EPA turns down states' request for ethanol waiver

Associated Press Modified: November 16, 2012 at 4:01 pm •  Published: November 16, 2012
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WASHINGTON (AP) — The Environmental Protection Agency on Friday denied requests from several governors to waive production requirements for corn-based ethanol.

A renewable fuels law requires that 13.2 billion gallons of ethanol be produced by this year and 15 billion gallons be produced by 2015. That's good for corn farmers, but it's angered poultry, hog and cattle farmers. They say they've seen big jumps in corn-based feed costs as corn is diverted to make ethanol vehicle fuel.

States requesting the waiver say reduced corn production due to this year's drought has made the problem even worse.

Gov. Mike Beebe, D-Ark., said in a letter to the EPA in August that ethanol production was taking a "terrible toll" on animal agriculture in his state and that consumers would pay more for food as a result.

Governors of North Carolina, New Mexico, Georgia, Texas, Virginia, Maryland, Delaware, Utah, and Wyoming also asked for the waiver, along with members of Congress and a coalition of farm groups and other industries that have opposed increased ethanol production.

The EPA said Friday that the agency has studied the effects of waiving the requirement and officials believe it would have had little impact on corn prices.

"We recognize that this year's drought has created hardship in some sectors of the economy, particularly for livestock producers," said Gina McCarthy, assistant administrator of the EPA's Office of Air and Radiation. "But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the Renewable Fuel Standard will have little, if any, impact."

Under the EPA's interpretation of the renewable fuels law, first passed in 2005 and then significantly expanded in 2007, it is not easy to qualify for a waiver. The EPA can grant a waiver if the agency determines that the set ethanol production would "severely harm" the economy of a state, region or the entire country. It's not enough that the standard just contributes to the harm, the EPA said, noting the agency also has a high threshold for the degree of harm done.