Texas governor trying to slash ethanol production

[June 25, 2008]  WASHINGTON (AP) -- Texas Gov. Rick Perry, supported by livestock producers concerned about rising feed prices, stepped up his effort Tuesday to pressure the federal government to cut ethanol production requirements in half.

The Republican governor told a roomful of mostly supporters at the National Press Club that requiring increases in ethanol production and uses of it as motor fuel is "no longer a good idea. It's hurting America. It's hurting our families."

Perry is one of a number of politicians and others who have been calling for a reversal of the Renewable Fuel Standard that Congress approved last year. Opponents of the standard say the push to turn more corn into ethanol is raising food prices and the cost of feed for livestock.

The clamor has elevated as flooding of corn and soybean fields in the Midwest delivered another jolt to already higher grain prices. There are fears that the corn crop, which had risen because of higher demand from developing countries and U.S. ethanol producers, could be smaller because of the floods.

Matt Hartwig, spokesman for the Renewable Fuels Association, said it is too early to speculate on the corn crop. He said farmers already are replanting, and increased global production also should help.

The Environmental Protection Agency will cull through thousands of written comments sent in response to Perry's request for the reduction in mandated ethanol production. The law gives the EPA administrator authority to waive the production requirements after consulting with the Energy and Agriculture secretaries.

Perry's request has drawn cheers and jeers from around the country and throughout the agriculture, alternative fuels and food industries. The issue is splitting the agricultural industry nationally and in his home state, as well as alarming biofuels producers.

Corn and peanut growers want the EPA to reject Perry's request, while dairy and beef producers are lining up behind it. Those opposing Perry's effort say his oil producing state would benefit from a drop in ethanol production because it would have to be replaced with gasoline, further increasing gas prices. But Perry argues his plan would reduce gasoline prices, particularly diesel.

Ralph and Vikki Glosemeyer, hog and cattle farmers from Marthasville, Mo., are among the supporters who sent the EPA written comments. They said they are being "doubly hit" because of low hog prices and "extremely high" prices of corn and soybean meal used to feed their hogs.

"We need your help to survive as do many other small farmers facing the same situation today, the couple said.

But Lawrence Lee Harrison, an executive vice president of Berkshire Biodiesel in Williamstown, Mass., urged the EPA to deny Perry's request. His company is building a $65 million, 50 million gallon a year biodiesel plant in Pittsfield, Mass., Harrison said.

"The major driver of food price increases is the skyrocketing price of oil," Harrison said.

Lonnie "Bo" Pilgrim, CEO of chicken producer Pilgrim's Pride Corp., told the EPA his company bought more than 320 million bushels of corn and the about 133 million bushels of soybeans for soybean meal last year, about 5.2 percent of the nation's corn used for animal feed and 7.2 percent of the soybean meal that is produced.

Pilgrim is a top donor to Perry. Pilgrim contributed $216,500 to Perry's campaign from 2004-2007, according to Texans for Public Justice.

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The docket number for Texas Gov. Rick Perry's ethanol waiver request is EPA-HQ-OAR-2008-0380.

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On the Net:

To read comments on Perry's request: http://www.regulations.gov/

Renewable Fuels Association: http://www.ethanolrfa.org/

[Associated Press; By SUZANNE GAMBOA]

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