RFS waiver in limbo

By Kris Bevill | August 04, 2008
In the 30 days after Texas Gov. Rick Perry submitted a request to the U.S. EPA asking for a 50 percent waiver of the U.S. renewable fuels standard (RFS) for 2008 due to high corn prices, the EPA received more than 15,000 comments from the public. According to the agency, this was the reason the EPA postponed its ruling, which was scheduled for July 23.

Two days before the EPA was scheduled to announce its decision, EPA Administrator Stephen Johnson announced the delay of the ruling until early August. According to his press secretary Jonathan Shradar, more time is required to finalize analysis of the comments received, speak with officials at the USDA and U.S. DOE, and conduct final analysis of the effect that spring floods had on crops and food prices. According to Shradar, the analyses have begun. "It's just pulling them all together to have a definitive answer that remains to be done," he said.

Perry requested the waiver in April. He later said the request was also a response to the spring flooding experienced in parts of the Midwest. The Energy Independence & Security Act of 2007 requires 9 billion gallons of ethanol to be consumed in 2008. Perry's request would lower that requirement to 4.5 billion gallons nationwide.

After the request was submitted, the EPA was obligated to ask for comments from the public for a period of 30 days. An EPA spokesman told EPM that most of the comments were repetitive statements submitted by individual members of large companies. However, all comments had to be taken into consideration.

The National Chicken Council was among the organizations that responded in support of the waiver. In its letter to the EPA, the council wrote, "The renewable fuels standard has distorted the market and has imposed severe economic harm on companies in our industry through dramatically higher costs, and is imposing harm on the general public in the form of higher prices."

Pilgrim's Pride Corp., the largest chicken company in the United States, also wrote to the EPA in support of Perry's request. According to the Internal Revenue Service, the company's cofounder Lonnie Pilgrim gave $100,000 to the Republican Governor's Association, of which Perry is chairman.

Several poultry and meat producers sponsored a study that blamed the RFS for increasing the cost of biofuel production well past what the marketplace would have allowed. The report, titled "Biofuel Support Costs to the U.S. Economy: The Key Role of the RFS in a Feedstock Shortage Scenario" by Thomas Elam, said the wet spring and poor crop predictions prove further reason to lower the RFS mandate for 2008 and that maintaining current levels would harm the economy.

In support of the RFS, Renewable Fuels Association President Bob Dinneen said Perry's request was "incomplete, legally insufficient and factually misdirected." The American Farm Bureau Foundation said the EPA must consider what an RFS waiver would mean for the entire nation, not just for Texas. The Biotechnology Industry Organization commented in its letter to the EPA that "abandoning the RFS today would send a signal to the market that could undercut ongoing research and development in biotechnology."