Texas labels biofuel targets "bad public policy"

The US Environmental Protection Agency's rejection of a formal request for a scaling back of national renewable fuel standards has bought mixed reactions from politicians and environmentalists.

Last week, the EPA finally rejected a request from the state of Texas, made in April, for a 50 per cent waiver of the renewable fuel standard (RFS), citing concerns over the effect of the targets on food prices

The RFS mandates that an increasing amount of fuel be ethanol-based in the coming years. It had required 5.14 billion barrels of ethanol to be produced in 2008, but the Energy Independence and Security Act passed in December raised it to nine billion.

Texas had claimed that the knock on impact of the target on corn prices was harming its economy, which relies heavily on livestock using corn for feed. However, the EPA ruled that the economic harm was not sufficient to grant a waiver.

"Good intentions and laudable goals are small compensation to the families, farmers and ranchers who are being hurt by the federal government’s efforts to trade food for fuel," responded Texas governor Rick Perry in a statement. "Any government mandate that artificially props-up a single industry to the detriment of millions of Americans is bad public policy."

Texas Department of Agriculture commissioner Todd Staples underscored Perry's criticism with numbers, pointing to a US Department of Agriculture report that highlighted the the cost of farming has risen as a result of biofuel policy. He argued that US farm production expenditures rose to a record $260bn last year – up 9.3 per cent from 2006.

Large poultry producer Pilgrim's Pride, which uses corn as feed for its chickens, said that costs would increase $900m over the last fiscal year because of inflated pricing. "Not only are the 2008 mandates destructive, but the scheduled mandate next year will again increase another 16.7 per cent from corn, consuming an additional 4.5 per cent or more of the 2009-2010 corn crop than the anticipated 34 per cent of the crop being consumed this year for ethanol production," it said.

However, not everyone condemned the news. "Our farmers are producing enough corn for our food, feed and fuel needs, and the growing ethanol industry is reducing our dependence on foreign oil," argued Ben Nelson, Senator for large corn producing state Nebraska, in a statement. "It is helping to hold down our high gas prices and it is providing home-grown economic growth in many states, including Nebraska."