Ethanol gas standard likely to stay

It’s unlikely a waiver will be granted to the federal requirement governing the amount of ethanol used in gasoline despite calls for a reduction because of the drought, analysts and industry experts contend.

The requirement in the past has eaten up 40 percent of the nation’s corn crop.

This year the so-called Renewable Fuels Standard requires that 13.2 billion gallons of ethanol be used in gasoline. Livestock producers have called upon the U.S. Environmental Protection Agency to waive the standard. Amid the drought, they contend the standard has contributed to higher corn prices and has them worried about not being able to access enough corn to feed their animals.

“I think it’s going to be hard to demonstrate the type of economic emergency required” to waive the standard, said Darrel Good, a professor of agricultural and consumer economics at the University of Illinois.

He noted in 2008 when corn prices also soared, the government rejected calls to waive the standard.

“We don’t believe a waiver will be granted,” said Matt Hartwig, a spokesman for the Renewable Fuels Association, which is opposed to a waiver being granted. “The RFA has a great deal of flexibility built into it and allows oil refiners to meet the requirements in a variety of ways that don’t all involve blending physical gallons of ethanol.”

If a waiver is granted, it would have “minimal impact,” on ethanol producers, Good said.