EPA Will Not Relax Renewable Fuels Standard
Despite receiving several requests from states to relax the RFS -- first established by the U.S. Congress in the Energy Policy Act of 2005 -- the EPA determined that such a measure would only reduce corn prices by 1 percent and would have virtually no affect on household energy costs.
"We recognize 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. "But our extensive analysis makes clear that congressional requirements for a waiver have not been met and waiving the RFS will have little, if any, impact."
The EPA added that the evidence it reviewed failed to prove that a 2012-2013 RFS waiver would harm the economy of a given state.
The announcement affects convenience store retailers that blend or sell ethanol at the pump.
Last month, NACS, the Association for Convenience & Fuel Retailing, and the Society of Independent Gasoline Marketers of America (SIGMA) urged the EPA to reject the RFS waiver requests because granting such an action would disrupt "business decisions premised upon the statutory volume obligations for 2013."
NACS and SIGMA added that rejecting the RFS "fosters certainty and recognizes market realities."
However, both trade associations stated the EPA should consider lowering the RFS volume obligations in future years. "While we do not support a decision that would disrupt the market this year, we believe strongly that renewable fuels requirements in future years should be evaluated and the market be given as much flexibility as possible," said John Eichberger, NACS' vice president of government relations.
Providing an opposing point of view was the National Council of Chain Restaurants (NCCR), which expressed dismay with the decision.
"This year's catastrophic drought seriously reduced corn yields and has led to a situation where the RFS' unsustainable mandates force ethanol fuel to commandeer a shrunken pool of available corn for food and livestock feed," said Rob Green, executive director for the NCCR.
This is the second time the EPA rejected a RFS waiver request. It also denied Texas a waiver in 2008.