ND Department of Agriculture Press Releases

FOR IMMEDIATE RELEASE JUNE 17, 2008

NASDA REFUTES REQUEST TO WAIVE ETHANOL STANDARD

BISMARCK – The leading state agriculture officials of the United States have countered a request by the governor of Texas that the Environmental Protection Agency waive half of the federal renewable fuels standard, mandating the production of ethanol from grain.

“The National Association of State Departments of Agriculture (NASDA) strongly supports the Renewable Fuels Standard . . . as part of the Energy Independence and Security Act of 2007,” said Roger Johnson, North Dakota agriculture commissioner and NASDA president, in written comments to the EPA. “The standard is an important part of our domestic energy policy, and agriculture plays a significant role in meeting the standard.”

Texas Gov. Rick Perry asked the EPA in April to relax the ethanol mandate, claiming it was driving up world food prices and hurting Texas’ economy. The mandate requires the U.S. use 9 billion gallons of renewable fuels this year and 11 billion gallons in 2009.

“The rise in food prices in this country and around the world is due to many factors including historically high energy prices, weather-related events and growing global demand,” Johnson said. “It would be unwise to halt a domestic energy policy aimed at increasing the production and use of domestic renewable fuels. Such an action would be short-sighted and do little to ease the prices paid at the supermarket and would undoubtedly increase the prices that consumers are paying at the gas pump.”

Johnson said Perry should consult researchers, including those at Texas A&M University, who have concluded that the rise in corn prices has little to do with food costs in the United States.

“The Texas A&M report, issued in April, found that petroleum is the primary cause of rising food prices,” Johnson said. “It also said that scaling back the RFS would not lower food prices.”

Simultaneously, Iowa State University researchers released a study showing that ethanol production is helping lower gasoline prices around the country. The study showed growth in ethanol production has caused retail gasoline prices to be 29 to 40 cents less per gallon than would otherwise have been the case.

“American farmers are not only dedicating more acres to corn, they are producing more with 2007 production levels of 13.1 billion bushels – an all-time record,” Johnson said. “The Renewable Fuels Association estimates that during the same 2007 time period, ethanol production consumed approximately 2.3 billion bushels of corn, approximately 18 percent of 2007 US corn production. Total 2007 US ethanol production utilized less corn than the 2006-2007 annual increase in US corn production.”

Johnson urged the EPA to “stay the course” and deny Perry’s request.

“America’s farmers and ranchers have met and will continue to meet the demands of the markets for their products – food, fiber, feed and fuel,” he said.

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MEDIA: For more information, please call Ted Quanrud at (701) 328-2233 or tquanrud@nd.gov or Patrice Lahlum at (701) 239-7210 or plahlum@nd.gov.