Ethanol Group Challenges Texas Request

Cindy Zimmerman

The governor of Texas is asking the federal government to cut “skyrocketing” food prices by waiving half of the renewable fuel standard for ethanol made from grain.

Governor Rick Perry said in a statement that such a waiver was “the best, quickest way” to ease rising food costs before lasting damage was done.

RFAThe Renewable Fuels Association criticized the governor’s action, saying that reducing the use of ethanol will not appreciably reduce grain prices for livestock producers and food processors in Texas.

“But eliminating 4.5 billion gallons of fuel from the marketplace – as the 50% waiver of the Renewable Fuels Standard sought by Governor Perry would do – will increase gasoline and diesel prices even more. While this may benefit Texas oil companies, it will certainly hurt consumers in Texas and the rest of the country.”

RFA says that Governor Perry is ignoring the conclusions of a Texas A&M report he himself requested. According to the findings of that study, “relaxing the RFS does not result in significantly lower corn prices.” The Texas A&M report also stated that, “The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil.”

According to RFA President Bob Dinneen, “Tampering, adjusting or removing the requirements will not have the impact on grain prices that Governor Perry seeks, nor will it bring the food price reductions he claims. The skyrocketing price of oil, surging global demand for grains and meat, poor harvests around the globe, and a weakened US dollar are the real factors determining world grain and food prices.”

Ethanol, Food prices, News