EPA Ethanol Ruling Irks Texas Governor Earlier this year, Texas Gov. Rick Perry asked the Environmental Protection Agency for a one-year waiver to cut the federal ethanol requirement for gasoline. The EPA said no. Perry says demand for ethanol has affected food prices in the U.S.
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EPA Ethanol Ruling Irks Texas Governor

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EPA Ethanol Ruling Irks Texas Governor

EPA Ethanol Ruling Irks Texas Governor

EPA Ethanol Ruling Irks Texas Governor

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Earlier this year, Texas Gov. Rick Perry asked the Environmental Protection Agency for a one-year waiver to cut the federal ethanol requirement for gasoline. The EPA said no. Perry says demand for ethanol has affected food prices in the U.S.

MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

In the running argument over ethanol and food prices, supporters of ethanol won a big round in Washington last week. The EPA ruled against Texas Governor Rick Perry. Governor Perry, who's a Republican, wanted a waiver from the requirement to mix billions of gallons of the corn-based fuel into gasoline. Governor Perry expressed his displeasure with that ruling yesterday on the Wall Street Journal. He joins us today by telephone.

But first, the EPA says that whatever impact the diversion of corn from the food chain to motor fuel is having, it does not constitute severe economic harm, and that's the standard for waiving the ethanol mandate. Why are they wrong?

Governor RICK PERRY (Republican, Texas): Well, for a number of reasons. First, I think anyone who has gotten out of the beltway and went to a grocery store over the course of the last couple of years understand the impact that it's having on the citizens of the United States from the standpoint of spiraling food prices, and those are spiraling upward.

I mean, it's clear to me that those individuals who have made these decisions are making them for political reasons and not plugged in to the economics of what's happening in America today.

SIEGEL: But there are competing economic analyses that the price of oil has driven up the price of corn. Demand for food in the growing economies of India and China have driven up the price. There are other factors other than ethanol, some people say.

Gov. PERRY: I don't disagree with that. But the EPA made the statement that ethanol use of corn was not directly attributable to that. And that's just absolutely a false statement. And then, there's a host of other reasons. I mean, I'm the governor of Texas. We have a very large protein development industry there. The pork industry, the beef industry, the poultry industry, all of those having record losses. This isn't just about the cost of cornflakes and the cost of milk. It's also about the livelihoods of a huge industry.

And if we think we have problems with individuals who are outside the United States who control our petroleum and our energy industry, you wait until we run our protein manufacturers offshore and foreign countries control the supply of beef and pork and poultry.

SIEGEL: But this decision was made by the EPA of President Bush, who is your fellow Texas Republican. How do you interpret the politics of the Bush administration…

Gov. PERRY: I don't understand…

SIEGEL: …who just committed to biofuels, by the way?

Gov. PERRY: I don't understand the administration's decision on this. What they've done is they've picked one industry segment, the corn manufacturers, and they've mandated a subsidy that is driving the price of food and having a very detrimental effect on all the other sectors of the industry.

SIEGEL: But let's say that this is a pro-corn policy, the ethanol policy. As you know, the Houston Chronicle reported that you, after meeting with the senior chair of Pilgrim Poultry Corporation, you got a $100,000 gift to the Republican Governor's Association. He helped pay the way to Washington for you and others to argue on this. You're representing poultry and beef. The corn people have their people, that's one reading of this. It's one well-heeled lobby against another.

Gov. PERRY: Well, I raised these concerns back in July of 2007 when I ruled out a bio-energy strategy that stated that we don't want to have to be choosing between fuel in our cars and feeding our families. And those that would like to get off subject and point to a campaign contribution, basically, they can't argue the facts on their own merits so they'll try to distract the conversation.

So, the facts are these: any thoughtful American understands that when you use four billion bushels of corn to fuel your vehicle, supply and demand still works in America. It's going to drive the cost of corn up. Corn is a major food supply commodity. And in turn, we're seeing incredible pressure on our food prices. I don't think we've even seen the tip of the iceberg.

SIEGEL: Hmm. Well, Governor Perry, thanks a lot for talking with us.

Gov. PERRY: Oh, thank you.

SIEGEL: Governor Rick Perry, Republican governor of Texas whose move to win a waiver from the ethanol mandate was rejected last week by the Environmental Protection Agency.

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