As you know by now, the governors of Arkansas and North Carolina have officially petitioned EPA for a waiver of the RFS for the remainder of 2012 and all of 2013.  Based on guidance from EPA, the clock on the 30-day public comment period and the 90-day window in which EPA will have to make a decision will begin once the agency publishes a notice it has received the request.  (Note:  the 2008 waiver request from Texas Governor Rick Perry took 104 days total, 73 business days.)

We note the letters from AR and NC are different than the letters of support sent by the governors of Maryland and Delaware for the livestock groups urging of EPA to act.  We do not think any of those actions by livestock groups or the governors constituted an official waiver request.  The letters from Governors  Mike Beebe and Beverly Perdue are official requests.

The RFA responded to both letters.  Our responses are online at www.EthanolRFA.org.

In short, we do not believe that the circumstances outlined by Governors Beebe and Perdue rise to the level of severe economic harm laid out in the EPA rejection of the 2008 Perry waiver request.  Specifically, EPA set forth these criteria:

•             EPA would have to determine that the implementation of the mandate itself would severely harm the economy; it is not enough to determine that implementation of RFS would contribute to such harm;

•             EPA would also have to find that there is a generally high degree of confidence that the RFS is severely harming the economy; and

•             This requirement calls for a high threshold for the nature and degree of harm that would support the issuance of a waiver based on "severe harm" to the economy of a State, region, or the United States.

The full EPA decision is available here:  http://www.epa.gov/otaq/renewablefuels/420f08029.htm#basis.

As the RFA has repeatedly pointed out, a great deal of flexibility is built into the RFS.  Currently more than 2.5 billion RFS credits exist that can be used instead of physical gallons of ethanol by oil refiners to meet their RFS obligations.  Additionally, some 800 million gallons of ethanol is in storage that could be used.  Additional flexibilities also exist that make waiving the RFS an ineffective solution to the drought angst being felt.

EPA will take a holistic view of the economic conditions caused by the RFS.  The will look at corn and feed prices, but they will also look at oil and gasoline prices paid by every American and small business.  Given that domestic ethanol production and use is helping lower gasoline prices by $0.29 over the last decade and $1.09 last year alone, it is clear that waiving the RFS would result in more harm than is being alleged by these governors.

For an in-depth look at the issue, I encourage you to replay the webinar RFA hosted yesterday.  You can find those materials here: http://bit.ly/NmoyeX. 

As always, please don't hesitate to ask if you have additional questions.