EPA Denies Texas' Request to Halve RFS Goal

U.S. Environmental Protection Agency Administrator Stephen L. Johnson on Aug. 7 denied the request by Texas Gov. Rick Perry to reduce by 50 percent the nationwide Renewable Fuels Standard (RFS) for the period of Sept. 1, 2008 through Oct. 31, 2009.

In a press conference call, Johnson explained that the mandate for 2008 (9 billion gallons of renewable fuels) could only be waived if the agency found severe harm to the economy or the environment. "We conducted a detailed analysis, considered public comments, and examined the impact a waiver would have on ethanol use, corn prices, and fuel prices," Johnson said. "The research found that the mandate is not causing severe economic harm, but rather strengthening energy security and supporting farm communities," Johnson concluded.

Acknowledging the high prices Perry and others alluded to in the waiver request and more than 15,000 public comments, the Administrator asked, "Is that the result of the RFS mandate? Our conclusion is no. Are price increases meeting the statutory requirement of severe harm to the economy? Our answer is no."

As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009.

"I am greatly disappointed with the EPA's inability to look past the good intentions of this policy to see the significant harm it is doing to farmers, ranchers, and American households," said Perry said in response to the decision. "For the EPA to assert that this federal mandate is not affecting food prices -- not only goes against common sense, but every American's grocery bill.

"Denying Texas' request is a mistake that will only increase the already heavy financial burden on families while doing even more harm to the livestock industry. Good intentions and laudable goals are small compensation to the families, farmers, and ranchers who are being hurt by the federal government's efforts to trade food for fuel. Any government mandate that artificially props-up a single industry to the detriment of millions of Americans is bad public policy.

"Congress specifically created an emergency waiver provision for situations like these and EPA refuses to implement it."

The National Biodiesel Board has a different perspective on the decision. "We appreciate the EPA taking a careful approach to the waiver request and agree with their determination that it should be denied," said Joe Jobe, National Biodiesel Board chief executive officer. "It is important to note that all renewable fuels qualify for the current RFS. In fact, if the RFS is waived or cut in half in 2008, then the growth of all biofuels, including "advanced biofuels" such as biodiesel, would be severely hindered.

Pilgrim's Pride Corp. expressed its disappointment. President and Chief Executive Officer J. Clinton Rivers said, "The RFS has caused feed ingredient prices to spiral out of control, inflicting extreme economic damage on food companies, and ultimately, on consumers, in the form of increased food costs.

"We expect our company's feed-ingredient costs for fiscal 2008 will increase $900 million from last fiscal year as a result of the U.S. government's failed ethanol policy," Rivers added. "It's apparent that the government intends to blindly pursue this misguided and destructive policy despite reams of data demonstrating its negative impact on the environment, food prices, and world hunger.

"Not only are the 2008 mandates destructive, but the scheduled mandate next year will again increase another 16.7 percent from corn, consuming an additional 4.5 percent or more of the 2009-2010 corn crop than the anticipated 34 percent of the crop being consumed this year for ethanol production.

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