The EPA announced on May 16 that it will take public comment on Texas’ request that the agency use its authority under the 2007 Energy Independence and Security Act (the “Act”) to cut in half new volume requirements for the production of renewable fuels derived from grain. The Act - which increased substantially the volume requirements for renewable fuels beginning this year - provides EPA with the authority to waive the renewable fuel standard (RFS) requirements upon finding that implementation of the RFS would harm the economy or the environment.

On April 25, 2008, Texas Governor Rick Perry formally requested that EPA use its authority under the Clean Air Act to waive a portion of the RFS for ethanol on grounds that implementation of the mandate “is unnecessarily having a negative impact on Texas’ otherwise strong economy while driving up global food prices.”

EPA, in consultation with the Departments of Agriculture and Energy, must make the determination whether to waive the RFS within 90 days of receiving the petition.

Update: The comment period on Texas’ proposal will close on June 23, 2008.

For further information about this topic, please contact Akin Gump.