EPA deals cattle ranchers a blow

— -- In a win for corn growers and a setback for cattle producers, the U.S. Environmental Protection Agency on Thursday denied a request by Texas Gov. Rick Perry to slash the required volume of renewable fuels such as ethanol that are blended with gasoline.

In a statement, EPA Administrator Stephen Johnson said the request "did not meet the criteria in the law." Johnson said the renewable fuels standard "remains an important tool" to cut greenhouse gas emissions and lessen U.S. reliance on foreign oil.

Federal energy law requires the use of 9 billion gallons of ethanol, biodiesel or other renewable fuel in 2008, and 11 billion gallons next year. Federal law also calls for U.S. firms to use 36 billion gallons of biofuels by 2022.

Critics — some livestock producers, food processors and lawmakers — contend that using one-third of the U.S. corn crop this year to make ethanol leads to higher feed and retail food prices that hurt the livestock industry and consumers.

Perry, a Republican, had requested a one-year waiver so that the alternative fuel mandate would be cut in half for 2008. But the EPA found "no compelling evidence" that the mandate "is causing severe economic harm."

Perry, calling the EPA move "bad public policy," says that grocery food costs will rise even more and that Texas cattle ranchers — who use grains to produce 30% of all U.S. fed cattle — may suffer record losses in 2008.

"The EPA needs to get out in the real world and touch base with people in grocery stores who are paying ever-escalating food prices," Perry says.

The Texas Cattle Feeders Association says that cattle producers in the USA's largest beef-producing state lost $1.5 billion in the first six months of this year.

"We support the government's pursuit of energy independence," says association spokesman James Hunt, "but we simply don't believe that one industry, ethanol, should be given a competitive advantage over another, the livestock industry."

The National Corn Growers Association praised the EPA move, saying that higher corn and retail food costs are caused not by more ethanol production, but by higher oil prices. Despite Midwest flooding in June, economists predict the second-largest corn harvest this year in U.S. history.