Texas Gov Requests Waiver From Renewable Fuels Mandate
>>>Good-bye ethanol. Its been great to know ya. I saw this on the Nightly Business Report. I had unknowingly shorted a decent chunk of ADM around noon. ADM seems to have made a triple top, and while it did set a new 52 week high, it got turned back and the volume dried up.<<<
DOW JONES NEWSWIRES
April 25, 2008 3:23 p.m.
NEW YORK (Dow Jones)--The Texas governor's office requested Friday an exemption from a national standard that requires renewable fuels use.
Texas is the first state to try to opt-out of the federally mandated standard that encourages use of alternatives to fossil fuels.
"This misguided mandate is significantly affecting Texans' family food bill," Gov. Rick Perry said in a statement issued Friday.
Perry said he seeks a year-long waiver of 50% of the mandate. The letter did not specify how much ethanol this would represent.
Because corn-based ethanol is the most widely available renewable fuel, Perry says he fears that use of the fuel is driving up food prices. "Implementation of the mandate is unnecessarily having a negative impact on Texas' otherwise strong economy while driving up food prices," he wrote in a waiver request to Stephen Johnson, administrator of the U.S. Environmental Protection Agency.
The Renewable Fuels Standard requires companies that blend ethanol and other additives into gasoline to sell a certain volume of renewable fuels each year until 2022. Congress expanded the requirement under the Energy Independence and Security Act of 2007, legislation that aimed to reduce dependence upon fossil fuels and to boost America's reliance on domestic resources.
The revised standard requires the sale of 9 billion gallons a year by the end of this year. The standard ramps up the requirement annually until 2022, when 36 billion barrels of renewable fuels are mandated annually.
Corn-based ethanol and other biofuels derived from food products have come under scrutiny in the past year because their production strains food resources, resulting in price hikes around the world.
The ethanol lobby has countered that, while corn prices may be elevated slightly due to ethanol production, factors other than corn prices are driving global food prices higher. |
