With the continuing drought – the list of those seeking a Renewable Fuel Standard waiver is growing. This week the requests come from North Carolina Governor Beverly Perdue and Arkansas Governor Mike Beebe. The Renewable Fuels Association says the two requests should be combined and rejected. RFA says waiving the RFS is a solution that won’t solve the problem. The group says seeking to reduce U.S. ethanol production will not bring about the return to undervalued corn sought by meat groups and food processors. In fact – according to RFA – waiving any portion of the RFS would likely lead to higher prices at the pump, a greater dependence on imported oil and a chilling slowdown in new biofuel technology investment and development.
RFA and Growth Energy CEO Tom Buis argue the RFS contains plenty of flexibility to ensure volume goals can be met when shortages occur. Buis says the marketplace has worked – and always will work – in rationing demand for commodities that are in short supply. He notes the production of ethanol has already declined by 15-percent. He adds that corn prices have dropped 36-cents from last week. Buis says a lack of rain and record high temperatures are the reasons for rising commodity prices – not the ethanol industry. He says that’s something neither the EPA nor any other government agency is able to fix.
NCGA Continues to Take Slightly Different Stance on RFS Waiver Requests
The National Corn Growers Association believes in the value and efficacy of the open market system. NCGA President Garry Niemeyer calls it the most efficient and effective way of allocating resources. He says a lot of the current public discussion about the role and impact of the Renewable Fuel Standard is unencumbered by facts and reality. According to Niemeyer – the facts clearly show the RFS has been of significant net value to the entire U.S. economy. But while NCGA believes it is somewhat premature to consider a temporary, partial waiver to the RFS – they respect the right of those with standing to exercise the language contained in the RFS. If analysis shows the RFS is not causing severe economic harm – but ethanol production is responding to market forces – Niemeyer says the waiver request should be rejected. If the analysis clearly shows the RFS is causing severe economic harm in light of the drought – he says a waiver should be granted.
Niemeyer says NCGA believes the drought is the issue and the cause of the distress the industry is facing. The group also says the impact of this historic and devastating drought will be felt well beyond the farm sector. Niemeyer says the group has great concern and empathy for its members who are suffering and all those the nation’s corn growers supply – including the domestic livestock sector, export customers, the domestic food industry and the ethanol industry. He says all are suffering because of the drought.
Source: NAFB News Service