WASHINGTON, D.C. — At least four livestock-producing states’ governors want the U.S. Environmental Protection Agency (EPA) to take a year off from enforcing the federal Renewable Fuels Standard (RFS) mandate for ethanol production.

Delaware, Maryland, Arkansas and North Carolina governors have reportedly asked the EPA for a one-year waiver of the mandate, arguing less biofuel demand for corn will help livestock feed buyers obtain it more cheaply in this year of lowered stocks and endangered production.

This comes on the heels of livestock organizations and some members of Congress also pushing for a waiver. (There is no mandate for “corn ethanol” but that’s largely what the United States can technically produce at this point.)

But, would waiving the RFS for one year have significant effect on corn prices? Last week, the Renewable Fuels Assoc. (RFA) and Farm Foundation/Purdue University (see related article on page 4) each gave online presentations about the issue.

The RFA favors keeping the mandate in place, as it is the trade association for the U.S. ethanol industry. Geoff Cooper, its vice president, argued enough ethanol plants have idled or decreased production that the manufacturing rate is already 12 percent below early June and 15 percent below the beginning of 2012.

In fact, he said there’s ethanol in storage right now, in excess of the 20-day supply that is industry benchmark. “If you look back to 2010, 2011, the industry was producing in excess of the RFS,” he said.

Those extra gallons each represent Renewable Fuel Identification Numbers, or RINs, the plants report to the EPA. Cooper said the industry as a whole has about 2.6 billion extra RINs racked up, which can be applied in future years – meaning that many fewer gallons have to be made in the successive year(s).

In addition, he said EPA bases the mandate on 10 percent of national demand for gasoline, so if demand falls there, the mandate number also shifts downward.

Earlier this month, the Energy Information Administration did note gasoline demand was lower for at least the first three months of 2012 compared to 2011 and that consumption is low compared to the five-year average.

Essentially, Cooper said with all this, the industry might be able to get by with as little as 3.6 billion bushels annually to meet the RFS this and next year, instead of close to 5 billion. Also, he said one-third of the corn processed for ethanol goes back to livestock in the form of dried distillers grains (DDGs), a high-protein feed additive.

“A waiver would have little to no impact on corn prices and no impact on food prices,” he opined, adding refineries are already set up to blend 10 percent ethanol into the national supply, and manufacture a lower-octane petroleum gas in order to get an octane boost from adding the biofuel. It could take a few months for them to change their systems to blend less or no ethanol – something he argued as inefficient for a one-year waiver.

Further, Cooper said a waiver would send a “chilling signal” to investors already hesitant to finance cellulosic ethanol and other next-generation biofuel research.

They might question the government’s commitment to biofuel – and farmers might take a waiver as a signal to plant less corn next year, he added.

What the EPA should consider before making a waiver decision, he added, is the net impact on overall food cost and gas prices. Would gas prices go higher with less blending? How would that affect food prices relative to transportation?

Much of the country’s gasoline is blended at an E10 (10 percent ethanol) level, but the EPA and industry are pushing for more E15 pumps for newer vehicles. One station in Kansas is already selling it, and on Friday the RFA reported the U.S. Appeals Court for the District of Columbia Circuit upheld an EPA move to make E15 legal for 2001 and newer vehicles.

Since E15 uses more ethanol than E10, the question was put to Cooper how this might affect demand. “I don’t see the E15 rollout putting a lot of added pressure on the RFS in the next 12 to 18 months,” he said.

If 2013 weather and crop progress are similar to this year’s, he admitted an RFS mandate discussion would need to take place with the EPA.