Georgia Governor Nathan Deal Requests EPA Waive Ethanol Mandate; Cites Severe Economic Harm in State

"It is abundantly clear that substantial evidence exists now within the existing reports of USDA regarding expected crop yields and within private sector forecasts of crop yields that current and futures pricing of corn will result in severe economic harm in the poultry and livestock sectors," wrote Georgia Governor Nathan Deal (R) in a petition sent yesterday (http://www.nationalchickencouncil.org/wp-content/uploads/2012/08/Letter-to-Lisa-P-Jackson-Petition-for-Waiver.pdf) to the U.S. Environmental Protection Agency (EPA). "Georgia is experiencing severe economic harm during this crisis, and important economic sectors in the state are in serious economic jeopardy. This harm is precisely of the type, character and extent that Congress envisioned when it granted EPA authority to waive Renewable Fuel Standard (RFS) applicable volumes..."

Deal becomes the fifth governor, and first Republican, to request that EPA waive the RFS, joining the governors of Maryland, Delaware, North Carolina and Arkansas.

"It can also be reasonably projected that this harm will continue well into 2013, if not beyond 2013, and that the decreasing availability of stocks of grains will only be eased when a new crop season provides an abundance of supply," Deal continued.

As Georgia's largest industry, agriculture accounts for over 15.7 percent of the state's economy in terms of sales and output and represents 11.2 percent of the state's value added production. Georgia agriculture has an annual impact of $68.9 billion on the state's economy and provides 380,000 jobs to citizens of the state. Poultry and livestock are critically important components of the state's economy, representing over 50 percent of Georgia's farm gate value, while broilers alone account for over 40 percent of farm gate value. From a national perspective, Georgia ranks first in broiler production and third in value of eggs produced. For Georgia, the poultry industry alone accounts for over $20 billion in annual economic impact, and an estimated 98,000 jobs depend on poultry directly or indirectly.

Deal's petition notes the University of Georgia has reported that the state's poultry producers are spending $1.4 million extra per day on corn due to the drought and the upward pressure on corn prices caused by the demand created by the RFS for ethanol. This translates to over $516 million per year if these market conditions continue. "These additional input costs are not sustainable, and I urge you to consider all options available to the agency to provide some relief in the coming year," Deal urged.

The National Chicken Council (NCC) voiced strong support for Governor Deal's petition and leadership on this critical issue.

"I am very pleased that Governor Deal has joined the many other voices and requests that EPA has received in recent weeks to waive the RFS for ethanol, including 14 of 15 members of Georgia's congressional delegation in Washington," said NCC President Mike Brown. "As Governor Deal noted, it is now abundantly clear that severe economic damage has occurred, and will continue, as a result of the RFS' strain on the corn supply that has been exacerbated by the worst drought in more than 50 years. Again, I call on EPA Administrator Lisa Jackson to implement the law and grant a full, one-year waiver for the corn-ethanol mandate," Brown concluded.

Governor Deal's petition comes on the heels of an announcement yesterday from EPA that the agency is issuing a Federal Register notice opening a 30-day public comment period on requests from the governors of Arkansas and North Carolina to waive the RFS requirements. The statute provides the agency with 90 days in which to make a decision.

The Energy Independence and Security Act of 2007 updated renewable fuel volume targets. Congress has also given EPA the authority to include provisions that allow the EPA Administrator to grant a full or partial waiver if implementation would severely harm the economy or environment of a state, region, or the entire country.

More information about the comment period and Notice from EPA is available by clicking here (http://www.epa.gov/otaq/fuels/renewablefuels/notices.htm) and here (http://www.epa.gov/otaq/fuels/renewablefuels/documents/2012-rfs-waiver-request-comment.pdf).