By Charles Abbott
WASHINGTON (Reuters) - The climate bill advancing in the U.S. House of Representatives will reward farmers who plant trees or take other steps to control greenhouse gases, and remove for five years an obstacle to corn-based ethanol, farm-panel Chairman Collin Peterson said on Wednesday.
Later in the day, House Speaker Nancy Pelosi, after meeting with a group of moderate Republicans, told reporters it was her "hope" the climate bill will be debated and passed on Friday. Spokesman Drew Hammill added: "We intend to have a vote this week.
As part of her drive to rally support for the legislation, Pelosi has invited former Vice President Al Gore, who won a Nobel Prize Peace Prize in 2007 for his work on global warming, to a press conference on Thursday in the Capitol.
Rep. Collin Peterson, House Agriculture Committee chairman, also said he and Democratic leaders reached an agreement on the "biomass issue that had been hanging us up."
Peterson said that, under the agreement, the climate change legislation will use the 2008 farm law's definition of biomass, instead of a more restrictive one that had been in the bill.
The broader definition sought by agriculture interests would, for example, allow the use of downed trees and other natural materials in federal forest lands to produce biofuels.
Peterson noted that some environmentalists had been concerned, "this would allow people to go in and cut down certain forests." He added: "That's not our interest."
"We think we have something that can work for agriculture," Peterson told reporters after summarizing a compromise with House Energy chairman Henry Waxman.
Some four dozen rural lawmakers sided with Peterson in seeking revisions in the bill.
Under the compromise:
-- The Agriculture Department would oversee projects by farmers and ranchers to lock carbon into the soil by reduced tillage or planting trees. USDA is more popular in farm country than the Environmental Protection Agency, which runs most pollution control programs. Work dating from 2001 would be eligible for credit for carbon reduction, said Peterson. Inclusion of "early adopters" will broaden the appeal of the bill, said an agricultural lobbyist.
-- A proposed EPA regulation, which would make U.S. ethanol makers responsible for greenhouse gas emissions from conversion of forests and grasslands overseas to cropland, would be sidetracked for five years during a study of the so-called indirect land use change. It could take effect only if three federal agencies agree and Congress could intervene to block a rule.
Corn-based ethanol and some feedstocks for cellulosic ethanol would have trouble under EPA's current scoring of land- use change to meet targets for greenhouse gas savings.
-- Agriculture would not be required to reduce greenhouse gas emissions. The sector is a small producer of the gases.
Waxman and Peterson met conservative House Democrats on Tuesday evening, while working out the compromise. Earlier talks resulted in an agreement to give small rural electric operators a larger portion of credits toward meeting carbon reductions.
In addition, Peterson said Waxman would accept language allowing rural utilities to use federal funds to buy a stake in nuclear power plants.
The Commodity Futures Trading Commission would oversee futures markets that trade carbon contracts, while the Federal Energy Regulatory Commission would oversee the cash market.
"My initial reaction to this deal is it doesn't fix the real problems with the bill," said Frank Lucas, Oklahoma Republican.
Lucas and other Republican lawmakers say the climate bill will drive up energy costs in rural America.
Rural Americans drive longer distances than city dwellers and the farm sector is a large user of fuel and of synthetic fertilizers and pesticides derived from petroleum.
Farm groups said the Waxman-Peterson compromise was a step in the right direction, but they have reservations about the overall bill. Some groups, including the American Farm Bureau Federation and the National Pork Producers Council, have announced opposition the bill. The National Farmers Union, which backs a carbon-trading program, has called for changes.
(Reporting by Charles Abbott; additional reporting by Richard Cowan; editing by Andre Grenon)
