Texas Governor Rick Perry submitted a letter to the EPA last Friday requesting a 50% nationwide waiver from the federal Renewable Fuel Standard (RFS) . The RFS calls for roughly 9 billion gallons of renewable fuels in 2008, up from 4.5 billion in 2007. If granted, the waiver would restore the 2007 requirement.

Governor Perry is seeking the waiver reportedly as a way to reduce demand for corn, a popular feedstock for biofuels. In his letter to EPA, Governor Perry claims that 30-35% of corn will be diverted to biofuel production this year, which he claims contributes to rising food costs.

Governor Perry’s request has produced strong reactions from interested parties. Renewable fuels advocates, corn producers, and other agricultural organizations, including the Texas Farm Bureau, claim that ethanol use is not a major factor in food price increases, and that rolling back the Renewable Fuel Standard will harm farmers and the increasing domestic ethanol production capacity that was intended by the Energy Independence and Security Act of 2007. On the other side, livestock producers in Texas applaud Perry’s efforts, arguing that the diversion of corn to ethanol production has led to increased prices of feed, and in turn, the price of meat, eggs, and dairy products.

The letter represents another instance of state action on issues related to climate change. State governments are often an early indicator of the interplay of local economic interests and/or public sentiment on matters affecting state or regional markets.

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