Thursday, August 07, 2008

EPA Denies Texas RFS 50% Waiver Request

Aug 7: U.S. EPA Administrator Stephen Johnson announced his decision in the State of Texas’ request to reduce the nationwide Renewable Fuel Standard (RFS). Johnson said following extensive analysis, the Agency decided to deny the request from Texas. As a result, the required total volume of renewable fuels, such as ethanol and biodiesel, mandated by law to be blended into the fuel supply will remain at 9 billion gallons in 2008 and 11.1 billion gallons in 2009.

Johnson said, “After reviewing the facts, it was clear this request did not meet the criteria in the law. The RFS remains an important tool in our ongoing efforts to reduce America’s greenhouse gas emissions and lessen our dependence on foreign oil, in aggressive yet practical ways.” Current law authorizes EPA to waive the national RFS if the Agency determines that the mandated biofuel volumes would cause “severe harm” to the economy or the environment. EPA said it recognizes that high commodity prices are having economic impacts, but indicated that extensive analysis of the Texas request found no compelling evidence that the RFS mandate is causing severe economic harm during the time period specified by Texas.

The Energy Policy Act of 2005 established the RFS program -- and included amendments to the Clean Air Act to set strict criteria for RFS-related waivers. RFS nationwide volume mandates were increased in the Energy Independence and Security Act, which was signed into law in December 2007. EPA said it conducted detailed analysis, consulted closely with the Departments of Energy and Agriculture, and carefully considered more than 15,000 public comments in response to the Texas request. This is the first RFS-related waiver request. In a Federal Register notice, EPA is publishing a detailed rationale that will also serve as a framework for any future waiver considerations.

In an April 25, 2008 letter to EPA, Governor Rick Perry asked EPA to grant a 50% waiver of the nationwide renewable fuels standard (RFS) mandate for the production of ethanol derived from grain, citing adverse economic impact due to higher corn prices in Texas. EPA's actions followed intensified debates over the RFS which have legislators divided on how to address the issue [See WIMS 5/12/08].

In May, EPA initiated a public comment during which it received over 15,000 comments and a number of the comments "raised substantive issues and included significant economic analysis," according to Johnson [See WIMS 7/22/08]. At that time, Johnson indicated EPA would need more time to respond to the Texas request and said, "I believe it is very important to take sufficient time to review and understand these comments in order to make an informed decision. EPA is also required to consult with the Departments of Agriculture and Energy in considering whether to grant or deny the waiver request and has begun these consultations. The process remains fair and open and no agreements have been made with any party in regard to the substance and timing of the decision on the waiver request."

Access the announcement from Administrator Johnson (
click here). Access a fact sheet on the decision (click here). Access a prepublication copy of the FR announcement (click here). Access the EPA docket for the action with comments and background information (click here). Access EPA's RFS Program website for further details and background (click here). Access an April 25 release from Governor Perry (click here). [*Energy, *Agriculture]