By TENNILLE TRACY
WASHINGTON -- The Environmental Protection Agency on
Friday said it is moving forward with a mandate for corn
ethanol in gasoline, denying requests to waive the requirement
following a drought that pushed up corn prices.
EPA said Friday it hadn't found any evidence that its renewable
fuel standard is causing economic harm. The agency said
suspending the standard would reduce corn prices by only
"We recognize that this year's drought has created hardship
in some sectors of the economy, particularly for livestock
producers," Gina McCarthy, EPA's air chief, said in a
statement. "But our extensive analysis makes clear that
congressional requirements for a waiver have not been met and
that waiving the RFS will have little, if any, impact."
Cattle ranchers and dairy farmers, who use corn to feed
cattle, have complained for several months that the ethanol mandate was driving up
demand for dwindling supplies of corn.
"We are extremely frustrated and discouraged that EPA chose
to ignore the clear economic argument from tens of thousands of
family farmers and livestock and poultry producers," a
coalition of agriculture groups said Friday.
Due to drought conditions in the Midwest, the Agriculture
Department predicts this year's corn crop will be the smallest
in six years.
In August, the governors of Arkansas and North Carolina
formally asked the EPA to waive the standard, triggering a
90-day review by the agency.
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.
Ethanol producers applauded EPA's decision to keep the
ethanol mandate in place. "A waiver would have likely had
little to no impact on commodities prices," said Jeff Lautt,
chief executive for Poet, one of the world's largest ethanol
This is the second time EPA has denied a waiver request for
the renewable fuels standard. The agency denied a petition from
Texas in 2008.
The American Petroleum Institute, which represents the oil
industry, said the EPA "applied an improper and unnecessary
high bar" when determining whether the standard should be
The livestock industry says ethanol producers exacerbate
problems caused by the drought by consuming 40% of the nation's
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 that ethanol companies are
already producing less this year and that ethanol has a relatively small
impact on corn prices.
Dow Jones Newswires