D.C. Watch: Governors request ethanol mandate waiver

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Washington DC Governors from North Carolina, Arkansas, Delaware, Maryland and Georgia have written to Environmental Protection Agency (EPA) Administrator Lisa Jackson, requesting that the agency grant a full or partial waiver of the Renewable Fuels Standard (RFS) mandate for ethanol use.

The action started a 90-day time period for EPA to evaluate the requests and make a decision. EPA began a 30-day public comment period on Monday. The governors complain that the ethanol mandate is driving up feed costs and imposing severe economic harm on their state’s livestock industries. Agriculture Secretary Vilsack has consistently said that there is not enough information yet to warrant a waiver.

To submit your comments, go to www.regulations.gov. Note that your comment is in response to docket ID number EPA-HQ-OAR-2012-0632. You can also email your comments to a-and-r-docket@epa.gov. The EPA has until November 13 to make a decision about the waiver requests.

There is considerable debate about what impact a waiver of the ethanol mandate would have. Many argue that ethanol use would remain very high even without the mandate because ethanol is needed as an oxygenate and to boost the octane of gasoline. There are no real alternatives available to accomplish either need.

At least at this point, ethanol prices remain below gasoline prices, giving blenders an economic incentive to use ethanol. Blenders hold an estimated 2.5 billion gallons worth of RINS that can be used instead of actually blending ethanol, but that is true with or without a waiver of the mandate. Some industry insiders say ethanol use would stay up near 13 billion gallons even if the mandate is lifted, but that is well below the 13.8 billion gallons required by the RFS for 2013.

Representatives Bruce Braley (D-IA) and Christopher Gibson (R-NY) are trying to get 218 signatures on a discharge petition that would bring the House Agriculture Committee passed farm bill to the floor for a vote. The leadership in the House, primarily John Boehner (R-OH) and Eric Cantor (R-VA) refused to bring the farm bill to the floor for a vote before Congress began the August recess.

It will be very difficult to get the votes needed for the petition because many members of the House will be unwilling to go against the House leadership. However, there will be pressure on Congress to do something that provides help to livestock producers that are facing high feed costs because of the drought.

A District of Columbia Appeals Court has thrown out a lawsuit that challenged EPA’s decision to allow the use of E-15 in cars and light trucks made after 2000, saying the groups filing suit have no standing in the case. The group bringing the suit had contended that EPA did not have the authority to grant partial waivers under the Clean Air Act. The court decision says that EPA’s waiver “does not force, require, or even encourage fuel manufacturers or any related entity to introduce the new fuel”.

The Office of Management and Budget will release a report in early September that will show just how the government will make the huge spending cuts that go into effect in January under the sequestration part of the budget act approved last summer. The law requires spending cuts totaling $1.2 trillion over 10 years, or a little more than $100 billion annually. Half of those cuts come from the defense department budget. Congress will be scrambling to try to change the law in the post-election lame-duck session before those cuts kick in.

The number of farm workers available for harvesting crops this year is down by 20% according to the Western Growers Association Stronger border patrols have reduced the number of people entering the country illegally,. The Eleventh Circuit Court of Appeals ruled that states can’t pass laws preventing immigrants from holding jobs or preventing people from enticing an illegal immigrant to come into a state.

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August, 28, 2012 at 03:22 PM

Last spring livestock speculators paid high prices for feeder calves with the expectation of $4 corn. They took a risk that corn would be cheap. Now it's not. I took a risk to plant some corn( less than I might have). So I get to sell my mediocre crop at a mediocre price just so the speculators don't lose money? What am I going to use to buy seed next month for next years crop?

Joe Dairyman    
USA  |  August, 29, 2012 at 12:04 AM

Gosh Rick why didn't you buy your seed when the price was cheaper?

Mo.  |  August, 29, 2012 at 06:09 AM

Several thoughts come to mind as I read this article, and nothing speaks of politicians helping the industries I am involved with, let alone that we are a young family of 4 trying to survive. I am a parent, I teach, I farm and I ranch for all these folks to eat and all we seem to get in return from D.C. is political rhetoric. I hope the rest of you are getting tired of it and will help us use our votes to make a difference....

NE  |  August, 29, 2012 at 07:41 PM

These republican governors all represent states with large livestock that have small grain bases.There buisness model has always been about cheap inputs .Now that has failed them .Next they want the government to bail them out.The corn farmer with a very short crop does not need to sell to this phony element. true livestock people keep a partial inventory of feed on hand for this type weather.I have farmed since early 50 s now retired. Ihave never have seen this kind of greed ever.The buisness that thinks the corn is thiers for the taking needs to ask themselve if they were on the other side of this debate how would they feel.

MD  |  September, 03, 2012 at 08:11 AM

"These Republican governors" ? @Rich Pottorff - I don't understand how the Farm Bill plays into this. Democratic governors — Mike Beebe of Arkansas and Bev Purdue of North Carolina — began petitions the EPA to grant a waiver from the ethanol mandate. They are joined by a bipartisan group of 26 senators and 156 House members including the head of the Democratic Governors Association, arch-liberal Maryland Gov. Martin O’Malley. -BaxterBulletin.com The EPA is sticking to a policy written when the surplus of corn was vast. It's a pity that no safeguard was written in for natural events like this drought.

September, 27, 2012 at 11:54 AM

You really think that's all there is to this?

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