Senator seeks to suspend ethanol requirements in major disaster areas

Source: Amanda Peterka, E&E reporter • Posted: Friday, December 21, 2012

A presidential declaration of a major disaster area would trigger a suspension of the nation’s ethanol requirements under a proposal by a Utah senator that could be voted on this week.

Sen. Mike Lee (R) filed the proposal as an amendment to the Superstorm Sandy disaster assistance bill currently on the Senate floor.

Under the amendment, the U.S. EPA administrator would be required to waive the requirements of the renewable fuel standard in any area declared a major disaster. The suspension would last for the full 90-day period of the disaster declaration.

The amendment Lee filed Tuesday also would temporarily suspend any other fuel or fuel additive requirements regulated by EPA in areas declared a major disaster.

According to the Federal Emergency Management Agency, last year there were 99 major disaster declarations in the country. There have been 47 this year, mostly for storms and flooding.

It’s not clear yet whether the amendment will receive a vote this week. Senate Majority Leader Harry Reid (D-Nev.) has indicated he is working on an agreement on amendments to the bill, a $60.4 billion measure that would help states affected by Superstorm Sandy. The filing deadline for amendments is this afternoon.

The 2007 renewable fuel standard sets yearly requirements for traditional corn-based ethanol and advanced biofuel. In 2012, it required that refiners blend 13.2 billion gallons of traditional ethanol into the nation’s fuel supply.

Lee’s office did not respond to a request for comment or details on the amendment. But in an earlier letter to EPA Administrator Lisa Jackson, the Utah senator requested that the renewable fuel standard be waived for up to a year to provide relief to livestock producers suffering from the drought and high corn prices.

“The Renewable Fuels Standard (RFS) mandate exacerbates this upward pressure on the price of corn by creating artificial demand for corn, and the downstream effects have been devastating to America’s food producers and consumers,” Lee wrote.

The letter was one of many sent by livestock state governors and organizations requesting the waiver. EPA eventually denied the request in a move that was cheered by biofuels and agriculture organizations that dispute the argument that ethanol drives up corn prices and competes with food.

Tom Buis, CEO of ethanol trade group Growth Energy, called the amendment by Lee “completely unnecessary.”

“The facts are simple. The administrator of the EPA already has the authority to temporarily suspend the RFS if necessary in the event of shortages,” he said. “This would only exacerbate fuel shortages in an emergency, further complicating recovery efforts.”