House panel: EPA can gauge ethanol impact abroad

WASHINGTON (Reuters) - By a one-vote margin, a U.S. House committee decided on Thursday not to intervene in federal regulations that could hold U.S. ethanol makers responsible for greenhouse gases from crops overseas.

The Appropriations Committee defeated, 29-30, an amendment to bar the Environmental Protection Agency from using so-called indirect land-use change when measuring greenhouse gases from biofuels. It voted later to ask the Agriculture Department to study the question.

"There is a huge negative effect here," said Jo Ann Emerson, Missouri Republican, who said an unfair EPA rule "could stop U.S. ethanol production in its tracks."

Norm Dicks, Washington state Democrat, said it was logical that food production must expand elsewhere if larger amounts of U.S. crops are used in biofuels, so it is appropriate for EPA to take the changes into account.

Farm Belt lawmakers have threatened to vote against the climate-change bill nearing a vote in the House in protest of EPA's proposed rule.

EPA has a Jan 1 target to apply a final version of rules that require advanced biofuels to have greenhouse gas emissions that are 40 percent lower than gasoline, measured from creation through consumption. U.S. biofuels can meet that requirement if overseas cropland changes are not considered.

Environment America, an umbrella group for state-level groups, said cropland expansion could lead to deforestation and "such a large source of pollution could take us backwards in the transition to a clean energy economy."

Farm and ethanol trade groups say EPA's proposal veers into speculation because estimates of land-use change vary widely. EPA has requested an independent review of the methods it would use to gauge the changes.

The Appropriations Committee defeated Emerson's amendment before approving a $32 billion spending bill for EPA and the Interior Department in fiscal 2010. During the same session, it agreed on a voice vote to seek the USDA study before approving a $123 billion funding bill for USDA and the Food and Drug Administration.

The USDA bill would extend a ban on importation of processed chicken meat from China and eliminate funding for a nationwide livestock tracking system.

(Reporting by Charles Abbott; Editing by Clarence Fernandez)