WASHINGTON

The U.S. Environmental Protection Agency (EPA) announced on Friday that the agency has not found evidence to support a finding of severe "economic harm" that would warrant granting a waiver of the Renewable Fuels Standard (RFS). The decision is based on economic analyses and modeling done in conjunction with the U.S. Department of Agriculture (USDA) and U.S. Department of Energy (DOE). The EPA Friday denied the request by U.S. ranchers to waive the current Renewable Fuels Standard (RFS). The request for a waiver was made in light of corn shortages and soaring feed costs across the country.

"We recognize that this year's drought has created hardship in some sectors of the economy, particularly for livestock producers," said Gina McCarthy, assistant administrator for EPA's Office of Air and Radiation. "But our extensive analysis makes clear that Congressional requirements for a waiver have not been met and that waiving the RFS will have little, if any, impact."

To support the waiver decision, EPA conducted several economic analyses. Economic analyses of impacts in the agricultural sector, conducted with USDA, showed that on average waiving the mandate would only reduce corn prices by approximately one percent. Economic analyses of impacts in the energy sector, conducted with DOE, showed that waiving the mandate would not impact household energy costs.

EPA found that the evidence and information failed to support a determination that implementation of the RFS mandate during the 2012-2013 time period would severely harm the economy of a State, a region, or the United States, the standard established by Congress in the Energy Policy Act of 2005 (EPAct).

EPAct required EPA to implement a renewable fuels standard to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. A waiver of the mandate requires EPA, working with USDA and DOE, to make a finding of "severe economic harm" from the RFS mandate itself.

This is the second time that EPA has considered an RFS waiver request. In both cases, analysis concluded that that the mandate did not impose severe harm. In 2008, the state of Texas was denied a waiver.

Ranchers argue it will push them out of business

"It's truly unbelievable that a government agency would ignore the fact that we are facing a dire corn shortage in this country," said Joe Parker Jr., rancher and TSCRA president. "By continuing to mandate that 40 percent of the very small U.S. corn crop go directly toward ethanol production, the government is escalating an already dire situation by bolstering an artificial market that will further push some ranching families out of business."

Parker says that as long as corn supplies continue to tighten across the U.S., the current RFS standard will only compound the situation by reducing the already extremely limited amount of corn available for feed. This situation is particularly severe in Texas, the leading cattle producing state in the nation.

"The EPA had an opportunity to show their support, in some regard, of the U.S. cattle industry," said Parker. "Instead, they continue to put our food and fuel in competition with one another by giving one commodity a leg-up at the expense of another. Chalk this up to another instance in a long line of examples that demonstrates that the government, particularly the EPA, does not support the cattle industry or the free market."

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