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Wednesday, August 20, 2008 9:34 PM CDT
IFB hails EPA administrator's RFS waiver denial
BLOOMINGTON — Illinois Farm Bureau President Philip Nelson said American consumers are the winners today after the decision by the U.S. Environmental Protection Agency to leave the nation’s Renewable Fuel Standard (RFS) alone.
EPA upheld the three-year-old standard which requires oil companies to blend nine billion gallons of environmentally friendly, corn-based ethanol into gasoline this year.
“There’s no question ethanol stretches out our nation’s fuel supply and saves consumers money at the pump which greatly benefits our economy and reduces our reliance on imported energy,” said Illinois Farm Bureau president Philip Nelson, a grain and livestock producer. “Our members worked hard to achieve a permanent place for ethanol in our national energy portfolio. We’re pleased EPA has decided to let the policy work.”
Iowa State University economists studied ethanol’s impact on gas prices over the past decade and found that ethanol saved Midwestern motorists as much as 40 cents per gallon. A Merrill Lynch economist announced that without ethanol American motorists would be paying 15 percent more for gas. At today’s average national price for gas ($3.85), that’s a savings of nearly 60 cents per gallon.
“We need more domestically produced energy today, not less. With fuel prices where they are today, granting a waiver makes absolutely no sense, and we’re glad EPA recognized this,” Nelson said.
Texas Gov. Rick Perry’s request for a 50 percent RFS waiver was the centerpiece of a campaign by poultry producers and the Grocery Manufacturers Association designed to link ethanol policy to higher food prices. But agricultural economists at Texas A&M University found that an RFS waiver would barely impact corn prices let alone food prices.
A recent national poll from Renewable Fuels Association revealed that Americans don’t buy the food industry’s anti-ethanol arguments. Of those polled, 71 percent correctly blamed record energy prices and other factors for higher prices at the grocery store. Only 8 percent pointed the finger at ethanol.
“American consumers haven’t had much to cheer about lately, but this decision from EPA should be interpreted as pro-consumer,” Nelson said.
Nelson, who raises cattle and hogs on a family farm near Seneca, said he sympathizes with fellow livestock producers who are paying more for feed. But Nelson notes that corn futures have fallen dramatically — nearly 30 percent — since July 1. Cash corn is trading now at about $4.60 per bushel.
Many analysts are predicting that next week’s August USDA crop report will point to a roughly 12 billion bushel corn crop, which would be the second biggest corn crop on record.
Despite flooding and a late start on planting, nearly three quarters of the Illinois corn crop is in good to excellent condition, prices are lower, and livestock producers will begin to see their feed costs go down, Nelson said.
“Farmers are proving how productive they can be. We look forward to meeting today’s and future demands for food, feed, and fuel,” Nelson said.
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