U.S. EPA seeks input on ethanol mandate waiver requests

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The U.S. Environmental Protection Agency (EPA) said it has begun weighing requests to suspend the U.S. ethanol mandate, which requires refiners to blend ethanol into gasoline, and is seeking public feedback.

The governors of North Carolina and Arkansas asked the agency last week to temporarily waive the U.S. quota on ethanol made from corn, because the worst drought in 50 years has driven corn prices higher and hurt livestock producers who depend on the grain for feed.

The EPA asked on Monday for public comment on the need for an ethanol waiver. The 30-day comment period will begin once the notice is published in the Federal Register.

"This notice is in keeping with EPA's commitment to an open and transparent process to evaluate requests the agency receives under the Clean Air Act, and does not indicate any predisposition to a specific decision," agency spokeswoman Alisha Johnson said in a statement.

By law the agency has until Nov. 13 to make a decision on the waivers, meaning EPA could act on the requests after national elections on Nov. 6.

Aimed at reducing U.S. reliance on foreign oil, the Renewable Fuels Standard, or RFS, would require 13.2 billion gallons of ethanol to be made from corn this year.

The EPA is seeking input on whether the RFS would severely hurt the economies of Arkansas, North Carolina or any other part of the United States and what effect a waiver would have on ethanol demand and corn prices.

The agency is also asking, if a waiver is needed, how much should the mandate be eased and when should it apply.

A petition by Texas Governor Rick Perry in 2008 was rejected when the agency said waiver requests had to show the mandate itself was severely harming a region's economy and not just contributing to economic damage.

U.S. livestock groups have argued that complying with the mandate at a time of historic national drought is causing major economic harm to meat and dairy producers.

It is unclear that a waiver would weaken corn prices. Refiners will likely continue buying almost as much ethanol even without the mandate since they use it as an additive to make cleaner-burning fuel required in much of the country.

Ethanol industry groups say the mandate offers some flexibility for fuel blenders responsible for complying with the RFS, including the ability to buy bankable credits if blenders can not buy enough physical ethanol to meet requirements.



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paul d smith    
glasgow, mo  |  August, 21, 2012 at 01:40 PM

The cure for high prices is high prices. Let the market place take care of high corn prices. Rationing will happen with our without our intervention on the ethanol mandate. The market place will be a better guage of what that number should be.

BobW    
Sacramento, CA  |  August, 21, 2012 at 03:21 PM

Had we a free market in fuels, the pump price of gasoline would be over $10 per gallon. As it stands now, the U.S. taxpayer foots the bill to defend the world's oil supply, as well as generous subsidies. $10+ fuel would not only ensure increased use of biofuels, and a resultant increased acreage and yield of biofuels crops, but also an economically feasible marketplace for numerous advanced biofuels and other energies to enter the market. Instead, the U.S. taxpayer is being robbed to keep gasoline at an artificially very low price.

Matthew    
TX  |  August, 21, 2012 at 08:54 PM

The distorted or lack of free market not only subsidizes the cost of fuel through taxes. We also subsidize the cost in higher food prices. But the distorted market due to government intervention and manipulation also makes some people and industries VERY rich. When trying to understand something, it is always a good idea to follow the money trail. That said, I have no problem with US defense dollars being spent to ensure the supply of oil.

Matthew    
TX  |  August, 21, 2012 at 08:55 PM

The distorted or lack of free market not only subsidizes the cost of fuel through taxes. We also subsidize the cost in higher food prices. But the distorted market due to government intervention and manipulation also makes some people and industries VERY rich. When trying to understand something, it is always a good idea to follow the money trail. That said, I have no problem with US defense dollars being spent to ensure the supply of oil.

John W    
OK  |  August, 22, 2012 at 08:54 AM

I always find it interesting when people who support the mandate and oppose a waiver say "Let the market place take care of high corn prices. Rationing will happen with or without our intervention on the ethanol mandate." I'm all for allowing the market to ration corn. However, in order for the market to properly ration corn, there cannot be some arbitrary amount of product that must be used for a specific purpose. It is an inconsistent argument to say "let the market take care of this" and defend the mandate at the same time. If ethanol was truly able to compete in the market place, there would be no need for a mandate.

Mark    
August, 22, 2012 at 09:30 AM

Nicely said John. The first two replies need to review the principles of a free market economics. As a user of corn for purposes other than ethanol all I want is an even playing field. Mandates for the use of a product make that field uneven. Maybe I should petition for a mandate that requires every person in the US to eat 1 lb of corn chips everyday! The belief that our government today has any idea how to work within a free market society is crazy. They are constantly reacting to but never foreseeing the unintended consequences of all their subsidies and mandates. To Bob, if we had free market in fuels without all the regulations and restrictions on drilling we would have $1.50 gasoline. Again the government mandates and regulations due mostly to corruption and picking sides interferes with the free markets.

j.e.hossley    
mobile,alabama  |  August, 22, 2012 at 01:38 PM

end the mandate regarding ethanol in gasoline entirely...let the maketplace determine if it makes any sense.

Steve    
August, 23, 2012 at 09:05 PM

Great comment John. How can we get others to listen, Corn farmers are top busy counting ther money.


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