EPA Keeps RFS Levels in Place

By CnAgri Print

The U.S. Environmental Protection Agency announced that the agency has not found evidence to support a finding of severe economic harm that would warrant granting a waiver of the Renewable Fuels Standard. The decision is based on economic analyses and modeling done in conjunction with the U.S. Department of Agriculture and U.S. Department of Energy, the agency says.

"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."

To support the waiver decision, EPA conducted several economic analyses. Economic analyses of impacts in the agricultural sector, conducted with USDA, showed that on average waiving the mandate would only reduce corn prices by approximately one percent. Economic analyses of impacts in the energy sector, conducted with DOE, showed that waiving the mandate would not impact household energy costs.

Meanwhile, a coalition of livestock, poultry and dairy organizations expressed extreme disappointment with the request denial.

"We are extremely frustrated and discouraged that EPA chose to ignore the clear economic argument from tens of thousands of family farmers and livestock and poultry producers that the food-to-fuel policy is causing and will cause severe harm to regions in which those farmers and producers operate," the coalition said. "In fact, dozens of poultry, pork, beef and dairy operations have filed for bankruptcy, been sold or simply gone out of business over the past several months because of rising feed grain prices."

The groups claim that USDA's latest crop report puts this year's corn harvest at just 10.7 billion bushels, down 13 percent from last year and down 28 percent from USDA's May projection.

"The ethanol industry will use more than 40 percent of the corn supply next year," the groups said in a statement.

This is the second time that EPA has considered an RFS waiver request. In both cases, analysis concluded that that the mandate did not impose severe harm.