EPA Postpones Decision on Texas Request To Cut National Renewable Fuel Mandate
By Sean McNally, Senior Reporter
This story appears in the July 28 print edition of Transport Topics.
The Environmental Protection Agency postponed until early August its decision on whether to grant a request from Texas to cut the national renewable fuels mandate in half, citing the huge number of comments EPA has received on the issue, which has pitted livestock growers against grain producers.
Texas Gov. Rick Perry (R) requested the mandate for renewable fuels production be cut in half because demand for grain to produce ethanol was boosting feed prices for live-stock producers.
EPA Administrator Stephen Johnson said in a July 22 statement that the agency had received 15,000 comments on Perry’s request, and “additional time is needed to allow staff to adequately respond to the public comments and develop a decision document that explains the technical, economic and legal rationale of our decision.”
The original deadline for ruling on Texas’ request was July 24.
Under the Renewable Fuel Standard, part of energy legislation passed in December, EPA ordered 9 billion gallons of ethanol to be blended into U.S. gasoline supplies between Sept. 1, 2008, and Aug. 31, 2009. Perry asked EPA to cut that to 4.5 billion gallons.
In a statement, Perry said he “appreciated the diligent approach Administrator Johnson and his staff are taking in addressing our waiver request.”
“We still believe the solution to the unintended consequence of this federal RFS mandate is simple: a one-year, 50% waiver,” Perry said. “The RFS waiver is an essential step toward decreasing the devastating statewide, national and international impact of skyrocketing feed and food costs.”
Governors of states that produce corn and ethanol, and representatives of those industries, urged EPA to deny Texas’ request.
North Dakota Gov. John Hoeven and South Dakota Gov. Mike Rounds, both Republicans, said they opposed the waiver.
Rounds, who commented as chairman of the Midwestern Governors Association, along with vice-chairwoman Gov. Jennifer Granholm, a Democratic, said, “The blame placed on ethanol for higher food prices is misguided,” adding there were a number of factors, including rising demand for food and increased fuel costs.
“In short, granting any waiver to the RFS will not reduce current food commodity prices,” Rounds and Granholm wrote.
“At a time when higher fuel prices at the pump are creating a hardship for consumers and a burden for America’s economy, we must increase production of alternative fuels,” Hoeven said.
Representatives of the ethanol industry said that without the standard’s mandate, the market for renewable energy will be destroyed.
Livestock producers and ranchers argued that the ethanol mandate is pushing corn prices higher.
“The existence of a government-guaranteed market for corn-based ethanol continues to contribute to an unprecedented run-up in the price of corn,” said National Chicken Council President George Watts. He said those who point to speculation as the reason miss the point.
“The mandate is causing the speculation. Without the mandate, or with a lesser mandate, less speculation would occur,” Watts said.
Representatives of the Petroleum Marketers Association of America and the National Petrochemical Refiners Association both said the mandate was bad policy and was causing fuel prices, not just food prices, to rise.
This story appears in the July 28 print edition of Transport Topics.
The Environmental Protection Agency postponed until early August its decision on whether to grant a request from Texas to cut the national renewable fuels mandate in half, citing the huge number of comments EPA has received on the issue, which has pitted livestock growers against grain producers.
Texas Gov. Rick Perry (R) requested the mandate for renewable fuels production be cut in half because demand for grain to produce ethanol was boosting feed prices for live-stock producers.
EPA Administrator Stephen Johnson said in a July 22 statement that the agency had received 15,000 comments on Perry’s request, and “additional time is needed to allow staff to adequately respond to the public comments and develop a decision document that explains the technical, economic and legal rationale of our decision.”
The original deadline for ruling on Texas’ request was July 24.
Under the Renewable Fuel Standard, part of energy legislation passed in December, EPA ordered 9 billion gallons of ethanol to be blended into U.S. gasoline supplies between Sept. 1, 2008, and Aug. 31, 2009. Perry asked EPA to cut that to 4.5 billion gallons.
In a statement, Perry said he “appreciated the diligent approach Administrator Johnson and his staff are taking in addressing our waiver request.”
“We still believe the solution to the unintended consequence of this federal RFS mandate is simple: a one-year, 50% waiver,” Perry said. “The RFS waiver is an essential step toward decreasing the devastating statewide, national and international impact of skyrocketing feed and food costs.”
Governors of states that produce corn and ethanol, and representatives of those industries, urged EPA to deny Texas’ request.
North Dakota Gov. John Hoeven and South Dakota Gov. Mike Rounds, both Republicans, said they opposed the waiver.
Rounds, who commented as chairman of the Midwestern Governors Association, along with vice-chairwoman Gov. Jennifer Granholm, a Democratic, said, “The blame placed on ethanol for higher food prices is misguided,” adding there were a number of factors, including rising demand for food and increased fuel costs.
“In short, granting any waiver to the RFS will not reduce current food commodity prices,” Rounds and Granholm wrote.
“At a time when higher fuel prices at the pump are creating a hardship for consumers and a burden for America’s economy, we must increase production of alternative fuels,” Hoeven said.
Representatives of the ethanol industry said that without the standard’s mandate, the market for renewable energy will be destroyed.
Livestock producers and ranchers argued that the ethanol mandate is pushing corn prices higher.
“The existence of a government-guaranteed market for corn-based ethanol continues to contribute to an unprecedented run-up in the price of corn,” said National Chicken Council President George Watts. He said those who point to speculation as the reason miss the point.
“The mandate is causing the speculation. Without the mandate, or with a lesser mandate, less speculation would occur,” Watts said.
Representatives of the Petroleum Marketers Association of America and the National Petrochemical Refiners Association both said the mandate was bad policy and was causing fuel prices, not just food prices, to rise.
