EPA rejects request to waive renewable fuels requirement

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By Ed Tibbetts | Friday, August 8, 2008 1:30 AM CDT | () comments

(AP Photo)

The federal government announced Thursday it rejected a request to waive the federal law requiring the use of 9 billion gallons of renewable fuels in the nation’s gasoline supply this year.

The decision has been eagerly awaited by farmers and ethanol producers.

U.S. Environmental Protection Agency Administrator Stephen Johnson said Thursday the agency study of the anticipated effect of the Renewable Fuel Standard shows it isn’t causing the severe harm to the economy that would allow a waiver under the law.

“This research found that the RFS mandate is not causing severe economic harm,” he said.

Instead, he said, it is contributing to the country’s energy security and to its rural communities.

Federal law requires that

9 billion gallons of renewable fuels be blended into the nation’s fuel supply between Sept. 1 and Aug. 31, 2009. Texas Gov. Rick Perry asked in April that the requirement be cut in half. He called it a necessary step to limit the “devastating” effect on food and feed costs.

Rising costs in supermarkets and at feed lots have prompted a vigorous debate over the government’s policy toward renewable fuels. Critics say the diversion of corn to fuel is pushing up prices. Industry backers point the finger at rising oil prices.

The EPA said Thursday to grant the waiver it would have to find the standard itself would severely harm the economy.

Instead, the EPA said waiving the law would have little effect on corn prices in the

2008-09 time period. The average drop in corn prices in all the scenarios it modeled was just

7 cents, the EPA said.

Ethanol producers praised the ruling Thursday.

“Today’s outcome was what we had hoped for, and quite frankly it’s what we expected would happen,” said Judd Hulting, commodities manager for Patriot Renewable Fuels in Annawan, Ill., which plans to open this month.

The plant expects to produce 100 million gallons of ethanol a year.

Legislative supporters also hailed the decision.

“Today’s ruling is a victory for clean energy, rural America and national security and a blow to those who have used ethanol as a scapegoat for rising fuel and food prices,” said U.S. Sen. Chuck Grassley, R-Iowa.

A disappointed Perry said the Renewable Fuel Standard, while well intentioned, is doing significant harm.

“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,” he said.

The mandate, put in place in 2005, will require that 11.1 billion gallons be used next year and 36 billion gallons by 2022.

The EPA limited its analysis to the one-year period it said was related to Perry’s request. The agency said it received more than 15,000 comments on the waiver request.

Ed Tibbetts can be contacted at (563) 383-2327 or etibbetts@qctimes.com.