EPA To Deny Texas Request to Cut Ethanol Mandate

The U.S. Environmental Protection Agency will deny Texas' request to cut the federal ethanol mandate on Thursday, a government official with knowledge of matter said on Wednesday.

Charlie Neibergall / AP

The government official asked not to be identified.

Texas Governor Rick Perry asked EPA in April to reduce the renewable mandate requiring 9 billion gallons of ethanol and other renewable fuels to be blended into gasoline by 50 percent in 2008. Perry said the mandate is pushing up the price of corn, which is used to make most ethanol in the United States.

Livestock producers, who rely on corn to feed their animals, say the rising price of corn is hurting their industry and the higher costs are being passed on to consumers.

U.S. Agriculture Secretary Ed Schafer said last week, however, he would not advise cutting the federal mandate.

"If I were to make a recommendation I would recommend that we not change it," Schafer told Reuters. "I don't think that the economic damage according to the law that allows a change is there."

The EPA consulted with the U.S. Agriculture Department and the U.S. Energy Department about the waiver request. (Watch the accompanying video from last week when Texas Gov. Perry petitioned to waive regulations...)

Corn farmers and representatives of the ethanol industry said the waiver was unnecessary and approving it would hurt investment in the alternative fuel.

"It would send a signal that the federal government is backing away from its commitment to renewable energy," said Tom Buis, president of the National Farmers Union.

Some analysts estimate a corn harvest of 12.2 billion bushels to 12.3 billion bushels this fall, the second largest U.S. crop ever. The crop has rebounded sharply from a cold and rainy spring that delayed planting and slowed development of the crop.

The Agriculture Department will make its first estimate of the fall harvest on Aug. 12.

A ruling on the waiver had been expected by July 24, but the agency said it needed more time to respond to public comments about Texas' request.

EPA Administrator Stephen Johnson will announce the decision at 1:00 pm EDT on Thursday.

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