Reps. Fred Upton (R-Mich.) and Henry Waxman (D-Calif.) yesterday issued their second white paper in a series intended as a first step to reviewing the Renewable Fuel Standard (RFS). The first white paper, released March 20, 2013, addresses Blend Wall/Fuel Compatibility Issues. The second white paper, released April 18, 2013, addresses Agricultural Sector Issues. Both white papers are clearly written, carefully documented, and provide excellent overviews of their respective topics.
The second white paper poses nine questions for public comment, and requests that responses be sent to firstname.lastname@example.org by April 29.
Two of the questions deal with the EPA’s denial in 2012 of petitions from ten governors who, seeking to reduce corn prices and alleviate harm to their states’ livestock industries, asked the agency to waive (suspend) RFS blending requirements. I comment on those questions, which are enumerated in the white paper as follows:
3. Was EPA correct to deny the 2012 waiver request? Are there any lessons that can be drawn from the waiver denial?
4. Does the Clean Air Act provide EPA sufficient flexibility to adequately address any effects that the RFS may have on corn price spikes?
My comments develop the following points:
- The EPA should have granted the waiver but the agency’s strained reading of the Clean Air Act virtually guarantees that petitions will be denied regardless of the RFS’s contribution to severe economic harm.
- Congress should revise the statute to preclude the EPA’s deck-stacking interpretation and clarify that the threshold issue is whether, in the context of actual market conditions, the RFS makes a non-negligible contribution to severe harm.
- In controversies arising under regulations the EPA administers, the agency is not an impartial umpire but the primary stakeholder — the main interested party.
- By putting the EPA in charge of deciding whether or not to suspend its own rules, the current waiver provision inadvertently flouts a core principle of constitutional government: No one should be judge in his own cause.
- Congress should transfer the authority to grant or deny waiver petitions to an independent body with no organizational interest in upholding or suspending RFS requirements. In this reformed process, the EPA’s role would be limited to submitting comments like any other stakeholder.
- Although the Clean Air Act provides adequate flexibility (albeit precluded by the EPA’s skewed reading of the statute) to address RFS effects on domestic corn prices, it provides no flexibility to address RFS effects on grain prices in developing countries.
- Congress should revise the waiver provision to include adverse impacts on world hunger among the harms for which petitioners may seek relief.
The full text of my comment letter is available here.