EPA denies Texas biofuels waiver request

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The U.S. Environmental Protection Agency on Thursday, Aug. 7, denied a request submitted by the State of Texas to reduce the nationwide Renewable Fuels Standard. As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009.

“After reviewing the facts, it was clear this request did not meet the criteria in the law,” EPA Administrator Stephen Johnson said. “The RFS remains an important tool in our ongoing efforts to reduce America’s greenhouse gas emissions and lessen our dependence on foreign oil, in aggressive yet practical ways.”

Current law authorizes EPA to waive the national RFS if the agency determines that the mandated biofuel volumes would cause “severe harm” to the economy or the environment. The agency recognizes that high commodity prices are having economic impacts, but EPA said its analysis of Texas’ request found no compelling evidence that the RFS mandate is causing severe economic harm during the time period specified by Texas.

Texas Gov. Rick Perry expressed his disappointment in EPA’s decision. “I am greatly disappointed with the EPA’s inability to look past the good intentions of this policy to see the significant harm it is doing to farmers, ranchers and American households,” the Republican governor said. “For the EPA to assert that this federal mandate is not affecting food prices not only goes against common sense, but every American’s grocery bill.”

The Energy Policy Act of 2005 established the RFS program – and included amendments to the Clean Air Act to set criteria for RFS-related waivers. RFS nationwide volume mandates were increased in the Energy Independence and Security Act, which was signed into law in December 2007. EPA said it conducted detailed analysis, consulted with the Departments of Energy and Agriculture, and considered more than 15,000 public comments in response to the Texas request.

The National Biodiesel Board applauded EPA’s decision. “We appreciate the EPA taking a careful approach to the waiver request and agree with their determination that it should be denied,” said Joe Jobe, NBB chief executive officer. “It is important to note that all renewable fuels qualify for the current RFS. In fact, if the RFS is waived or cut in half in 2008, then the growth of all biofuels, including advanced biofuels such as biodiesel, would be severely hindered.”

Perry said EPA’s decision will increase the already-heavy financial burden on families while doing even more harm to the livestock industry. “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,” he said. “Any government mandate that artificially props up a single industry to the detriment of millions of Americans is bad public policy.”

Jobe said that beyond the environmental and energy security benefits provided by biofuels, the opportunity for green jobs and the continued economic development of biodiesel refineries in Texas were important considerations for EPA. “Now, the State’s goal of bringing biofuels, jobs and energy independence to Texas and the nation can continue on a path to success,” he said.

The Texas waiver request was the first related to RFS. EPA said it is publishing its rationale in a Federal Register notice that will also serve as a framework for any future waiver considerations.

“Congress specifically created an emergency waiver provision for situations like these, and EPA refuses to implement it,” Perry said.