US moves closer to decision on ethanol rollback

05 May 2008 19:39  [Source: ICIS news]

EPA must respond to requests to roll back corn-based ethanolWASHINGTON (ICIS news)--US environmental officials may reach a decision within weeks on requests made by the state of Texas and two dozen senators for a rollback of the federal ethanol mandate, administration officials said on Monday.


The Environmental Protection Agency (EPA) said it will “review and respond appropriately” to the growing number of requests for a temporary halt or reduction in the new renewable fuel standard (RFS) that was mandated by Congress late last year.


Under the Energy Independence and Security Act (EISA) passed by Congress and signed into law by President George Bush on 19 December last year, the US is to produce and consume 36bn gal/year of renewable fuels, chiefly ethanol, by 2022.


The law requires that 15bn gal of that total be corn-based ethanol, which is the only commercial source of US bio-ethanol. The statute mandated that US output of corn ethanol, which was nearly 7bn gal/year in 2007, be ramped up to 9bn gal this year.


However, Texas Governor Rick Perry formally asked EPA to cut the renewable fuels standard nationwide by half for this year and beyond, arguing that ethanol-driven demand is driving sharp price increases for corn and hurting the Texas livestock and foods industries.


The EISA law provides that the agency may grant waivers to reduce or eliminate the biofuels mandate if a state or region suffers significant harm due to the renewable fuels requirement.


In addition to Perry’s request for an ethanol rollback, Senator John McCain (Republican-Arizona), the presumed Republican candidate for president in this year’s US national elections, joined Senator Kay Bailey Hutchison (Republican-Texas) and 22 other Republican senators in a letter to EPA demanding that the agency consider cutting back the ethanol mandate.


“We are very concerned that food-to-fuel mandates and subsidies have contributed to higher domestic and global food prices,” the senators said, adding:  “It is essential for EPA to respond quickly to the consequences of these mandates.”


EPA spokesman Jonathan Shradar said that the agency is required by law to reply to Governor Perry’s request within 90 days, or by the middle of July.


However, Shradar indicated the EPA response to Perry would be more prompt than 90 days and that the agency’s response to the request by 24 senators would probably be made within a matter of weeks.


US ethanol producers and corn farmers last week challenged widespread claims that the federal ethanol mandate is driving up food and feed prices globally. They warned it would be a major setback for US alternative energy efforts and hopes for a breakthrough in non-food cellulosic biofuel technology if the new ethanol mandate is weakened.


For more on ethanol visit ICIS chemical intelligence


For some independent thinking on ethanol bookmark Simon Robinson's Big Biofuels Blog

By: Joe Kamalick
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