Another Try at RFS Opt Out Ahead?

December 21, 2008 06:00 PM
 

via a special arrangement with Informa Economics, Inc.

Some states may try, again, to opt out of RFS mandate, but not until Obama EPA team arrives

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


If ethanol futures prices continue higher than retail gasoline prices, some observers predict some states may request to opt out of the Renewable Fuels Standard (RFS) mandate. If the ethanol price remains at a premium to gasoline prices at the pump, some state officials will argue that mandating ethanol blends is leading to higher gasoline prices for already strapped consumers.

Waiting until after Jan. 20. Any request to opt out of the RFS will likely wait until President-elect Barack Obama's administration is in place at the Environmental Protection Agency (EPA), sources inform, and that means after the Jan. 20 inauguration day for Obama.

Some say a new EPA team could look more favorably on any opt out request. Others say that it would take a clear trend of higher ethanol prices vs gasoline prices to coax any RFS change.


Comments: I know of no state or any other entity that has indicated they will try for an opt out, but some energy contacts have signaled a possible attempt at an opt out next year if the current ethanol price/gasoline price structure continues.

With new players in the three spots that have input into any RFS waiver request -- EPA, Energy and USDA -- it will be interesting to see if the strong support that marked candidate Obama's stance translates into continued strong backing of corn-based ethanol under President Obama.

Incoming USDA Secretary Tom Vilsack is on record in favor of ethanol and the mandate.But whether incoming Energy Dept. chief Steven Chu or new EPA administrator Lisa P. Jackson share that stance remains to be seen.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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