Senators respond to RFS waiver

By Kris Bevill | June 02, 2008
Contradicting statements have almost become the status quo in the food-versus-fuel debate. Shortly after researchers from Texas A&M University released a study stating that ethanol production has not impacted the price of food, fuel or feed in the Lone Star state, Texas Gov. Rick Perry asked the U.S. EPA for a 50 percent waiver from the renewable fuel standard (RFS) in the Energy Independence & Security Act of 2007.

"We appreciate the good intentions behind the push for renewable fuels," said Perry in a statement released by his office April 25. "In fact, we're diversifying our state's energy portfolio at a rapid rate, but this misguided mandate is significantly affecting [Texas families' food bills]. There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of RFS levels is the best, quickest way to reduce those costs before permanent damage is done."

Texas A&M's Agricultural & Food Policy Center research stated that higher energy costs are the driving force behind rising food and feed costs, and that the overall effect of ethanol and its coproducts on agriculture and the economy is complex.

Another study released around the same time echoed those findings. The University of Madison-Wisconsin's Department of Agricultural & Applied Economics released a study that examined the overall effects of ethanol production on U.S. corn prices. It concluded that if ethanol was the only factor in the increased price of corn, the average cost of a bushel of corn for the first quarters of 2007 and 2008 would be $2.95. The study also found that exports have had a more significant effect on the price of corn than ethanol production.

In addition to Perry's request for an RFS waiver, a letter signed by 24 U.S. senators, including presidential nominee John McCain, R-Ariz., was submitted to EPA Administrator Stephen Johnson on May 2, urging him to reconsider the RFS and its impacts on the average American's grocery bill. "We believe the EPA should begin the process of examining
alternatives that ease the severe economic and emerging environmental consequences that are developing in America as a result of the mandate," the letter stated.

Not to be undermined, 16 senators led by Chuck Grassley, R-Iowa, and Tim Johnson, D-S.D., sent their own letter to Johnson that same day. "While we're all sympathetic to those struggling to cope with the higher cost of food both domestically and internationally, we must be intellectually honest about the real causes behind the increases," the letter said. It mentioned the Texas A&M study as proof that relaxing the RFS wouldn't result in lower corn prices.

The American Coalition for Ethanol also responded to the waiver request. "The U.S. ethanol industry welcomes an examination of the facts regarding higher food prices, as opposed to the vast amounts of misinformation that have led these senators to question their own carefully planned energy legislation," said Brian Jennings, executive vice president of ACE. "While we may not be able to top ethanol opponents' well-funded public relations campaigns, we are absolutely certain that an examination of the facts will confirm ethanol's role in reducing gas prices and its minimal impact on food prices."

Following the policy set forth by the Energy Policy Act of 2005, the EPA sought comments on Perry's RFS waiver request for 30 days. Johnson can grant a full or partial waiver if it's determined that implementation would severely harm the economy or environment of a state, region or the entire country. A waiver could also be granted if the EPA determines that there is an insufficient amount of domestic renewable energy. The agency must decide on the waiver request within 90 days of receiving it.