Ask and you shall not receive: The Environmental Protection Agency has refused a request by Texas Gov. Perry to temporarily suspend the rules that require a minimum amount of ethanol to be mixed into U.S. gasoline.
In April, the governor asked the EPA to halve this year’s ethanol requirement for the nation from 9 billion gallons to 4.5 billion. Perry said the waiver was needed because rising U.S. ethanol output is inflating corn prices, wreaking havoc on the state’s massive livestock industry and boosting grocery bills for American families. But on Thursday, EPA Administrator Stephen Johnson said Perry’s request had not proved the Renewable Fuel Standard, which sets ethanol quotas, is causing “severe economic harm,” a requirement needed to justify a waiver [Houston Chronicle].
Perry protested that the EPA’s standard for “severe economic harm” was bureaucratic nonsense. But even if the EPA cut back on ethanol requirements, it might not have much effect, as gasoline companies already are blending in more ethanol than required. They have been encouraged by new production and the recent fall in corn prices [The Wall Street Journal]. Also, many farmers and ethanol advocates say that high oil prices are the real cause of rising food costs, in which case Perry’s proposal to lower ethanol quotas would change little.
If anything, the EPA’s ruling might simply be a symbolic one—that the U.S. won’t back off biofuel incentives despite rising global pressure to do so. The decision is an indication that Washington is unwilling to retreat from a policy that is very popular among grain farmers, if not among ranchers [The New York Times].