EPA denies RFS waiver request

By Kris Bevill | August 04, 2008
Web exclusive posted August 7, 2008 at 12:37 p.m. CST

The U.S. EPA has denied the renewable fuels standard (RFS) waiver request submitted by Texas Gov. Rick Perry. EPA Administrator Stephen Johnson said as a result, the required total volume of renewable fuels to be blended into the nation's fuel supply will remain at 9 billion gallons for 2008 and 11.1 billion gallons in 2009. "The renewable fuels standard is not causing severe economic harm," he said.

Johnson added that the RFS remains an important tool in America's effort to reduce its greenhouse gas emissions and lessen its dependence on foreign oil.

"This is an important victory for all Americans," Renewable Fuels Association President Bob Dinneen said. "Today's EPA decision recognizes the importance of biofuels to the American economy. The renewable fuels standard is critical to our nation's goals of reducing oil imports, addressing environmental challenges and developing the promising next generation of biofuels from cellulosic feedstocks."

U.S. Sen. Chuck Grassley, R-Iowa, was also happy with the EPA decision. "Today's ruling is a victory for clean energy, rural America and national security, and a blow to those who have used ethanol as a scapegoat for rising fuel and food prices," he said. "The EPA realized that the facts clearly stood in ethanol's corner."

Poet LLC, one of the world's largest ethanol producers, applauded the EPA's decision, as well. "For months, special interest groups seeking to defend the energy status quo have attempted to lay all of the blame for rising food costs at the feet of the ethanol industry," said Rob Skjonsberg, Poet's vice president of government affairs. "The fact of the matter is that virtually every independent study has shown that ethanol's impact on food prices is minimal while its impact on lowering gas prices is substantial." He added that today's ruling gives Poet confidence to continue its work toward developing commercial-scale cellulosic ethanol facilities. "With stability in the marketplace, our industry can do even more to improve the environment and lessen our country's dependence on foreign oil," he said.

A coalition of poultry, livestock and grocery producers is expected to host a news conference later today to discuss the repercussions of the ruling.

Perry submitted the RFS waiver request to the EPA in late April, asking for a 50 percent reduction in renewable fuel requirements for 2008. If the waiver had been approved, the RFS requirement would have been reduced to 4.5 billion gallons.

Policy required the EPA to seek public comments for 30 days following Perry's request. During that time, more than 15,000 comments were submitted to the agency. The EPA evaluated the public comments, as well as the opinions of the USDA and U.S. DOE before issuing its decision. The agency postponed its original deadline for a decision, which would have been issued July 24. At that time, Johnson said the agency needed more time to thoroughly analyze all of the information.

The RFS was initially established in the Energy Policy Act of 2005. Volume levels were increased in the Energy Independence & Security Act of 2007. Included in the 2005 law was a provision allowing the EPA administrator to grant a full or partial waiver of the RFS if implementation of the standards would severely harm the economy or environment of a state, region or country, or if it were determined that the supply of domestic renewable fuel was insufficient compared with volume requirements.

Perry's request was the first to be submitted to the EPA following the implementation of the RFS. Fuel waivers in general are commonly handled by the EPA. However, this request was unprecedented because the results will have national, rather than localized, effects.