By TENNILLE TRACY and RYAN TRACY
WASHINGTON -- The Obama administration on Monday gave the
first official signal that it is reviewing a federal mandate
requiring energy companies to blend ethanol into gasoline after state
governors questioned the wisdom of using corn for fuel in the
midst of a drought.
The Environmental Protection Agency said
it received formal requests from the governors of Arkansas and
North Carolina to ease the renewable-fuel standard, triggering
a 90-day review that could lead to the agencys first-ever
decision to reduce or waive the mandate.
The EPAs announcement had been expected after the
governors requests were made public last week.
The EPA is requiring refiners this year to blend 13 billion
gallons of corn-based ethanol into the nation's gasoline
supply under a mandate adopted by Congress in 2005 to reduce US
dependence on foreign oil.
The requirement is expected to jump to nearly 14 billion
gallons in 2013.
Cattle ranchers and poultry producers have also requested
that the EPA considering lowering the ethanol mandate, citing
higher prices for animal feed made from corn.
The livestock industry says ethanol producers exacerbate
that problem by consuming 40% of the nation's corn crop.
The ethanol industry says that number is actually less than
26% after accounting for the high-protein ethanol byproducts
used for animal feed. It says ethanol companies are having a
relatively small impact on corn prices.
Ethanol producers are confident the
Obama administration will keep the renewable-fuel standard in
The last time the EPA was asked to waive the mandate, in
2008, the agency rejected the request and said states have to
prove severe harm.
Dow Jones Newswires