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Letter


NTU Members Urge EPA to Waive RFS Mandate.

October 11, 2012

To: By Email/E-Docket Submission The Honorable Lisa Jackson Administrator
U.S. Environmental Protection Agency Mailcode: 6102T
1200 Pennsylvania Avenue NW Washington, DC 20460

From: Nan Swift
Federal Affairs Manager National Taxpayers Union 108 N. Alfred Street Alexandria, VA 22314

Subject: Air and Radiation Docket, Docket ID No. EPA-HQ-OAR-2012-0632



Dear Administrator Jackson:

On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in support of a waiver of the Renewable Fuel Standard mandate.

Since 2005, the Environmental Protection Agency (EPA)-administered RFS has required that ever-increasing gallons of corn ethanol be added to our fuel supply, diverting almost 40 percent of the corn crop to fuel production. The severe drought in the Mid-West this summer only exacerbated already extremely low corn stocks, constricting the market and shooting corn prices up to a record high of over $8/bushel.

This has compounded the harmful consequences of the EPA’s RFS policies, leading to a host of problems including higher food prices – even as salaries have dipped and unemployment remains high.

A National Research Council study, “Potential Economic and Environmental Effects of U.S. Biofuels Policy,” found that feed comprised 69 percent of the cost of livestock production, with corn making up 94 percent of the grains fed to animals. Further, with every $1 increase per ton in corn, feed costs have increased 45-67 cents. With no slack in the corn market due to the drought and ethanol mandate, this has led to extremely high feed prices for livestock producers, making it more expensive to feed and raise an animal than it can be sold for on the market. Producers around the world are therefore forced to slaughter their animals prematurely. Consumers will soon feel that same pain as the price of meat is expected to skyrocket next year.

Corn is also a vital part of the feed for dairy cows and is an important ingredient in one product after another. The record-high corn prices have led to increased pressure on other grains such as soy and wheat, both of which have jumped in price and are found in animal feed as well as numerous food products. Experts at the agriculture investment house Rabobank estimate there will be a 14 percent jump in overall food prices in the next year, a historic run-up.

With budgets already stretched thin, American families shouldn’t have to pay the price for RFS mandates. According to the Bureau of Labor Statistics, in 2010 consumers spent, on average, 13 percent of their annual budgets on food. For poor families, this makes up an increasingly large proportion of their annual income, making this one more instance where the burden of government policy falls on the shoulders of those who can least bear it.

Adding insult to injury, the corn ethanol mandate, resting on empty promises of “energy security,” isn’t helping consumers get any relief at the gas pump. An August Purdue University Study found that since June of this year, the price of corn ethanol has increased 60 cents per gallon, boosting overall gasoline prices by 6 cents per gallon at the pump. In addition, corn ethanol has a lower energy content per gallon than traditional gasoline, leading to a 2-3 percent decrease in fuel economy. This means motorists have to buy more fuel to travel the same distance, increasing consumption and further eroding the prosperity of families who are paying a bigger share of their incomes on energy.

Taxpayers are affected in other ways too, because, for instance, government vehicle fleets pay higher bills to operate and nutrition programs face pressure to adjust benefits upward.

After years of economic struggle, American consumers need a break, preferably a permanent one. Still, even a temporary waiver in the ethanol mandate would immediately open up the corn market, creating a level playing field and relieving the pressure on everyone from food producers to families.

Included, please find the comments of 821 NTU members, consumers, and taxpayers, who share these views. I hope the EPA will find these comments useful in its deliberations.

Sincerely,

Nan Swift
Federal Affairs Manager