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The EPA has denied a request by Texas Governor Rick Perry to cut the federal Renewable Fuel Standard in half. The RFS mandates the blending of 9 billion gallons of grain-based ethanol into national gasoline supplies this year; the EPA is authorized under law to waive the requirement if it determines that the mandated biofuel volumes would cause “severe harm” to either the economy or the environment. Perry made the reduction request back in April, citing claims that grain-based ethanol production is causing food prices to rise. But EPA administrator Stephen Johnson said that, “After reviewing the facts, it was clear this request did not meet the criteria in the law.”
Perry called the decision “a mistake” and said in an emailed statement: “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 criticized what he called “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.”
But Perry’s own intentions for requesting the waiver have been suspect from the beginning. According to the Houston Chronicle, he made it after meeting with the nation’s largest poultry processor, Pilgrim’s Pride, the month before. He went public with it by holding a national press conference, at which he said that, “Granting this waiver will provide much needed relief to families, while enabling Texas to continue feeding and fueling the nation.”
The livestock industry in Texas relies, of course, on cheap corn feed. As the Houston Chronicle further noted, Pilgrim’s Pride co-founder Lonnie “Bo” Pilgrim spent over $9,000 to fly Perry to that press conference and subsequently donated $100,000 to the Republican Governors Association, which Perry heads as chairman.
Already the ethanol industry has come out to praise the EPA for their ruling. POET, one of the largest ethanol producers in the world, issued a statement saying the ruling preserves the market for cellulosic ethanol. While the cellulosic and grain-based ethanol mandates are differentiated in the RFS, POET spokesman Nathan Schock told us:
It would send a very bad signal to the investment community if parts of the RFS of any kind are rolled back. The cellulosic industry needs the grain-based ethanol industry because it’s building out infrastructure, leading to the production of more flex-fuel vehicles as well as building consumer acceptance for the product.
Of the total 36 billions gallons of ethanol required by 2022 by the RFS, 21 billion gallons are to come from “advanced biofuels,” 16 billion gallons of which are to be cellulosic.
Update: The Auto Alliance, a trade association representing 10 of the largest automakers in the world, agrees with POET and in an emailed statement said they are pleased with the EPA’s decision. The Alliance says its members have already produced 12.5 million alternative fuel cars, including flex-fuel and biodiesel-compatible models, but says only about 1 percent of America’s gas stations pump E85 and even fewer have biodiesel. Continued federal encouragement of biofuels and the necessary infrastructure is needed, the Alliance asserts.