Texas Governor Perry offers support for ethanol mandate waiver

Sat Aug 25, 2012 1:59am IST

Related Topics

* Mandate doing more harm than good-Perry

* Perry unsuccessfully pushed for waiver in 2008

* Supplies tighter this year than 2008-Perry

By Ayesha Rascoe

WASHINGTON, Aug 24 (Reuters) - Texas Governor Rick Perry on Friday threw his support behind calls to suspend the U.S. government's mandate forcing oil refineries to blend corn-based ethanol into gasoline.

The Renewable Fuel Standard, which would require about 13.2 billion gallons of ethanol to be mixed with gasoline this year, is doing more harm than good, Perry said.

"Good intentions and laudable goals are small compensation to the families, farmers and ranchers who are being hurt by the federal government's efforts to trade food for fuel," Perry said in a letter to the Environmental Protection Agency.

Texas is the seventh state to urge EPA to suspend the mandate as the worst drought in half a century ravages crops and pushes up feed prices. Not all of the states, including Texas, have formally petitioned the agency.

Perry led an unsuccessful push for a waiver of the mandate in 2008 when commodity prices spiked. At that time, the EPA said Texas had not demonstrated the mandate itself was causing severe economic harm.

Proponents for easing the mandate, aimed at reducing U.S. reliance on foreign oil, say such a move is justified by tight corn supplies this year.

The conditions this year are significantly different from 2008 when he asked for waiver, Perry argued.

Corn production could be substantially less than four years ago, while requirements for corn-based ethanol production have climbed sharply, he said.

Ethanol is strongly supported by the renewable-fuels lobby and by lawmakers and farmers in the U.S. corn belt. Supporters argue that easing the mandate will not have much impact on food prices.

Ethanol industry groups say the mandate offers some flexibility for fuel blenders responsible for complying with the mandate, including the ability to buy bankable credits if blenders can not buy enough physical ethanol to meet requirements.

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