On behalf of the Competitive Enterprise Institute (CEI), a non-profit public policy group specializing in regulatory issues, I respectfully submit this comment letter in support of petitions requesting a waiver of the Renewable Fuel Standard (RFS).
Since the RFS was adopted, corn use for ethanol tripled from 1.6 billion bushels in 2005/2006 to 5.0 billion in 2011/2012. Not coincidentally, corn prices tripled from $2.00 a bushel in 2005/2006 to $6.00 a bushel in 2011/2012. With the corn crop depressed by the worst drought in 50 years, corn prices hit records highs in August, reaching $8.29 per bushel. Those high prices impose significant hardship on poultry, beef, pork, and dairy producers, who use corn as animal feed. By pre-allocating an ever-growing share of the nation’s corn crop for ethanol manufacture, the RFS intensifies and prolongs price spikes when drought or other adverse conditions reduce supply.
Waiving the RFS would help calm corn futures markets and, in some measure, alleviate widespread economic distress in the petitioning States.