Georgia latest state seeking to end U.S. ethanol rule

WASHINGTON (Reuters) - Georgia, the center of U.S. poultry production, is adding its voice to a string of states asking Washington to help ease pressure on corn prices by suspending rules that send a large share of the crop to produce ethanol.

Ethanol fuel made from corn is blended with gasoline under a federal program meant to encourage domestic energy sources, but the rules can be waived under a formal appeal from a state.

Livestock farmers complain that demand for ethanol wrongly diverts a large share of the feed corn they need and drives up prices already inflated by a long dry season.

"The unprecedented drought experienced in major crop areas of the country, especially throughout extensive areas of the Midwest and South, has significantly decreased crop yields," Georgia Governor Nathan Deal wrote in a letter seen by Reuters that seeks a waiver of the ethanol mandate.

Poultry farmers in Georgia are spending about $1.4 million more in feed costs per day due to the drought and ethanol rules, the governor said, and those higher costs are causing dire economic harm.

In recent weeks, five states have urged the U.S. Environmental Protection Agency to suspend the ethanol mandate, which would require that 13.2 billion gallons (50.3 billion liters) of ethanol be made from corn this year. The agency said on Monday that it would consider that request.

Ethanol, however, is strongly supported by the renewable-fuels lobby and by lawmakers and farmers in the U.S. corn belt.

The EPA has until around mid-November to decide on the waiver requests, meaning the agency could wait to rule on the contentious issue after national elections on November 6.

Congressman Bob Goodlatte, a Republican from Virginia who has called for a waiver of ethanol requirements, said the EPA should make a decision as soon as possible.

"Time is of the essence in this effort, and farmers and consumers alike need answers and relief sooner rather than later, not long after the growing season is over and the damage has been done," Goodlatte said.

The agency will collect comments from the public for 30 days, as it attempts to gauge what effects the mandate will have on the economy.

After rejecting a petition from Texas Governor Rick Perry in 2008, the EPA said waiver requests have to prove that the mandate itself is the cause of severe economic harm to a region and not just a contributing factor.

(Additional reporting by Ayesha Rascoe; Editing by Dale Hudson, Lisa Von Ahn and Russ Blinch)

Source: http://news.yahoo.com/georgia-latest-state-seeking-end-u-ethanol-rule-154448474.html