Texas governor call for ethanol waiver more closely tied to payback for $100,000 political donation

In Texas, it was previously reported in Biofuels Digest that a $100,000 donation by Pilgrim’s Pride co-founder Bo Pilgrim to the Republican National Governors Conference, chaired by Governor Rick Perry of Texas, was closely followed by Governor Perry’s request for an ethanol waiver.

An in-depth article in the Houston Chronicle said that Governor Perry proceeded with the waiver request after Texas A&M researchers had presented a report concluding that a waiver would not relieve pressure on corn prices. The article added  that Governor Perry wrote to 22 other Republican governors asking them to join him in calling for a waiver, but received no support. The Chronicle said that Bo Pilgrim met with Governor Perry on March 25 for the first time regarding the ethanol waiver, made the $100,000 donation on March 31st, and Governor Perry called for the waiver on April 25th.The original report of the donation was made by the Dallas News.

RFS background

In Washington, the EPA received a total of 15,000 comments on the proposed waiver of the Renewable Fuel Standard. The agency said that, following the waiver request by Governor Rick Perry of Texas, said that many of the responses came from a website set up by the Grocery Manufacturers Association. Governor Perry said that he was not aware that any issue had ever prompted so many responses in an EPA comments period.

Meanwhile, Sen. Pete Domenici of New Mexico, predicted that the request would be denied because Governor Perry had overstated the impact of ethanol on food prices.

The EPA comments period in the Renewable Fuel Standard waiver consideration process ended last month. Just before the end of the comments period, the Balanced Food and Fuel coalition (American Meat Institute, National Chicken Council, National Cattlemen’s Beef Association, National Meat Association, National Milk Producers Federation, National Pork Producers Council, National Turkey Federation and United Egg Producers) submitted a paper commissioned from FarmEcon, and Kraft Foods submitted a paper it commissioned from Keith Collins (former chief economist of the USDA), supporting the call for the waiver by highlighting a high impact on corn prices and negligible impact on fuel prices from corn ethanol. The foodbeforefuel.org website funded by the Grocery Manufacturers Association has a link to both studies and is promoting them via press releases.

The Midwest Governors Association announced that they have written Environmental Protection Agency Administrator Stephen Johnson requesting that the EPA continue the Renewable Fuel Standard in its existing form and decline to issue waivers of ethanol blending requirements. The governors of Texas and Connecticut have issued requests for waivers in recent weeks. The EPA is responding to those requests by July.

In Washington, US Agriculture Secretary Ed Schafer kicked off a response to recent attacks on biofuels, saying that fuel diversity is central to US security and added “The change in the Renewable Fuels Standard, the change in the (ethanol) tariff or duty, isn’t going to effect food prices. We need to focus on things that will actually have an effect, instead of a short-term political solution we need to look long-term, because we have a long-term problem here.

Also in Washington, the EPA is accepting comments in June on the requests by the Governor of Texas to waive the Renewable Fuel Standard. More information on the request and how to comment is here. The EPA is required to respond by July 25, according to the 2007 Energy Independence and Security Act.

Texas Governor Rick Perry requested a 50 per cent waiver from the federal renewable fuel standard as a response to rapidly rising food prices. “We appreciate the good intentions behind the push for renewable fuels,” Perry said in a statement. “In fact, we’re diversifying our state’s energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans’ family food bill. There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of RFS levels is the best, quickest way to reduce those costs before permanent damage is done.”

“Ultimately, food prices are reaching high levels, so we’re looking at this as an option for reducing that burden,” said Allison Castle, a spokeswoman for Gov. Perry, told cattlenetwork.com. State have sought temporary waivers from EPA mandates in the past, but this is one of the first permanent waivers, and may cause ethanol quotas for other states to increase.

The Renewable Fuel Standard, and state biofuels mandates, have come under increasing scrutiny since the passage of the Energy Security and Independence Act over food price concerns.

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