Table of Contents

Some self-declared liberals interviewed in Lincoln and Omaha argued that climate change posed an existential threat to the planet and that the United States should lead the world in transitioning to a low-carbon economy. These participants deeply regretted the Trump administration’s decision to withdraw the United States from the Paris Agreement on climate change. But they were by far in the minority.

No one interviewed disputed the increasing frequency of extreme weather events or the economic devastation these events had wrought on the state’s agricultural community. However, the majority of those interviewed did not regard climate change as a dire security threat and rarely mentioned it at all. If they spoke about the intersection of climate change with middle-class interests, it tended to be from the perspective of how regulatory measures could impact jobs related to ethanol production, farming, ranching, and the rail transport of coal.

Ethanol

“I know that farmers for instance in our area . . . are huge supporters of ethanol, but I’ve read contradictory research on . . . whether it’s a net benefit from an emission stand point. . . . Among Nebraskans, there are strong feelings about this, one way or another and like I said I’m agnostic . . . I don’t know what truth is there.” –Business leader in Lincoln1

While few Nebraskans directly pointed to climate change as a foreign policy issue that affects them economically, some did mention how regulatory measures related to climate change may impact the ethanol industry, a growing part of the state’s agricultural production complex. That, in turn, was how they saw the connection, albeit indirectly, between climate change and the economic interests of Nebraska’s middle class.

Among the twenty-eight U.S. states with ethanol facilities, Nebraska is the nation’s second-largest ethanol producer. (Iowa is the largest, with Illinois, Indiana, Minnesota, and South Dakota being the other top ethanol-producing states.) Nebraska produces 14 percent of total U.S. fuel ethanol.2 The twenty-four ethanol plants operating across Nebraska, mapped in Figure 7, generated $4–5 billion in economic impact and contributed directly and indirectly to over 5,000 jobs in 2017.3

Ethanol plants also directly support Nebraska’s agricultural production complex. Ranchers benefit from obtaining distillers grain, which is the low-cost, high-protein feed ingredient generated as a co-product from ethanol production. Ethanol also benefits farmers as it drives up demand, and therefore prices, for corn (its major input).4 Thus, increasing demand for ethanol is important for Nebraska’s agricultural and energy sectors and translates to local jobs. As an agricultural/ethanol industry representative from central Nebraska asserted, “Ethanol is the best rural development tool, bar none, that we have ever seen, because you got plants in Hastings, you got plants in Lexington and Bridgeport. And it’s a processing facility, value-added, that can be brought out to an agricultural community.”5

Demand for ethanol production rose dramatically in the United States following Congress’s creation of the Renewable Fuel Standard Program (RFS) in 2005 and its expansion (known as RFS2) in 2007.6 The program was established to diminish U.S. dependence on foreign oil and reduce greenhouse gas emissions. It mandates that a specific percentage of all transportation fuel include renewable fuels, such as corn-based ethanol, which contribute fewer emissions than the petroleum-based fuels that they replace.7 Such mandates are cause for concern in parts of the country that are heavily dependent on oil and gas extraction, like Weld County in Colorado.8 But they provide an economic lifeline for other parts of the country, like Nebraska’s corn-growing and ethanol-producing rural counties. As demand for ethanol has grown nationally, production has increased in Nebraska—by 262 percent between 2006 and 2017 (and by 20 percent between 2014 and 2017).9

It remains unclear when and if there will be another upward spike in demand for ethanol. Most of the gasoline now sold in the United States contains some of the fuel. E10 (fuel that contains 10 percent ethanol) is in widespread use across the country, largely as a result of the requirements of the 1990 Clean Air Act and the RFS expansion in 2007.10 Much attention is therefore now focused on current and future government mandates and incentives pertaining to E15 (fuel that contains 15 percent ethanol) and E85 (fuel that contains up to 85 percent ethanol), which are not yet widely used beyond the Midwest.

Future demand for the corn-based ethanol that Nebraska produces will be influenced by ongoing debates about its environmental performance: do the reductions in greenhouse gas emissions resulting from ethanol’s use adequately offset the environmental costs, such as those associated with increased air pollution, reduced energy efficiency, and changes in land usage to produce more corn?11 The Trump administration has backed recent research commissioned by the USDA that concluded that corn-based ethanol continues to exceed the threshold set by the Environmental Protection Agency for determining if the benefits sufficiently outweigh the overall costs.12 Ethanol’s critics, however, cite research by others, including the U.S. Government Accounting Office, that suggests the net environmental benefits of ethanol are far less pronounced or clear.13 The regulatory outcomes of this debate will affect the future of Nebraska’s ethanol industry and the job security of middle-class ethanol plant and agricultural workers.

