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When did 'economics' define EPA's mission?
August 12, 2008

EPA Administrator Stephen Johnson pronounced that the rise in feed costs in the cattle industry is not the result of the Renewable Fuels Standard mandate.

Written by Greg Sagan, Amarillo Globe-News

I admit it: I was astonished last week to see that the Environmental Protection Agency had turned down Gov. Rick Perry's request to halve the State of Texas' ethanol mandate for a year - from 9 billion to 4.5 billion gallons.

In fact I was astonished on many levels.

I was astonished that this policy decision came from the EPA and not the Agriculture, Commerce or Energy departments. I can understand how the original ethanol mandates might be under the EPA's charter, but the grounds for the waiver Gov. Perry requested were not anchored in environmental issues but rather in issues of agricultural economics.

Does anyone in the EPA know anything about the price of feed for the cattle industry? Does anyone in the EPA care?

I was astonished that Gov. Perry applied for the waiver in the first place. With a state government dominated by Republicans, with a Republican president who has both enforced the politicization of our government and bent it to his views and who has driven that politicization down to career levels in so many departments of the government, and with a Democratic majority in Congress that is still too weak to oppose this administration on this kind of issue, I would think there would be more alignment between the state and federal governments when it comes to such policies. I guess I was wrong.

Apparently even among Republicans there is something less than complete homogeneity in views about what is good policy at the state and federal levels.

Frankly, I was astonished to hear these two positions coming from Republicans at all. Republicans are generally viewed as pro-business minimalists when it comes to the role of government. Gov. Perry acted on behalf of Texas ranchers and farmers who are being squeezed by these ethanol mandates, not to mention the rest of us who will pay more for everything from steaks to tortillas if these mandates are pursued, but for whom does the federal government act? So, okay, maybe corn growers in Iowa have better lobbyists than we do.

Or maybe the whole waiver thing was a political ruse, an attempt by our governor to look good to Texans at the expense of an administration that can't look much worse by applying for something he had no hope of getting.

But I was positively floored by the rationale the EPA offered for denying the waiver. EPA Administrator Stephen Johnson pronounced that the rise in feed costs in the cattle industry, which any child can see must be related to increased demand for corn now that corn is a hot commodity in human diets, livestock diets and energy production, is not the result of the Renewable Fuels Standard mandate. I can certainly agree that ethanol mandates aren't the only force driving up feed costs, but it strains credulity to hear someone assert that an increase in demand for a fixed commodity doesn't affect its price.

Aren't Republicans supposed to have at least a fundamental understanding of market economics?

And what are we talking about here, really? A one-year waiver. It's hard to see that as a move that could cripple the ethanol industry. At a time when no one knows the best approach to simultaneously solve skyrocketing costs in oil, food and feed, doesn't it make sense to permit alternative paths? If Texas were to hit on a more durable policy prescription for ethanol production, oil consumption and food/feed production, wouldn't that be a good thing for America as a whole?

I suppose it's possible that we're talking about apples and oranges here, or maybe kernels and cobs. If ethanol is something created from the part of the corn that animals and humans don't eat then it makes no difference whether we produce 4.5 billion or 9 billion gallons of the stuff. But I'm pretty sure that humans, and therefore animals, derive more nutrition from the kernels of the corn, and I'm also pretty sure the kernels contain the ingredients that make corn work as a fuel.

If that is indeed the case, then the ethanol mandate must affect the price of food and feed and the governor's proposal appears sound. It is the EPA that appears to be out to lunch.

As far as EPA Administrator Johnson's contention that the increase in the price of corn does not meet the statutory requirement of "severe harm to the economy," that might warrant a waiver in the ethanol target for our state, I am astonished that he left out a key word: Yet.

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