EPA announced on August 7 it will not relax the standard for ethanol to be added to gasoline. Texas Governor Rick Perry petitioned the EPA in late April to grant a 50% waiver on the nation's Renewable Fuel Standard (RFS), which calls for 9 billion gallons of corn-based ethanol to be added to gasoline supplies this year. This ruling rejects the general belief that ethanol production from corn is artificially raising food prices. Critics believe ethanol production has contributed to raising food prices. The EPA acknowledged that the RFS has resulted in a rise in corn feed prices, but said the mandate has only added 7 cents to each bushel.
The Energy Policy Act of 2005 RFS required 5.4 billion gallons of renewable fuel in 2008. The Energy Independence and Security Act of 2007 increased the standard to 9 billion gallons in 2008, with annual increases to 36 billion gallons required in 2022. However, Section 211(o)(7) offers a safety valve - a construct familiar to many energy and environmental statutes. The economic harms flowing from an inadequate supply of ethanol were intended to be the basis of a waiver. Because supply concerns have placed undue pressure on food prices, the case has been made for a waiver, and it would have been within EPA's clear discretion to have granted the waiver request in whole or in part. The RFS is designed to expand annual biofuel use to 36 billion gallons by 2022 with 21 billion gallons from switch grass, wood chips, municipal garbage, and other cellulosic sources.
