The real problems with all the “stop turning corn into liquid fuel” noise in the press is that the EPA only has the authority to wave some of it. The rest of the authority belongs to the Clean Air Act and in this respect ethanol is one of the best oxygenators for the fuel which cuts smog and ozone. Added to that ethanol is a cheaper oxygenator by about a buck a gallon so I doubt seriously if the gasoline refiners will give it up. Bottom line is it is a great way to pander to growers and livestock people who have been abandoned by the House of Representatives who could not get a Farm Bill passed. But is not going to free up a lot of corn and even then it will be expensive.

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/6585987

Texas governor asks US waive ethanol mandate on drought impact

Washington (Platts)–24Aug2012/136 pm EDT/1736 GMT

Texas Governor Rick Perry on Friday asked the US Environmental Protection Agency to waive its ethanol mandate as a severe drought shrivels this fall’s expected corn harvest.

His petition marked the fifth state to formally ask EPA to alter the Renewable Fuel Standard’s requirement for blending corn-based ethanol into gasoline supplies for 2012 and 2013.

It comes four years after EPA rejected a similar request by Perry. He said the ramifications of this year’s drought could be worse than the conditions he cited in the 2008 petition.

“The forecasts are dire, as crop yield and overall productions are projected to be lower than anticipated,” Perry said in a letter to EPA Administrator Lisa Jackson, adding that ethanol production and the corn market have changed considerably since 2008.

“Requirements for ethanol derived from corn starch have increased more than 60%; meanwhile, domestic corn production in 2012 will be less than in 2008, perhaps substantially so,” he added. “In the past two years, more corn has been devoted to ethanol production than used for feed grain.”

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Go there and read. More next week.

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