The Environmental Protection Agency has decided to move forward with a mandate for corn ethanol in gasoline, denying requests to suspend the requirement following a drought that drove up corn prices.

The EPA said Friday its renewable-fuel standard was not causing economic harm. The agency said it had determined that suspending the standard would reduce corn prices by only 1%.

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In the midst of a drought this year, livestock producers complained that the mandate for corn ethanol was driving up demand for dwindling supplies of corn.

In August, the governors and Arkansas and North Carolina formally asked the EPA to waive the standard, triggering a 90-day review by the agency.

"We recognize that this year's drought has created hardship in some sectors of the economy, particularly for livestock producers," said Gina McCarthy, EPA's air chief said in a statement. "But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact."

By Tennille Tracy, Dow Jones Newswires; 202-862-6619; tennille.tracy@dowjones.com
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November 16, 2012 11:03 ET (16:03 GMT)
DJ EPA Denies Request to Waive Ethanol Mandate for Gasoline