EPA made right decision on renewable fuels

It?s important. It serves a vital purpose. It provides substantial economic benefits.

The ?it? I?m writing about is the Renewable Fuels Standard. And now, thanks to an Environmental Protection Agency decision, implementation of the RFS will continue as legislated in the Energy Policy Act of 2007.

This decision ensures consumers will continue to benefit from an expanding supply of domestically produced renewable fuel, which is helping lower gas prices.

Those savings at the pump are considerable?as much as $500 per year for the average family, according to estimates by Merrill Lynch, Iowa State University and others.

The Aug. 7 decision is an important win for American consumers. People are justifiably focused on pocketbook concerns in today?s economy. Ethanol is one of the few things helping families save money.

For months, opponents of ethanol have been telling those foolish enough to listen that the renewable fuel is responsible for high food prices. Texas Gov. Rick Perry led the charge by arguing the mandate?now mostly met by ethanol made from corn?was raising the price of livestock feed and otherwise upping prices at the grocery store.

Perry demanded the EPA do something about it.

The EPA did something about it all right. The agency denied the Texas governor?s request. Texas had requested a 50 percent waiver of the national volume requirements for the RFS.

As a result, the Renewable Fuels Standard stands pat. The RFS target for 2008 is 9 billion gallons of renewable fuels including ethanol and biodiesel. That raises to 11.1 billion gallons in 2009 and 36 billion gallons in 2022.

Following extensive analysis, EPA administrator Stephen Johnson said the Texas request had not proven the Renewable Fuel Standard is causing ?severe economic harm,? which is the legal requirement for suspending it. To the contrary, Johnson argued, the law is ?strengthening our nation?s energy security and supporting America?s farming communities.?

And this federal mandate can in no way be considered heavy handed. While nine billion gallons of biofuels a year may sound like a huge amount, it?s only 3 percent of the 300 billion gallons of oil the United States burns annually.

There is no doubt high commodity prices are having a limited economic impact, but it?s far less than food processors would lead you to believe.

Today, wheat sells for about $7.50 a bushel in Kansas. A bushel weighs 60 pounds, which is enough to bake about 60 loaves of bread. That means the Kansas wheat farmer received 12 cents for the loaf of bread that cost you $3. The rest goes to the middlemen for baking, milling, labor, transportation, packaging, advertising, taxes and finally, profit.

If you want to single out the main culprit behind higher food prices, I don?t think anyone would be surprised?it?s higher oil costs.

Most Kansans support the EPA?s decision to continue using alternative fuel sources such as ethanol. This strategy will lessen our dependence on imported oil.

The U.S. Environmental Protection Agency made the right call on this one. This nation?s farmers have long, and strongly, supported renewables including, but not limited to ethanol. The renewable fuels standard was good policy when it passed in Congress, and it?s just as good today.

John Schlageck is a leading commentator on agriculture and rural Kansas. Born and raised on a diversified farm in northwestern Kansas, his writing reflects a lifetime of experience, knowledge and passion.

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