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EPA denies RFS waiver request

U.S. Environmental Protection Agency (EPA) administrator Stephen Johnson announced Thursday his agency's denial of Texas Governor Rick Perry's request to roll back the Renewable Fuels Standard (RFS). Perry had sought the current 9-billion-gallon RFS to be slashed to 4.5 billion gallons of renewable fuels. The law mandates the U.S. fuels complex include 11.1 gallons of renewables in 2009.

According to the EPA, Current law authorizes EPA to waive the national RFS if the agency determines that the mandated biofuel volumes would cause "severe harm" to the economy or the environment. The agency recognizes that high commodity prices are having economic impacts, but officials say EPA's extensive analysis of Texas' request found no "compelling evidence" that the RFS mandate is causing severe economic harm during the time period specified by Texas.

"After reviewing the facts, it was clear this request did not meet the criteria in the law," Johnson said Thursday. "The RFS remains an important tool in our ongoing efforts to reduce America's greenhouse gas emissions and lessen our dependence on foreign oil, in aggressive yet practical ways."

For Perry, it was a disappointing end to a situation he sees as continuing to inflict harm upon both the livestock industry and food consumers, despite the fact the latter claim being rebuffed by EPA analysis.

"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. 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," Perry said Thursday. "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."

Leaders from the cattle business expressed similar disappointment with EPA's Thursday RFS waiver ruling. But, the attention drawn to the issue by the public discourse surrounding the issue is hopefully enough to make a difference in the high feed costs cattle producers are facing.

"Our industry has suffered a record of nearly $1.5 billion in cattle feeding losses between January and June of 2008, which we believe constitutes the severe economic impact necessary to prompt a waiver from the RFS mandate," according to a statement Thursday from the National Cattlemen's Beef Association (NCBA). "Although we are not pleased with the outcome of this process, NCBA is glad that this waiver request brought national attention to the plight of our ranchers."

But, the EPA's decision drew quick and high praise from agriculture and renewable fuels groups, as well as corn country lawmakers. Iowa Senator Charles Grassley (R-IA) called the ruling a victory and "blow to those who have used ethanol as a scapegoat for rising fuel and food prices." And, it's a ruling that will help support farmers whose corn and soybeans are marketed to ethanol and biodiesel facilities.

"The EPA realized that the facts clearly stood in ethanol's corner," Grassley said Thursday. "The bottom line is that ethanol is extending our fuel supply and actually lowering gas prices. Congress provided certainty to ethanol producers when it passed the Renewable Fuels Standard. Today's ruling will allow farmers to continue to plan for and meet the fuel and food needs of the future."

The ruling is also a victory against a politicized effort by biofuels opponents to keep them out of the fuel complex, says American Coalition for Ethanol executive vice president Brian Jennings.

"Just because big food companies feel they are entitled to cheap corn forever does not justify their politically-driven effort to dismantle ethanol policy. Today's ruling by EPA sets a precedent for others who would try to influence ethanol policy relying upon dishonest PR attacks instead of science and hard data," Jennings said Thursday. "Despite a multi-million-dollar PR campaign by [the] big food and big grocery [lobby] to convince consumers otherwise, ethanol has very little to do with what we pay for food at retail.

"Now that corn prices have dropped by 30% and there are forecasts of a large corn crop, we'd like consumers to keep an eye on their grocery bills and start asking questions if their prices don't go down accordingly," Jennings added.

The RFS waiver issue is likely far from over. In a statement on Thursday, NCBA leaders said they'd encourage industry members in other states to take actions similar to those in Texas, even in spite of the fact they voice support for renewable fuels in general, only in the absence of government intervention.

"We will continue our efforts to ease the burden of tight feed supplies for our cattle producers, and will encourage other states to file for waivers from the RFS. NCBA also works on behalf of our producers by exploring all possible legislative vehicles to mitigate the effects of high corn prices," according to Thursday's statement. "NCBA supports biofuels and places a high priority on energy independence for the United States. A comprehensive energy plan is in the best interest of our nation. We believe that -- as in any industry -- open competition on the free market is the best vehicle for innovation and development of renewable energy.

"U.S. agriculture can accommodate demands for both food and fuel over time, but in the interim, the marketplace should be left to decide prices based solely upon economics -- not government intervention via mandates and subsidies."

U.S. Environmental Protection Agency (EPA) administrator Stephen Johnson announced Thursday his agency's denial of Texas Governor Rick Perry's request to roll back the Renewable Fuels Standard (RFS). Perry had sought the current 9-billion-gallon RFS to be slashed to 4.5 billion gallons of renewable fuels. The law mandates the U.S. fuels complex include 11.1 gallons of renewables in 2009.

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