RENEWABLE FUELS STANDARD WAIVER WILL HAVE HUGE EFFECTS

If you are a follower of current events, you have no doubt seen that five state governors, at the prompting of the U.S. livestock industry, have asked for a waiver to the Renewable Fuels Standard (RFS).

In layman’s terms, the livestock industry, and subsequently the governors of Arkansas, Delaware, Georgia, Maryland, and North Carolina, has asked the EPA to consider lifting the requirement that Americans use increasing amounts of biofuels in the place of petroleum.  They did this because producing biofuels to fulfill the requirements set forth in the RFS takes corn, and the livestock industry is competing with the ethanol industry for corn which is in shorter supply than usual because of the drought.

Last week, the EPA said that they would delay the decision on the waiver until mid-November, after the elections.

The waiver request and granting of the waiver is an issue that IL Corn has our eye on, although we don’t really have a position.  We don’t want the waiver to be granted because we end up losing potential market share if the ethanol industry is throttled back, but we also want the RFS policy to work and if there ever is a year when corn is in short supply, 2012 is it.  We are relying on the EPA to make the best decision for the American public and the agricultural industry, but will be affected no matter which direction this falls.

According to Larry Elworth, chief agriculture counselor to EPA Administrator Lisa Jackson, no matter which way EPA goes in the fuel waiver debate, Elworth said, “We will be litigated.”  Obviously, the decision heavily affects everyone.

Stay tuned for the answer to this question shortly after we find out who will serve us as President for the next four years.  And if you have a significant interest in this issue, consider submitting comments to the EPA regarding your position.  Comments are due by October 11.

Dave Loos
ICGA/ICMB Ethanol Guru

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