AFBF: Texas RFS waiver request should be denied

A request by the state of Texas for exemption from the Renewable Fuels Standard should be denied, the American Farm Bureau Federation told the Environmental Protection Agency this week. Ethanol benefits the economies of both the United States and Texas. Additionally, Texas doesn’t meet standards that have been established for granting a wavier, AFBF wrote in a letter to Stephen Johnson, EPA administrator.

“The RFS is part of the fuel for economic growth and any evaluation of a waiver request must consider not only the impacts of the waiver on Texas – alleged impacts that we dispute – but also the negative impacts on jobs that would be created by a waiver,” AFBF stated. AFBF also noted that ethanol contributed $46.7 billion to the nation’s gross domestic product and created 238,541 new jobs in 2007.

In addition, AFBF said that Texas doesn’t meet established standards for a waiver, which require proving severe harm to the economy of a state, region or the nation. According to the organization, the Texas request doesn’t take into consideration the substantial economic benefits of ethanol, including lower retail gasoline prices and increased opportunities for Texas agriculture producers.

AFBF also noted in its letter to EPA that although Texas officials assert the state’s livestock sector is experiencing severe harm due to increased corn prices caused by the RFS, no data linking the two is provided.

Increased corn prices are caused by numerous factors, AFBF wrote. These include record export demand fueled by a weak dollar, record domestic feed use, a flood of speculative money into the commodities markets, and dramatic price increases for crude oil and energy.

“If EPA sends a signal that the government is not fully committed to implementing the RFS – by wavering at the first hint of an increase in price regardless of whether the RFS is the cause or the severe harm standard has been satisfied – the investment markets could react and thus jeopardize the ability to meet the goals of the legislation,” according to AFBF.

“The RFS target of 36 billion gallons can only be achieved if EPA’s implementation ensures continued incentives for investment in ethanol plants – plants that may be utilizing corn ethanol now but that have the capability to produce biomass-based and cellulosic ethanol in the future.”

AFBF also urged EPA officials to consider that the RFS not only strengthens the existing first-generation biofuels industry, but is fundamental to spurring innovation for second- and third-generation biofuels, such as cellulosic ethanol, biomass-based biodiesel and other advanced biofuels.

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