[SUSTAINABLE] Livestock, food industries discuss intensifying push to change law. Ethanol battle unlikely to fade

Efforts to cut or freeze U.S. corn ethanol requirements are unlikely to end with the federal government's denial Thursday of Texas Gov. Rick Perry's plea to waive half of this year's mandate.

Livestock and food industry groups that backed the request already are talking about increased lobbying efforts in Washington to change the law. Legislation under discussion in the Senate could freeze ethanol quotas at current levels, and at least one governor who supported Perry's request is considering a request of his own.

The efforts highlight the momentum behind calls to revisit a policy that only months ago enjoyed wide support but that more recently has been blamed for higher corn and food prices, environmental abuse and international food shortages.

"Suffice it to say, we'll be working with the Congress and the next administration to revisit all of our food-to-fuel policies," said Scott Faber, vice president for federal affairs for the Grocery Manufacturers Association, a trade group that backed Perry's request.

Perry asked the U.S. Environmental Protection Agency to reduce federal ethanol requirements from 9 billion to 4.5 billion gallons in the coming year.

On Thursday the EPA denied the request, saying Perry and other proponents of relaxing the rule did not provide sufficient evidence the law was causing "severe economic harm" to Texas, a requirement needed to justify a waiver.

The law, known as the Renewable Fuel Standard, sets annual quotas for the amount of ethanol and other biofuels that are to be blended into the nation's fuel supply.

Reviewing 15,000 comments

EPA Administrator Stephen Johnson said Thursday the law is an important tool in helping to lessen U.S. dependence on foreign oil, improve air quality and aid American farmers. He also said a number of factors besides ethanol have contributed to high corn, food and fuel prices.

Johnson said he issued the ruling after reviewing more than 15,000 public comments in response to Perry's request.

Perry argued the law has led to skyrocketing corn prices that are destroying Texas' massive livestock industry and pushing up grocery bills for American families.

"This time next summer, with this program left in place the way that it is, we're going to see some staggering food prices," Perry said in an interview with the Houston Chronicle on Thursday.

Federal law requires that the nation use 9 billion gallons of renewable fuel this year and 11 billion gallons in 2009.

By 2022, the Renewable Fuel Standard jumps to 36 billion gallons, though by then more than half is to come from fuels made with nonfood sources.

Matt Hartwig, spokesman for the Renewable Fuels Association, an ethanol trade group in Washington, said the law provides a crucial bridge to the day when renewable fuels can made from nonfood crops or agricultural waste.

But until then, he said, the law is likely to remain under attack by special interests that he said are distorting ethanol's role in rising commodity prices.

Indeed, more challenges to the law are likely in coming months.

In May, Texas' senior U.S. senator, Republican Kay Bailey Hutchison, introduced legislation to freeze the corn-based ethanol mandate at this year's level. The bill has been referred to committee, with co-sponsors including the other Texas senator, Republican John Cornyn, and GOP presidential candidate John McCain of Arizona.

Elsewhere, food industry groups said they will lobby Congress not only to reduce the quotas, but to lower subsidies to biofuel producers and do away with a 54-cent tariff on foreign ethanol.

Support in New Jersey

New Jersey Gov. John Corzine was penning a letter of support to Perry's request when the EPA made its decision this week, said Elaine Makatura, a spokeswoman for the New Jersey Department of Environmental Protection.

Now, he is considering making a request on his own state's behalf, citing environmental issues with producing and burning corn ethanol, Makatura said.

Connecticut Gov. Jodi Rell was the only other governor Perry's office could name that signed on supporting his request. A spokeswoman for Rell did not return a call Friday.

Perry said he was "a little bit surprised that some of the other governors didn't see this as a looming problem for their constituents."

"We're kind of the canary in the coal mine," Perry said.

Houston Chronicle|By BRETT CLANTON

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