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Thousands comment on possible mandate waiver
By STEVE BINDER
Illinois Correspondent

WASHINGTON, D.C. — Officials with the U.S. Environmental Protection Agency (EPA) will sift through thousands of comments regarding the pending petition for a full one-year waiver of the Renewable Fuels Standard (RFS) – comments citing studies with significant contradictions.

On one side, parties favoring the waiver, such as the National Chicken Council (NCC), cited an August 2012 study by three Purdue University economists and the model they used to show how a waiver would impact corn and ethanol markets. Its main conclusion is that corn would drop by about $2 a bushel and provide livestock producers relief from high feed prices.

“Our comments prove in detail that the RFS is causing severe economic harm to the U.S. economy, and the 2013 requirement must be waived in full,” said Mike Brown, NCC president.
The USDA last week revised its estimate of the nation’s corn crop size for this year, predicting growers will harvest about 10.71 billion bushels, the lowest total since 1996. About 40 percent of that total, based on the federal fuel mandate, would be used to produce ethanol.

On the other side, biofuel producers and national grain groups oppose any waiver to the RFS, pointing to their own studies that corn prices would not be significantly affected by a one-year waiver.
Citing a study by the Food and Agricultural Policy Research Institute (FAPRI), the Renewable Fuels Assoc. (RFA) claimed an RFS waiver might reduce corn prices by about 4 cents a bushel for the 2012-13 marketing year, and possibly by 11 cents for the 2013-14 year. The RFA also claimed the study showed a full waiver would free a small amount of additional corn for feed, about 25 million bushels.

“The new FAPRI study is just the latest in a series of recent reports that show waiving the RFS would not have the types of impacts claimed by the livestock groups and grocery manufacturers,” said Bob Dinneen, RFA president. “The suggestion that an RFS waiver would significantly bring down feed prices and reduce retail meat prices is absolutely absurd.

“The only real impacts of a waiver would be to discourage farmers from planting corn next spring and to interrupt and delay important investments in new feedstocks and advanced biofuels technologies.”

The flurry of comments – the NCC submitted more than 10,000 individual comments and the National Turkey Federation submitted more than 1,500 – beat the comment period deadline on Oct. 11. More than 15,000 were filed back in 2008 when the only other RFS waiver request was filed, a request the EPA denied.

No decision is expected before the Nov. 6 elections; the EPA has until late November to issue its decision, said Christina Martin, RFA executive vice president.

Dinneen said the requirements needed for the EPA to grant a waiver have not been met. He said a petitioner must show there is severe harm to the economy of a state, a region or the country; that the harm is being directly caused by the RFS; and that waiving the RFS would cure the claimed harm.

He noted as corn prices rose this year, ethanol production slowed in response, and there is surplus supply for the industry to meet its RFS requirement into next year. “(Petitioners) blatantly ignore the fact that the ethanol industry is responding rationally to current grain market conditions by significantly reducing production,” Dinneen said.
10/18/2012