The Environmental Protection Agency announced today that it would not grant a waiver of the renewable fuels standard as requested by Texas Governor Rick Perry. The Governor's request was for the mandated levels of grain ethanol production to be reduced by 50 percent. His reasons for requesting this waiver can be read in his letter to the EPA, but it essentially came down to high corn prices, caused in part by the use of corn for ethanol production, are dramatically raising the costs to feed livestock and families. The EPA rejected the waiver request because it did not find compelling evidence that the renewable fuel standard mandate has caused sever economic harm.
Perry's response to the EPA's announcement was simple, he says it is "bad public policy." He further said that he is "greatly disappointed with the EPA's inability to look past the good intentions of this policy to see the significant harm it is doing to farmers, ranchers and American households... For the EPA to assert that this federal mandate is not affecting food prices not only goes against common sense, but every American's grocery bill."
The EPA decision is a victory for Senator Grassley and the highly subsidized ethanol industry. Grassley showed his pleasure with the decision by saying it is a "blow to those who have used ethanol as a scapegoat for rising fuel and food prices." The questions consumers are waiting to have answered is whether additional ethanol production will increase food prices further and whether increased ethanol production will decrease fuel prices and our dependence on foreign oil. Consumer patience is beginning to run thin, so Grassley and other politicians forcing ethanol on the country better hope that their claims are correct or they have guaranteed the end of the political careers.
Originally posted 08/07/2008 on Grassley Watch