“The Act clearly set up a credit program with a credit life, meaning Congress intended parties to use credits in some cases instead of blending renewable fuel. The Act is best read to harmonize all of its provisions. In addition, we note that other provisions of the Act may lead to less renewable fuel use in a given year than the statutorily-prescribed volumes, but Congress adopted them and intended that they could be used. For instance, the deficit carryover provision allows any obligated party to fail to meet its RVO in one year if it meets the deficit and its RVO in the next year. If several obligated parties took advantage of this provision, it could result in the nationwide total volume obligation for a particular calendar year not being met.”

There are essentially no limits to the deficit carryover provision, other than it can not have been invoked during the prior year and if invoked in 2008 can not be used again by the obligated party in 2009. If anyone used the provision in 2007 it would be a very rare, therefore it is essentially available to all obligated parties now.

This foresight, on the part of the original lawmakers, addresses both the Texas Governor’s petition as well as the uncertainty brought about by the flooding in the corn-belt areas of Iowa.

For those who are looking for EPA’s most likely response to any waiver request, consider Clayton McMartin officially on the record now. The answer will be “this issue was anticipated in the original Act and is to be addressed with the use of RINs.” Of course nothing is black and white when it comes to politics, so we will all have to wait to hear EPA’s official response later this month.

Now for some related news. Governor Perry is scheduled to open the inaugural RINWorld Summitwww.RINsummit.com in Dallas Texas on October 16, 2008. Industry leaders will convene to learn more about the emerging markets for renewable fuels, cost effective implementation of the RFS, and the future of renewable fuels in America.