WASHINGTON — The ethanol industry is waiting anxiously to see if a tentative deal to boost production of the corn-based fuel will stick.
“We are holding our breath,” Renewable Fuels Nebraska Executive Director Troy Bredenkamp told The Omaha World-Herald. “We are crossing our fingers.”
It’s the latest battle in a long-running war between the Corn Belt’s ethanol producers and the oil and gas industry.
President Donald Trump has reportedly grown weary of trying to broker peace between the two camps as they wrangle over the Renewable Fuel Standard.
That’s the federal requirement that billions of gallons of bio-based products be blended every year into the nation’s fuel supply.
Refiners say the mandate puts a heavy financial burden on them. The Trump administration has been granting “small refinery exemptions” intended to help ease that burden.
But the ethanol industry says the pace of those waivers is destroying demand for their product.
Every time one side appears to gain ground in the dispute, the other pushes back, and the process starts all over again.
Midwestern Republicans have attempted a delicate balance of praising a president still popular with many of their constituents, while taking a hard line regarding the Environmental Protection Agency, which is responsible for overseeing the RFS and the waivers.
Sen. Chuck Grassley, R-Iowa, was recently asked by reporters for thoughts on EPA Administrator Andrew Wheeler. Grassley recounted what he said during a White House discussion.
“When somebody says, ‘Well I wanna hear from Wheeler,’ I said — the whole group heard me say — ‘Well, we’re going to hear from Big Oil,’ ” Grassley said.
Many Midlands farmers viewed the Obama administration’s clean water regulations as overly burdensome and hailed this EPA’s elimination of those rules.
Under Trump’s direction, the agency also moved to allow year-round sale of ethanol blends known as E15 — a change long sought by ethanol producers.
But the ethanol industry says the RFS waivers are taking a serious toll and causing plants to be idled.
Bredenkamp predicted that another 20 to 30 plants could close nationally if current trends continue, with at least some of those in Nebraska.
“It is pretty dire,” he said.
That’s why the industry was heartened by reports that Trump recently agreed to a proposal adding some of the waived gallons back into the requirements.
Reuters calculated that such an approach would represent an additional 1.35 billion gallons in 2020.
“That’s a number we absolutely think we need in order to send the right market signal to let people know, ‘Hey, ethanol is here and it’s here to stay, and the bloodbath that we’ve taken from the EPA over the last three years is not going to continue,’ ” Bredenkamp said. “We’re hoping the president does not renege on that.”
Grassley and fellow Iowa Republican Sen. Joni Ernst have said they need to see the proposal on paper before they feel comfortable that it will hold.
“We have seen EPA throw us under the bus before,” Ernst said Thursday.
And she echoed Grassley’s comments that the Trump administration includes many people who seem to support “Big Oil.”
“I do think there’s a lot of oil influence at some of these agencies, and we just need to be very, very aggressive and vocal,” Ernst said.
EPA spokesman Michael Abboud said in a written statement that the agency will continue consulting with partners about the best way to “ensure stability” in the RFS.
“The Trump administration has overseen year-over-year increases in domestic fuel ethanol production, to the highest level in history, and the United States exported a record volume of ethanol in 2018 for the second consecutive year,” Abboud said. “The President will always seek to engage with stakeholders to achieve wins for the agriculture and energy sectors.”