Texas petitions EPA to relax ethanol standards - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

Texas petitions EPA to relax ethanol standards

Amarillo, TX - The ongoing historic drought decimated crops across the nation, and now Texas corn growers are asking the federal government to ease up on current ethanol production requirements to offset the cost of doing business.

In 2005, the Environmental Protection Agency instituted the Renewable Fuel Standard Program, which set a minimum on the amount of alternative fuels to be blended with traditional gasoline.

The minimum for corn-based ethanol has steadily increased over the years to the current requirement that 13.8 billion gallons be introduced to the fuel supply over the next ten years.

However, because of substantially lower corn yields, U.S. ethanol production is projected to fall by 10 percent in the coming year, according to both the University of Missouri and the Food and Agricultural Policy Research Institute.

Lower yields have led to record-high corn prices, which affects industries ranging from livestock production to cosmetics, pharmaceuticals, and of course, fuel.

Wesley Spurlock, a Stratford corn producer and a board member of the National Corn Growers Association, broke down the distribution, saying, "Thirty-four percent of the corn that's being produced in the U.S. right now goes to livestock; about thirty-eight, thirty-nine percent goes to ethanol.  But of the thirty-nine percent that is going to ethanol production, a third of that is going back to livestock as a distiller's grain as a high-value feed product."

Earlier this week, Governor Rick Perry joined the governors of seven other states in petitioning the EPA to relax the current minimum on grounds it creates undue financial hardship for farmers, ranchers, and livestock producers.

Texas Agrilife Risk Management Specialist DeDe Jones summed up the situation, saying, "Corn prices are at all-time record highs, so his (Perry's) argument is that if we reduce the Renewable Fuel Standards or waive them for one year, then that should drop feed prices and it should be better for the nation's cattle producers.  There's been two studies on that - one out of the University of Iowa and the other out of Purdue, and they're saying that relaxing those for this year is going to have a minimal effect on corn prices."

After a thirty-day waiting period, the EPA is scheduled to make a decision by late November.

Experts say that corn prices are only one factor in gasoline prices, so any effect on the price of gas would be negligible.

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