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October 1, 2012

RFS Waiver No Guarantee of Relief

For more information on Newsline, contact: Kari Barbic, Media Specialist, American Farm Bureau Federation, karib@fb.org.

Yes, there’s a drought, but the nation’s largest agricultural organization says that’s not a reason to put the nation’s Renewable Fuels Standard on hold. American Farm Bureau Federation Energy Specialist Andrew Walmsley explains why in this story from AFBF’s Johnna Miller.
Miller:Some are calling for the Environmental Protection Agency to waive the nation’s Renewable Fuels Standard, which requires that transportation fuel have a certain amount of renewable fuels blended into gasoline. They claim it’s necessary due to the drought which has caused feed prices to skyrocket.
Walmsley:We’re somewhat concerned about potential knee jerk reaction that has long-term implications for a policy that has had a lot of rural development, that has decreased our dependence on foreign oil. Obviously the drought has had a major impact on all sectors of agriculture across the country. However waiving the RFS won’t necessarily have the relief that some folks imagine it will. 
Miller:American Farm Bureau Energy Specialist Andrew Walmsley says one reason that a waiver wouldn’t make a big difference is the size of this year’s corn crop. 
Walmsley:We’re still not done with harvesting and don’t have final numbers yet, but I I think some of the unease over the drought this year is that we were expected to have the largest corn crop ever. The early crop forecast was great, largest crop ever and then we had the drought which obviously cut that but we’re still looking at one of our top 10 record corn crops ever produced.
Miller:Walmsley also points out that, because ethanol is cheaper than gasoline, mixing it into gas for cleaner air benefits also brings down the price at the pump for consumers. And a waiver would have a negative impact on the progress in the renewable fuels industry.
Walmsley:Corn ethanol is merely a component of the overall standard. It has created good jobs. It’s here today. It’s strengthened agriculture. It’s going to be around, but it’s also an important stepping stone to the next generation of biofuels, things made from food waste, woody debris, leftover biomass or dedicated energy crops. It really opens up a new toolbox for farmers across the country. All over the country you have these new opportunities to produce this next generation of biofuels that have all the great things that come with it: job growth, energy security, rural development.
Miller:Johnna Miller, Washington.
Miller:We have two extra actualities with AFBF Energy Specialist Andrew Walmsley. In the first extra actuality he talks about why he does not think the requests for a waiver should be granted. The cut runs 18 seconds, in 3-2-1.
Walmsley:When you look at the Clean Air Act there’s some pretty clear language that implementation of the RFS itself must cause either environmental or economic harm to a state, region or the United States as a whole. It could be argued that the ongoing drought that has affected this country is causing the economic harm, not implementation of the RFS. 
Miller:In the second extra actuality Walmsley talks about how the RFS helps consumers at the pump. The cut runs 15 seconds, in 3-2-1.
Walmsley:There’s a variety of studies out there that show that ethanol does reduce gasoline prices whether it’s by decreasing demand for oil, that ethanol is cheaper than gasoline and we blend that in and there’s a wide range of numbers anyone can point out on how that reduces prices to the consumer. So the impact is huge.
Miller:Newsline is updated Mondays and Thursdays by 5pm Eastern time. Thank you for listening.

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