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Four governors seek RFS rollback

Four state governors have asked the Environmental Protection Agency to roll back the Renewable Fuels Standard for gasoline. Governors Beverly Perdue of North Carolina and Mike Beebe of Arkansas filed official petitions with the EPA while Maryland Governor Martin O’Malley and Delaware’s Jack Markell issued letters in support of a request by livestock groups to drop the waiver.

The governors contend the 13.2 billion gallon ethanol requirement for 2012 is adding to already high feed prices for livestock producers. They are asking the EPA drop the requirement for the remainder of 2012 and all of 2013. USDA projects ethanol production will take 42 percent of the nation’s corn production this year.

Once the EPA publishes the official petitions from Perdue and Beebe, there will be a 30-day comment period and the Agency will have 90 days to make a decision on the request.

The Renewable Fuels Association says waiving the RFS will not solve the problem and would likely lead to an increase in fuel prices at the pump. They argue the industry has built up renewable fuels credits which can be used this year and can even run a deficit into next year if needed.

National Corn Growers Association president Garry Niemeyer issued a statement expressing great concern and empathy for all who are suffering from the drought including livestock producers, export customers, the food industry and the ethanol industry. “While we believe that it is still somewhat premature to consider a temporary, partial waiver to the RFS (as there will be much more accurate information available with September’s and October’s USDA crop reports), we do respect the right of those with standing to exercise the language contained in the RFS. The waiver process language in the RFS calls for careful objective analysis of the economic impact of the RFS on the U.S. economy. We have faith in, and support, the process laid out in this language.

 “If indeed the analysis shows that the RFS is not causing severe economic harm, but instead ethanol production is responding to market forces rather than the RFS, then the request for a temporary partial waiver should be rejected. If however, the analysis clearly shows that the RFS is causing severe economic harm in light of the drought, then a temporary, partial waiver should be granted.”