The authors of this report do not seek to render a judgment on the environmental impacts of ethanol, as it is not the subject of this study. The issue nonetheless warrants the attention of foreign policy professionals because it illustrates the ways in which the climate change debate is directly related to middle-income jobs in Nebraska. It also shows that the climate change debate does not simply pit liberals against conservatives. In this instance, many of ethanol’s strongest supporters and opponents both can be found in the Republican Party.

Ranching and Farming

While the debate on the environmental performance of ethanol has been ongoing for some time, it represents just a small part of a larger debate about the links between agriculture and climate change. The ways in which this debate plays out, and the resulting changes in the regulatory environment, could have profound implications for middle-class jobs across Nebraska’s agricultural production complex.

Nebraska’s ranching industry, which sits at the center of the agricultural production complex, is now in the firing line, for example. Recent studies increasingly draw attention to the link between livestock production and greenhouse gas emissions.14 A heated public debate has unfolded over the extent to which cows contribute to methane emissions. A representative of the Nebraska Cattlemen Association therefore worried about the beef industry being “unfairly villainized.”15 As an interviewee in Omaha stressed, “It’s important to take care of our planet, but it’s also difficult to balance that with the way of life here in Nebraska.”16

The president of the Nebraska Farm Bureau asserted that the livelihoods of the state’s farmers, in general, were on the line. Most farming and irrigation systems are energy-intensive, even as they reach record levels of energy efficiency, and many fertilizers are petroleum-based. A change in energy resources and related prices would directly impact the functioning of the farms. He cautioned that farmers did not have much margin for absorbing higher energy costs. Thus, while recognizing the different sides of the argument for cleaner energy, he nonetheless believed that his members “would fall on the side of making sure that we have what we need, at affordable prices for producers.”17

The bureau’s president nonetheless cautioned against portraying farmers and ranchers as unconcerned about the environment. To the contrary, he stressed that “when it comes to farmers, farming, agriculture, taking care of the land . . . it’s really all about making sure that those resources, whatever they are, are there for future generations . . . whether that would be energy, whether that would be water, whether that’s soil conservation, all of them . . . farmers are the first conservationists.”18 They are also deeply concerned about achieving energy efficiencies, for both economic and environmental reasons. As one Columbus interviewee characterized the farming community, “We believe that we have to be environmental stewards. . . . If we don’t respect and treat our land [in an] environmentally sound way, it’s not going to produce and then we’re not profitable.”19

Transportation and Coal

The various debates surrounding the links between climate change and agriculture are well known, but there are others playing out in Nebraska that might come as a surprise to foreign policy professionals in Washington, DC. As noted earlier, Nebraska is not just an agricultural state; it is also an important transportation state. Some of the best-paying jobs in the transportation sector are found on the railroads. Those rail jobs are now fully intertwined with actions to combat climate change, given that coal is one of the top products transported by rail.

Nebraska is not a coal-producing state, but a large share of the coal mined in the Powder River Basin of northeastern Wyoming and southeastern Montana, the nation’s largest coal mining region, passes through Nebraska en route to the South and the Midwest. In 2014, 85 percent of Wyoming’s exported coal was transported through Nebraska.20 As of 2015, coal was the top commodity moved to, from, and within Nebraska (by weight). 21 Union Pacific Railroad’s Bailey Yard in North Platte is one of those transshipment points, and it anchors the city’s economy. A former rail worker estimated that “of the 103 . . . trains that . . . go through a day or whatever it is now, you know, 70 percent or 60 percent of that was coal because [of] us being right on that Powder River Basin.”22 The railroad also employs a few thousand rail workers, accounting for 13 percent of the city’s labor force.23 Many of those rail jobs come with high salaries and generous benefits. It therefore came as a blow to the area when Union Pacific laid off a few hundred workers at the Bailey Yard in 2019 alone.24

“Of the 103 . . . trains that . . . go through a day or whatever it is now, you know, 70 percent or 60 percent of that was coal because [of] us being right on that Powder River Basin.”

