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State's ethanol request denied by EPA
EPA denies request from Virginia, other states

 Virginia Gov. Bob McDonnell had asked the EPA to waive its standards.
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Date published: 11/17/2012

By Chelyen Davis

The Environmental Protection Agency has rejected requests from several governors--including Virginia's--to waive fuel standards that require more corn to go toward making ethanol.

The renewable fuels law will require production of 15 billion gallons of ethanol by 2015, up from 13.2 billion gallons this year.

That will require an increasing amount of corn, which is used in making ethanol. That's great for corn producers, who are seeing their crops' prices go up, but bad for other farmers--like poultry and swine farmers--who are watching feed prices go up as well.

Virginia Gov. Bob McDonnell and the governors of several other states, as well as Virginia's U.S. senators and other states' lawmakers, had asked the EPA to waive the standards for the next couple of years, in part because a drought has limited the availability of corn, causing prices to go up even more.

In a press release Friday, the EPA said it "has not found evidence to support a finding of severe 'economic harm' that would warrant granting a waiver."

The EPA said it had conducted several economic analyses, which showed that on average, waiving the fuel standards mandate would cut corn costs by just 1 percent, and wouldn't impact household energy costs.

"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 the EPA's Office of Air and Radiation, in the release. "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."

McDonnell had joined others in requesting a waiver around the end of August. At the time, state Secretary of Agriculture Todd Haymore said that the drought was the worst in 25 years, and was expected to reduce corn and soybean crops by 10 to 13 percent.

Haymore also said then that the price of corn had doubled to $8 a bushel during the two prior months, while the price of soybeans had gone up 35 percent.

Reductions in the availability of those crops would be taken out of the amount available for feed, as a percentage was already dedicated to ethanol, Haymore said.

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