Food Or Fuel? Ethanol Waiver Rejected

HARRISONBURG — Reaction to the Environmental Protection Agency’s decision Friday not to grant an ethanol waiver was swift in the central Valley, with U.S. Rep. Bob Goodlatte sharply criticizing the agency for “choosing to put more ethanol in gas tanks rather than food on the table.”

Gov. Bob McDonnell and five other governors requested the waiver earlier this year, citing the drought in the nation’s midsection and sky-high corn prices.

But the EPA said on Friday that it found no evidence of severe “economic harm” that would warrant granting a 2012-13 waiver of its production requirements for corn-based ethanol. The renewable fuels act, which was passed by Congress in 2005 and expanded two years later, requires that 13.2 billion gallons of ethanol be produced by 2012 and 15 billion gallons by 2015.

That’s good for corn farmers, but it has angered hog, cattle and poultry growers, including those in the central Valley. They say they’ve seen big jumps in corn-based feed costs as corn is diverted to make ethanol vehicle fuel.

The EPA said it based its decision on studies performed in conjunction with the U.S. departments of Agriculture and Energy.

“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 of EPA’s Office of Air and Radiation. “But our extensive analysis makes clear that congressional requirements for a waiver have not been met and that waiving the [standard] will have little, if any, impact.”

Higher Grocery Prices?

Goodlatte, who has long chided the EPA for handing down what he says are unfair and heavy-handed regulations on farmers and others whose industries often cross paths with the environment, expressed “great disappointment” at the decision.

“For many farmers and businesses in the 6th District who use corn to feed livestock or produce products, rapid increases in the price of corn weigh heavily on their bottom line,” Goodlatte said. “But it doesn’t stop there — higher corn prices are ultimately reflected in the price of food on grocery store shelves.”

Bob Threewitts, president of the Rockingham County Farm Bureau, said some dairymen could pay as much as $1,000 more a month for feed because of the standard. Compounding the problem is the high price of alternative feed, he added, because the baseline for costs is the price of corn, which has increased as more of it is used for fuel.

“In an area like us, it’s certainly more of a detriment than an asset to have that waiver disregarded,” Threewitts said.

High Threshold

Environmental groups also have opposed increased ethanol production, saying the excess corn planting is tearing up the land.

Scott Faber, a lobbyist for the Environmental Working Group, said the latest waiver denial may further energize ethanol opponents to lobby Congress to repeal the entire renewable fuels law and not “tinker with a safety valve that is too tight for either a Democratic or Republican administration to turn.”

Under the EPA’s interpretation of the renewable fuels law, it is not easy to qualify for a waiver. The EPA can grant one if the agency determines that the set ethanol production would “severely harm” the economy of a state, region or the entire country. It’s not enough that the standard just contributes to the harm, the EPA said, noting that the agency also has a high threshold for the degree of harm done.

‘Winners And Losers’

Goodlatte has endorsed a measure to do away with the renewable fuel standard, a move that would lift the production requirements and by extension reduce the demand for corn that has driven up prices.

“In the debate over ethanol,” the congressman said, “the government is picking winners and losers. Livestock and food producers as well as consumers of these products are on the losing end.”

— The Associated Press contributed to this report

Contact Preston Knight at 574-6272 or pknight@dnronline.com