Many traced those losses to decreased coal production. As one community leader explained, “The biggest employer in [our area] . . . is Union Pacific Railroad, and several things have been affecting them and one of them is decline in unit coal trains and that is related to policies and climate issues and there’s probably no end in sight.”25 As far as North Platte interviewees were concerned, well-paying rail jobs in their area will continue to be lost because of the drop in demand for coal due to regulations related to fighting climate change, among other reasons.

While the state clearly benefits from demand for coal and its transport by rail, it would be misleading to suggest or imply that Nebraskans expect the status quo to prevail indefinitely. To the contrary, those interviewed for this study expected the United States to transition to greater usage of renewable energy sources—not only ethanol but wind and solar power, too. Several focus group participants expressed pride that Nebraska was moving in that direction. An interviewee in Lincoln, for example, highlighted the various ways in which this was happening across the state:

“Traveling from Kearney, they have built a solar farm. And they do it in a public-private partnership. It started out private, then they reached out to the city of Kearney. Central City in Nebraska has done it. Norfolk has done it. Our public power is embracing this and trying to demonstrate that they are an advocate because their customers want them to be an advocate of using more renewables, wind and solar. I know Lincoln Electric System, our public power utility, has about 45 percent of their retail coming from renewables.”26

For those in the agricultural community, the key issue was to ensure that affordable energy remained available to them, regardless of the source. They were not wedded to coal.

No one interviewed disputed that demand for coal would steadily diminish and coal-fired power plants would give way to plants powered by natural gas and renewable fuels. That recognition led people in North Platte to wonder about their economic futures, which to date have been heavily dependent on the regional hospital and railroad. They are rooting for Union Pacific to succeed in finding “other things they can ship when they can’t ship coal, because [if?] we’re not burning it for energy, then the jobs go away,” as one resident put it.27 The challenges facing rural infrastructure and the relative isolation of North Platte from other cities may underlie some of this uncertainty, too.

Concerns Associated With the Climate Change Debate

Nebraskans have a clear, near-term economic stake in how the U.S. government regulates energy, agriculture, and transportation to combat climate change. They can see and quantify that economic stake. Thus, when it comes to making sense of ongoing policy debates, the long-term causes and consequences of climate change are not the first things interviewees spoke about when asked to comment on the subject. Immediate concerns dominate. Many of those interviewed worried about overregulation in the name of fighting climate change due to outside political pressures and influence. As noted earlier, such regulations materially impact their livelihoods, whether through the decreasing number of coal trains running through their communities or the changing requirements for livestock facilities. Others expressed general frustration with the politicized nature of the climate debate.

The debate over the Keystone XL Pipeline was certainly one clear example where politics loomed large, ever since the pipeline was proposed in 2008, eventually culminating in a legal challenge that ended up in the Nebraska Supreme Court.28 But while the national debate put climate change at the center, the debate in Nebraska had a lot more to do with questions of land use rights and local environmental impacts.

One focus group participant in Scottsbluff/Gering captured a prevailing sentiment in the room when he declared, “I think there’s so much partisan fighting. . . . And we don’t know what’s truth and what’s not. You know, the right loves coal and oil and all this stuff, and the left loves wind and solar. And you know what . . . the right will convince the people in the middle that solar . . . and battery-powered things are just as destructive to the environment as coal and oil. . . . I don’t think anybody knows what the truth is and I don’t . . . trust Washington to tell me what the truth is.”29 Another participant in the same group added, “[We] can’t trust scientists. . . . Because if I’m a scientist and the government says, we’re having you research the environment and global warming, but if we don’t get the results we want, you’re going to lose your $3 million grant.”30

Meanwhile, on the other side of the state in Omaha, another focus group participant explained that it was not just about coming to common agreement on the severity of the threat. People in his community were also confused about whether the measures being proposed were justified. He said, “I think people . . . question our ability to impact it [climate change] . . . especially in Nebraska, since we are such a small emission state. . . . Me and everybody can do their own small thing, but . . . these mega corporations and [their] building[s] . . . [are] having a bigger effect.”31

“I think people . . . question our ability to impact it [climate change] . . . especially in Nebraska, since we are such a small emission state. . . . Me and everybody can do their own small thing, but . . . these mega corporations and [their] building[s] . . . [are] having a bigger effect.”

