WASHINGTON – The Environmental Protection Agency on Friday denied a request by Gov. Mike Beebe to waive corn-based ethanol quotas.
Beebe requested the waiver in August, saying that severe drought conditions were raising feed costs and taking a "terrible toll" on Arkansas’ poultry industry.
"Ethanol policies have created significantly higher corn prices, tighter supplies, and increased volatility," he wrote. "By granting a full or partial waiver for renewable fuel in 2012 and 2013, EPA can help level the playing field during this crisis."
EPA Assistant Administrator Gina McCarthy on Friday recognized the hardship that the drought created but said denying the waiver would have had "little, if any, impact."
Waiving the mandate would reduce corn prices by about 1 percent, she said.
"We’re disappointed, because we wanted to find more ways to help our ranchers when they were, and still are, suffering through the drought," Beebe spokesman Matt DeCample said Friday.
He said the governor respects the EPA’s decision and does not plan to appeal the ruling.
Sen. Mark Pryor, D-Ark., issued a statement Friday sharply disagreeing with EPA’s finding.
"Their decision will not only cause economic harm for our livestock and poultry producers, but it will also negatively impact consumers and food manufacturers," Pryor said. "The EPA should reconsider their decision. Arkansans need relief."
Governors of North Carolina, New Mexico, Georgia, Texas and Virginia had also asked for a waiver of the Renewable Fuel Standard law requiring motor fuel producers to include 13.2 billion gallons of ethanol in the mix this year and 15 billion gallons by 2015.
The waiver denial was welcomed in corn-producing states like Iowa.
Sen. Tom Harkin, D-Iowa, called it a "step forward" in promoting clean, renewable fuels.
"I sympathize with those farmers, ranchers and those in the food industry whose businesses are being hurt by the severe drought. The EPA, however, rightly concluded that the RFS mandates are not the root cause of economic problems, and determined as well that easing the RFS would not have a significant impact on corn prices," Harkin said.