The U.S. Environmental Protection Agency on Friday announced it will retain the current Renewable Fuel Standard (RFS), turning down requests for a waiver due to high corn prices. As corn prices spiked in the face of this summer’s drought, livestock and food organizations, and some state governors, petitioned the EPA to temporarily suspend the RFS, which currently mandates that fuel companies use 13.2 billion gallons of biofuel this year, with most of that being ethanol produced from corn. For 2013, the biofuel target expands to 13.8 billion gallons.
RFS opponents argue for flexibility in the mandate, allowing less ethanol production in years of tight supplies, while proponents believe the RFS is a key tool for shifting the country toward clean, renewable and domestic energy. Each side cites research supporting their position. Results of a study by economist Thomas E. Elam, president of FarmEcon LLC, for example, indicate the RFS causes considerable volatility in feed prices and inflated retail food prices.