An interviewee in Columbus conjectured that gross inconsistencies in the measures being proposed added to a sense of confusion and mistrust. He noted, for example, that it has become increasingly fashionable for people, especially in cities, to advocate the use of electric cars to reduce greenhouse gas emissions. But they often do so without asking how the energy for those electric cars would be generated. One cost-effective and emissions-free option would, in fact, be nuclear power—“a great carbon-free resource,” he reminded.32 But rather than embrace the need for nuclear energy and deal with the political challenges associated with disposing of nuclear waste, the United States has been shutting down nuclear power plants in which it has invested billions of dollars. This is doubly unfortunate because nuclear power plants also are a source of well-paying jobs, as is the case at Nebraska’s Cooper Nuclear Station near Brownville, which employs almost 700 workers.33

Notwithstanding these various frustrations with the nature of the climate change debate, transportation, energy, and livestock businesses are nonetheless planning for the impacts of a changing climate and potential regulatory changes. Focus group participants readily acknowledged the importance of agricultural producers taking care of their local environments. Agricultural producers themselves confirmed that they are considering additional value-added agricultural processes for which there is a growing market—and which, concurrently, could enhance what they are already doing to exercise responsible stewardship of the environment and prepare for the effects of climate change.

Notes

1 S. Ahmed and J. Walther, interview with a resident, Lincoln, July 9, 2019.

2 U.S. Energy Information Administration, “Six States Account for More Than 70% of U.S. Fuel Ethanol Production,” August 15, 2018, https://www.eia.gov/todayinenergy/detail.php?id=36892.

3 Kathleen Brooks, Tim Meyer, Cory Walters, and Eric Thompson, “Economic Impacts of the Nebraska Ethanol and Ethanol Co-Products Industry, 2015–2017,” University of Nebraska–Lincoln, https://agecon.unl.edu/research/2019-nebraska-ethanol-industry-report.pdf.

4 Brooks, et al., “Economic Impacts of the Nebraska Ethanol and Ethanol Co-Products Industry, 2015–2017”; Nebraska Ethanol Board, “Nebraska Ethanol Plants,” updated December 4, 2019, http://ethanol.nebraska.gov/wordpress/about/nebraska-ethanol-plants/.

5 T. Abdel-Monem, S. Ahmed, and J. O’Donnell, interview with an agricultural/ethanol representative, Kearney, July 16, 2019.

6 United States Environmental Protection Agency, “Overview for Renewable Fuel Standard,” updated June 7, 2017, https://www.epa.gov/renewable-fuel-standard-program/overview-renewable-fuel-standard.

7 James A. Duffield and Robert Johansson, “U.S. Ethanol: An Examination of Policy, Production, Use, Distribution, and Market Interactions,” U.S. Department of Agriculture, September 2015, https://www.usda.gov/oce/reports/energy/EthanolExamination102015.pdf.

8 Ahmed, et al. “U.S. Foreign Policy for the Middle Class: Perspectives From Colorado.”

9 U.S. Energy Information Administration, State Energy Data System, “Primary Energy Production in Physical Units,” 1960–2017, https://www.eia.gov/state/seds/seds-data-complete.php?sid=US, accessed February 12, 2020.

10 U.S. Energy Information Administration, “Frequently Asked Questions: How Much Ethanol Is in Gasoline and How Does It Affect Fuel Economy,” updated May 14, 2019, https://www.eia.gov/tools/faqs/faq.php?id=27&t=10.

11 For a good summary of the ongoing debate, see Timothy E. Wirth and C. Boyden Gray, “Point/Counterpoint: Should Green Critics Reassess Ethanol,” Yale Environment 360, May 25, 2016, https://e360.yale.edu/features/the_case_for_ethanol_why_green_critics_are_wrong; and C. Ford Runge, “The Case Against More Ethanol: It’s Simply Bad for Environment,” Yale Environment 360, May 25, 2016,

https://e360.yale.edu/features/the_case_against_ethanol_bad_for_environment.

12 U.S. Department of Agriculture, “USDA Study Shows Significant Greenhouse Gas Benefits of Ethanol Compared With Gasoline,” April 2, 2019, https://www.usda.gov/media/press-releases/2019/04/02/usda-study-shows-significant-greenhouse-gas-benefits-ethanol.

