The Biofuels Producers Coordinating Council, a recently-formed group of eight biofuel industry groups, on Monday submitted a letter to President Obama urging his support for the controversial Renewable Fuels Standard.
"A number of groups and some governors seem to believe that the RFS is a substantial part of the equation when it comes to grain prices, and waiving the program this year or next will ease the impact of the drought on consumers. There is substantial evidence to the contrary," the groups wrote.
The Renewable Fuels Standard mandates specific volumes of corn ethanol production, and in light of recent drought conditions, livestock groups are concerned that the corn supply will not be able to satisfy both the feed grain and the ethanol markets.
Over the past weeks, Congressmen, state governors and a variety of livestock groups have joined the campaign for a waiver of the RFS. Last week, the Environmental Protection Agency released a 30-day notice of public comment to solicit opinions on the possibility of an RFS waiver.
However, there are still an array of RFS proponents, and new data that could support their cause. A recent study from Purdue University neither supports or opposes the waiver, but did find that a waiver may have little immediate impact on corn prices.
The biofuels coalition also argues that an RFS waiver will minimally impact grain prices. In their letter to President Obama, they say immediate relief from higher grain prices will not come from a waiver.
Citing the Purdue study, the coalition argues that there are enough production credits to allow refiners to meet RFS requirements without impacting this year's crops or ethanol stocks.
"It is also important to note that refiners cannot immediately stop or even reduce their use of ethanol. Ethanol is critical for octane levels and Clean Air Act (CAA) compliance. It is highly misleading for proponents of an RFS waiver to suggest that such action will significantly change refiner behavior, and thus reduce corn prices, in the near term," the groups write.