Wednesday, 23 July 2008

Ethanol industry braces for EPA decision on its future

The ethanol industry, until recently a golden child accustomed to favorable treatment from Washington, is facing a critical decision on its future.The governor of Texas, Rick Perry, is asking the U.S. Environmental Protection Agency to temporarily waive regulations requiring the oil industry to blend ever-increasing amounts of ethanol into gasoline. A decision is expected as soon as this week.Perry, a Republican, says the billions of bushels of corn being used to produce all that mandated ethanol would be better suited as livestock feed than as fuel. Feed prices have soared in the past two years as fuel has begun competing with food for cropland."When you find yourself in a hole, you have to quit digging," Perry said during an interview. "And we are in a hole."His request for an emergency waiver cutting the ethanol mandate to 4.5 billion gallons, from the 9 billion gallons required this year and the 10.5 billion required in 2009, is backed by a coalition of food, livestock and environmental groups. Farmers, carmakers, ethanol and other biofuel producers are lobbying to keep the existing mandates.

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