EPA won't reduce ethanol requirement

WASHINGTON, Aug. 7 (UPI) -- The U.S. Environmental Protection Agency refused Thursday to reduce its quota for ethanol use from 9 billion gallons this year and 11 billion gallons in 2009.

The request for the change came from Texas Gov. Rick Perry, representing a state where ranchers blame the increasing use of corn for ethanol for high feed prices, The New York Times reported.

EPA Administrator Stephen Johnson said the ethanol requirement is helping farmers and keeping oil consumption down without causing "severe harm to the economy or the environment."

Sen. Chuck Grassley, R-Iowa, representing one of the major farm states, called the decision a "victory" for farmers, the environment and national security, The Hill, a Washington political newspaper, reported.

"I am greatly disappointed with the EPA's inability to look past the good intentions of this policy to see the significant harm it is doing to farmers, ranchers and American households," Perry said.

The high prices for both oil and corn have had a mixed effect on the ethanol industry, the Times said. Ethanol production has exceeded the mandate, but some producers are losing money because of the high cost of raw materials.