13 U.S. Government Accountability Office, “Renewable Fuel Standard: Information on Likely Program Effects on Gasoline Prices and Greenhouse Gas Emissions,” May 2019, https://www.gao.gov/products/GAO-19-47.

14 Intergovernmental Panel on Climate Change, “Special Report: Climate Change and Land,” 2019, https://www.ipcc.ch/srccl/.

15 J. O’Donnell and J. Walther, interview with J. Herrmann, vice president of Legal and Government Affairs, Nebraska Cattlemen Association, Lincoln, July 25, 2019.

16 Focus group conducted by T. Abdel-Monem, S. Ahmed, J. O’Donnell, D. Rosenbaum, and J. Walther, Omaha, July 10, 2019.

17 T. Abdel-Monem, S. Ahmed, and J. O’Donnell, and D. Rosenbaum, interview with Steve Nelson, president of the Nebraska Farm Bureau, Lincoln, July 31, 2019.

18 Ibid.

19 J. O’Donnell and J. Walther, interview with a resident, Columbus, July 25, 2019.

20 U.S. Department of Agriculture and U.S. Department of Transportation, Study of Rural Transportation Issues, “Chapter 5: Coal Transportation,” 2010, using 2007 data from Federal Railroad Administration analysis of STB Rail Waybill Sample, https://www.ams.usda.gov/sites/default/files/media/RTIReportChapter5.pdf; Nebraska Department of Transportation, “Nebraska Freight Plan,” November 2017, Revised December 2019.

21 Nebraska Department of Transportation, “Nebraska Freight Plan,” November 2017, revised December 2019, https://dot.nebraska.gov/media/10761/nebraska-freight-plan.pdf.

22 S. Ahmed, A. Gelman, J. O’Donnell, E. Thompson, and J. Walther, interview with a county government representative and private business owner, Joseph R. Hewgley, North Platte, July 24, 2019.

23 The North Platte Telegraph, “Another Round of Furloughs at Bailey Yard,” August 20, 2019, https://www.nptelegraph.com/news/local_news/another-round-of-furloughs-at-bailey-yard/article_aa919daa-c386-11e9-bbea-930b9783acf5.html; and U.S. Census, “Quick Facts: North Platte City, Nebraska,” data extracted January 2020, https://www.census.gov/quickfacts/fact/table/bouldercountycolorado,denvercountycolorado,arapahoecountycolorad,douglascountycolorado,jeffersoncountycolorado/PST045218.

24 The North Platte Telegraph, “Another Round of Furloughs at Bailey Yard.”

25 S. Ahmed, A. Gelman, J. O’Donnell, E. Thompson, and J. Walther, interview with Eric Seacrest, Mid-Nebraska Community Foundation, North Platte, July 24, 2019.

26 S. Ahmed, T. Abdel-Monem, J. O’Donnell, D. Rosenbaum, and J. Walther, interview with a business owner, Lincoln, July 9, 2019.

27 S. Ahmed, A. Gelman, J. O’Donnell, E. Thompson, and J. Walther, interview with a resident, North Platte, July 24, 2019.

28 Mitch Smith, “Keystone XL Pipeline Is Approved by Nebraska Supreme Court,” New York Times, August 23, 2019, https://www.nytimes.com/2019/08/23/us/keystone-xl-pipeline-nebraska.html; and State of Nebraska Judicial Branch, “Transcanada Keystone Pipeline, LP v. Tanderup,” https://supremecourt.nebraska.gov/transcanada-keystone-pipeline-lp-v-tanderup.

29 Focus group conducted by S. Ahmed, A. Gelman, J. O’Donnell, E. Thompson, and J. Walther, Scottsbluff, July 23, 2019.

30 Ibid.

31 Focus group conducted by T. Abdel-Monem, S. Ahmed, J. O’Donnell, D. Rosenbaum, and J. Walther, Omaha, July 10, 2019.

32 S. Ahmed, J. O’Donnell, and J. Walther, interview with a resident, Columbus, July 15, 2019.

33 Nebraska Public Power District, “Nuclear Energy: Nebraska’s Largest Source of Emission-Free electricity,” https://www.nppd.com/powering-nebraska/energy-resources/nuclear.