RFS waiver battle wages on, official notice publication expected

By Holly Jessen | August 29, 2012

Letters outlining support for the renewable fuel standard (RFS) as well as those asking for a waiver are continuing to fly fast and furious.

The number of governors to send in official RFS waiver petitions reached six with the recent addition of Virginia’s Gov. Bob McDonnell. The remaining five are: Gov. Beverly Perdue, North Carolina; Gov. Rick Perry, Texas, Gov. Nathan Deal, Georgia; Gov. Susana Martinez, New Mexico; and Gov. Mike Beebe, Arkansas. The governors from Maryland and Delaware have also sent the U.S. EPA letters supporting a waiver, but not official petitions. On the other hand, Gov. Terry Branstad of Iowa has sent the EPA a letter of support for the RFS.

In the meantime, publication of the official notice of RFS waiver requests is expected Aug. 30, after it was “inadvertently omitted” from publication in the Federal Register Aug. 26. The deadline to submit written comments is Sept. 26, according to a prepublication document.

Just before Virginia’s governor petitioned the EPA for an RFS waiver, Growth Energy contacted the other five governors, outlining why it is not necessary. The letter explains that obligated parties will be able to meet volume requirements this year and a waiver would not have any significant impact on corn prices. In addition, Growth Energy said, it is misinformation that 40 percent of the corn crop goes to ethanol due to the fact that only the starch is removed and ethanol’s coproduct, distillers grains, goes back into the market as animal feed.

The Renewable Fuels Association also addressed the RFS waiver requests, calling it a “misguided attempt” to derail the RFS. “The alleged economic harm cited by these governors does not rise to the kind of economic harm EPA determined necessary to waive the RFS,” said President and CEO Bob Dinneen. “The facts cited in support of their case also fail to pass muster.”

In a blog posted Aug. 28, Geoff Cooper, vice president of research and analysis, pointed out that a wavier would only reduce household spending on food by $3 to $9 a year, while household spending on gasoline would go up by $33 to $88.

“While this summer’s drought has undoubtedly caused billions of dollars in damages to the entire U.S. agriculture sector, the impact of the RFS on the average American household’s budget has been mischaracterized by waiver proponents,” Cooper wrote. “The increase in household gasoline expenditures that would result from an RFS waiver would far outweigh the nearly imperceptible reduction in food prices. Thus, waiving the RFS in 2013 would do more harm to American consumers than if EPA allows the program to continue to function as designed.”