with the other side, the bill is history.

The bottom line is this: The hemp bill might make all the sense in the world, and it could help California make hemp a viable, money-making crop someday. But without the right political conditions, bills like AB1147 will remain in political imbo. Keep an eye on this bill after November, when the election storm is over.

Posted by Josh at 06:41 AM | Permalink

API's (American Petroleum Institute) somewhat troubling policy statement on transporting ethanol in pipelines should not be missed. The statement's not-so-subtle message to pipeline operators is: "be wary of transporting ethanol in your pipelines". There's a slightly more balanced view provided by In the Pipe. Both of these pieces do not address the management tools pipeline operators have at their disposal to monitor and mitigate pipeline corrosion.

Tagging ethanol and other biofuels as a risk to pipeline operators will present transportation challenges for ethanol producers trying to get their product to filling stations. Without at doubt, limiting ethanol to truck or rail tanker transport will change the profitability of biofuel economics. At the same time, just about everything going through today's pipelines (e.g. the sulfur-rich heavy oil and sour gas) is more corrosive compared to the "sweeter" alternatives of years past.

On a different note...

The amount of press coverage ethanol and other biofuel alternatives have captured recetnly leads me to suspect that North America and Europe are on the cusp of a broad "biofuel awakening." I should add that even CSPAN has given ethanol substantial airtime (although I'm disappinted to report that no-one metntioned industrial hemp in the segment I watched)

NPR's story on Peak Oil. formally titled: "Experts Ponder Peak of Global Oil Production" provides a balanced view. In the piece, NPR cites the (optimistic) views of Cambridge Energy Research Associates (CERA). Given that CERA's track record is highly regarded in the industry, their perspective should not be readily discounted.

Posted by M at 10:18 PM | Permalink

So you might be wondering… how much longer is California’s AB1147 going to stew in the state Senate’s Public Safety Committee? It has been there since February waiting for action. This bill revises the definition of marijuana in the California Health and Safety Code to exclude industrial hemp — a small step, perhaps, but until industrial hemp gets in the books as a legal product, there will always be roadblocks to commerce.

No hearing date has been scheduled yet, and it’s unclear precisely why. But if you check the committee membership and the political context in 2006, you get the big picture (and it’s not a pretty one). It’s an election year: If you’re a senator worried about whether or not you’ll keep your cushy office in Sacramento this year, why take a risk in passing through a hemp bill that could give you bad press?

Check the history of AB1147, including who voted for and against, here. Next time: A member-by-member analysis of the committee and who might have an incentive to block the bill.

Posted by Josh at 11:08 PM | Permalink | Comments (2)

Had someone asked me earlier this year who would be the first state to put an industrial hemp licensing regime for farmers, North Dakota would not have been at the top of my list. For those not familiar with the American federal system, the fact that North Dakota has surged forward with state-based licensing should be viewed as a not-so-subtle challenge to the U.S. Code. Specifically, North Dakota legislators and the Agricultural Commissioner, Roger Johnson, are challenging the applicability of Title 21 USC Section 812 that makes marijuana illegal to industrial hemp (for more on this see this post in HemperFi). You can read the official press release here.

The missing ingredient in all this is Congress. At this point, Congress needs to step in and help draw a legally recognized distinction between industrial hemp and marijuana. I'm guessing, passing a quick and dirty statement published in the Federal Register (that clarifies the U.S. Code) would suffice...there's probably no need to pass a bill.

Once that occurs, the U.S. Drug Enforcement Agency (DEA) would no longer have authority to block permit issuance by the states, given that industrial hemp would no longer be defined as a "drug".

I say, hats off to North Dakota! Agricultural Commissioner Roger Johnson, along with the state legislature, have laid down an important milestone for industrial hemp cultivation in the United States.

Posted by M at 07:12 AM | Permalink

For those of you interested in bio fuels --including industrial hemp processing for fuel-- tracking the latest dicsussions around oil production may be of interest. One site that does it very well is The Oil Drum. First time visitors will want to check out the section that explains the concept of "peak oi" and why many feel that production has begun to plateau.

At the same time let's not underestimate the creativity of humankind. In the early 1990s many believed that drilling in offshore depths of over 500 meters would prove impossible. Today, companies are positioning rigs on open water that are able to sit up to 2700 meters above the ocean floor, allowing access to reserves long thought unreachable.

The cost of production has certainly skyrocketed while the quality of crude extracted from the ground is of poorer quality. This, along with questionable claimed reserves, geopolitical instability, increasing demand and a host of other factors, will continue to ensure high prices at the pump. In short, there's very little "easy oil" left.

The good news is that the earlier the majority accepts "peak oil", the faster we will be able to move to alternate fuels. My hope is that national oil companies along with "the Majors" adopt a multi-faceted exploration and production strategy which includes R&D dollars for bio fuels as opposed to "hard to find oil". I contend that a new switch from exploration to bio fuel refining is long overdue.

An industry insider recently told me that there are some 70 refinery construction projects planned worldwide in 2006...over five in the United States alone. I'm told those numbers are unheard of in oil & gas. Let's hope that includes ethanol and other bio fuel refining as well.

Posted by M at 02:00 AM | Permalink

Ms. Woertz:

Congratulations on your new post as CEO of Archer Daniels Midland. It's a notable switch for ADM to bring on a female from the Oil & Gas industry, and I was pleased to hear the news that ADM is serious about becoming a leader in the carbohydrate economy.

That said, HemperFi has not exactly praised ADM in previous posts. Given ADM's unmitigated pursuit for profit maximization with disregard towards the small-scale famer, it's unlikely that favorable entries will suddenly appear.

However, I'm hopeful that ADM sits at a historic crossroads. Here's a wonderful opportunity to fix a less-than-perfect (and I'm being gracious here) company history. Your noted advocacy against MTBE in the 1990s and your clear commitment to biofuels leads me to believe that perhaps we can look forward to more grounded, fairer, better governed, ADM.

And lastly, a favor. We need your help in the misguided, non-fact-based, anti industrial hemp campaign the current administration has brought to bear on the American public. It's not right for farmers and other would-be entrepreneurs, not to mention the environment and the public.

Thank You,
HemperFi

Posted by M at 12:00 AM | Permalink