Iowa Gov. Terry Branstad on August 22 sent a letter to the administrator of the U.S. Environmental Protection Agency in Washington, D.C., urging EPA to retain the Renewable Fuels Standard, which provides a base for the demand for ethanol.
Livestock and poultry groups are angered by high corn prices and are blaming ethanol because the renewable fuel now uses about 40% of the nation's corn crop. They've asked EPA to waive the mandate. In his letter Branstad says "a decision by EPA to waive the RFS would signal that U.S. renewable fuels policy is risky."
The RFS, originally passed by Congress in 2005, will require that the U.S. use up to 13 billion gallons of ethanol this year, about 10% of the nation's total gasoline consumption. Some national livestock and poultry organizations have complained that the RFS is a mandate that drives up corn prices, which have reached a record $8.42 per bushel this summer because of drought. "While the drought has presented some tough challenges for livestock producers, a waiver of the RFS is not an appropriate response," says Branstad.
Waiving renewable fuels standard would show that U.S. ethanol policy is risky
Iowa is the leading state in production of ethanol, with 41 refineries that in 2011 generated about 3.7 billion gallons of the renewable fuel and about $15 billion in revenue. In his letter Branstad addressed the food vs. fuel argument against the mandate, noting that nearly one-third of the corn used in ethanol production re-enters the market as high protein animal feed." He says distillers grains are providing more than 20% of cattle diets in feedlots where they are being fed.
The EPA said last week that it opened a 30-day public comment period on whether or not the agency should waive the Renewable Fuels Standard. The agency is required to make a decision in 90 days. The governors of Arkansas, North Carolina and Georgia as well as several Congressmen have requested that EPA waive the mandate.
The RFS calls for increasing amounts of U.S. corn crop to be used for fuel
Signing separate letters on August 14, Arkansas Gov. Mike Beebe and North Carolina Gov. Beverly Perdue petitioned the U.S. EPA to waive the RFS, which mandates production quotas. Perdue said direct harm is "caused by the RFS requirement to use ever-increasing amounts of corn and soybeans for transportation fuel." Beebe pointed a finger at the RFS for increasing feed prices. "While the drought may have triggered the price spike in corn, an underlying cause is the federal policy mandating ever-increasing amounts of corn for fuel," he said.
National Corn Growers Association president Gary Niemeyer says the waiver process provision in the RFS "calls for careful, objective analysis of the economic impact of the RFS on the U.S. economy. We have faith in, and support, the process laid out in this language that is already written in the law."