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CAGW Supports Ethanol Mandate Waiver

June 24, 2008

The following statement was issued today by Tom Schatz, President, Citizens Against Government Waste:

“On behalf of the more than 1.2 million members and supporters of Citizens Against Government Waste (CAGW), I am expressing my support for Governor Rick Perry’s (R-Texas) request to the Environmental Protection Agency (EPA) to waive the ethanol mandate for the state of Texas to reduce this year’s Renewable Fuel Standards (RFS) by half.

“While last year’s renewable fuels mandate was 5.4 billion gallons, the Energy Independence and Security Act of 2007 mandates 9 billion gallons of renewable food-based biofuel use in 2008, 15 billion gallons by 2015, and 36 billion gallons in 2022. While the mandates should be repealed altogether, Governor Perry’s request is a reasonable first step in the right direction.

“Ethanol subsidies and RFS mandates have led to more than 25 percent of the U.S. corn crop being diverted to ethanol production, which is driving up corn prices and making it harder for Americans to feed their families. Farmers are diverting acreage away from the production of soybeans, wheat and other grains, and putting it into corn production. This has led to a 5 percent increase in food prices, double that of inflation. By 2015, 40 percent of the corn crop is expected to be diverted to ethanol production.

“CAGW also supports elimination of ethanol subsidies and import duties on ethanol. A subsidy of $0.51 per gallon for all ethanol blended with gasoline goes to petroleum blenders in the form of a tax rebate. There is an additional $0.10 per gallon subsidy to producers who sell less than 60 million gallons per year and a $0.54 per gallon import duty on ethanol.

“As Americans struggle with record high energy prices and Congress continues to fails to enact meaningful energy legislation, Governor Perry is leading the way for the states to do all they can to provide relief for families and businesses. The EPA should grant Governor Perry’s request.”

Citizens Against Government Waste is the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.




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