The Environmental Protection Agency (EPA) last week denied the petition filed by the State of Texas to reduce the Renewable Fuels Standard for ethanol. While some were dismayed at EPA’s logic in stating that the threshold hadn’t been reached from an economic harm standpoint, their rejection of the petition wasn’t entirely unexpected.
It does make one wonder just how many billions of dollars would have had to be taken out of the pocket of American cattle producers for it be considered significant economic harm, however.
The National Cattlemen’s Beef Association and others expressed disappointment over the decision. But with fuel prices hitting the pocket books of American consumers hard, the political climate certainly isn't ripe for a reduction of biofuels.
Next year, the mandate will rise from 9 billion to 11.1 billion gals. Despite projections for the second-largest corn harvest ever, prices are still 2.5-3 times their historical average.
Admittedly, industry advocates may have been disappointed in EPA's refusal, but the request and the resulting refusal did spawn a whole new wave of editorials (including publications like the Wall Street Journal), where the market-distorting tariffs, mandates and subsidies are coming under increasing scrutiny.
As one pundit said, “It isn't a matter of ‘if,’ but ‘when’ the marketplace will be allowed to work again.”