EPA refuses to waive ethanol requirements

Houston Chronicle:
The Obama administration on Friday rebuffed requests by Texas Gov. Rick Perry and the leaders of several other states to waive a federal renewable fuel mandate that requires ethanol to be blended into the nation's gasoline supply.

In rejecting the waiver requests, the Environmental Protection Agency effectively disagreed with the states' concerns that the mandate was spiking corn demand and prices following a drought that devastated crops in the Midwest. The EPA concluded theRenewable Fuel Standard would not cause "severe economic harm" to states and regions.

"We recognize that this year's drought has created hardship in some sectors of the economy, particularly for livestock producers," said Gina McCarthy, assistant administrator for EPA's Office of Air and Radiation. "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."

This is the second time Perry has lost his bid for a renewable fuel standard exemption. In 2008, the EPA also turned him down.

But this time, Perry was joined by Arkansas, Delaware, Maryland, North Carolina and other states in seeking at least a one-year waiver of the Renewable Fuel Standard.

Perry had insisted a timeout was needed because otherwise, the cost of groceries and feedstock will be pushed higher as refiners keep buying corn-based ethanol to satisfy the mandate, even though corn yields are down.

Anti-hunger activists note that because the mandate relies on a food-based fuel, it exposes the public to spiking prices whenever yields drop.
I still believe the ethanol requirement should be permanently dropped.  It was put in at a time when it was believed that the supplies of oil and gas was shrinking.  That is certainly not the case now.  To the extent that ethanol is believed to be beneficial, which I do not think it is, it should be produced from plentiful natural gas and not corn.  Ethanol can also be produced from coal.

Texas should find ways to promote this alternative source of ethanol.  Congress should also change the requirement to make it more viable.


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