WASHINGTON — Renewable-fuel groups, farm organizations and Midwestern politicians have embraced the Trump administration’s new ethanol proposal as a desperately needed production boost.
“Both farmers and ethanol producers have been really hurting for some time now,” Renewable Fuels Nebraska Executive Director Troy Bredenkamp said in a statement Friday. “Today’s announcement by President Trump is not a cure-all, but it will certainly begin the process of recovering and making right some of the many EPA decisions that have hindered the ethanol sector.”
Bredenkamp described the move as an overdue attempt to repair damage to the Renewable Fuel Standard that requires 15 billion gallons of ethanol a year to be blended into the nation’s fuel supply.
The Environmental Protection Agency has been generously granting small refinery waivers from those requirements. The ethanol industry says that has destroyed product demand and resulted in both idled plants and lower prices for the corn that feeds them.
Under the new plan from the EPA and the U.S. Department of Agriculture, gallons lost to such waivers in the future would be reallocated back into the blending requirements.
Sen. Chuck Grassley, R-Iowa, said that while the reallocation of lost gallons is the “biggest prize of all,” the administration’s proposal also includes removing barriers to the sale of higher ethanol blends known as E15, supporting infrastructure projects related to higher blends and working on related trade issues.
Still, many details remain to be fleshed out, and the country’s oil and gas interests pledged to fight it every step of the way.
Scott Segal, an energy sector lobbyist, disputed the claim that waivers destroy ethanol demand.
Segal also suggested that in trying to placate Midwestern farmers, Trump could cost himself support among blue-collar union workers in swing states like Pennsylvania and Ohio.
Indeed, some refiners say the ethanol industry will never be satisfied and characterized Friday’s announcement as the result of political extortion by corn-state lawmakers.
American Petroleum Institute President and CEO Mike Sommers released a joint statement with American Fuel & Petrochemical Manufacturers President and CEO Chet Thompson.
The administration’s “misguided” plan would punish companies trying to comply with the RFS requirements, they said. “It is by no means a win-win. We will vigorously challenge this new policy in the weeks to come and continue advocating for Congress to reform the RFS.”
Those representing corn country, however, were all about the Friday victory lap, rejoicing at the announcement and touting their own advocacy of it.
The Republican governors of Nebraska and Iowa both praised the move, with Nebraska Gov. Pete Ricketts saying it will “bolster the RFS and ethanol production at a critical time for our nation’s rural economy, which has been suffering from low commodity prices.”
Rep. Adrian Smith, R-Neb., said the announcement complements the administration’s allowing year-round sales of E15 and Sen. Deb Fischer, R-Neb., said it “means more certainty for families, businesses, and communities across the Good Life.”
Sen. Joni Ernst, R-Iowa, called the announcement “great news for Iowa and rural America” while Sen. Ben Sasse, R-Neb., said “Nebraskans are grateful that the EPA is committed to E15 being available year-around and following the law when it comes to small refinery exemptions.”
Democrats in Iowa and Nebraska had seized on the waivers as potent political ammunition.
Rep. Cindy Axne, D-Iowa, for example, recently wrote a letter with Sen. Amy Klobuchar, D-Minn., to U.S. Agriculture Secretary Sonny Perdue highlighting ethanol plant closures and asking the department to study the economic impact of the RFS waivers.
Even Republicans in the Midwest had grown impatient with the administration’s handling of the issue. EPA Administrator Andrew Wheeler came under fire from some GOP lawmakers suggesting oil and gas interests have too much influence over his agency.
In a statement Friday, Wheeler said the new deal is the result of the president’s leadership.
“Today’s agreement is the latest in a series of steps we have taken to expand domestic energy production and improve the RFS program that will result in sustained biofuel production to help American farmers,” Wheeler said.
The proposal still must clear various bureaucratic hurdles before being finalized.
Asked about the potential for the administration to backslide, Grassley said he would “continue to hold EPA’s feet to the fire so that they do as President Trump committed.”
It is possible that oil and gas companies will take their case to court, he acknowledged, but said there’s no reason a judge should strike down rules that comply with the law.
“They can sue if they want to,” Grassley said. “We’ve been fighting them for 30 years.”