A reversal on RFS agreement has renewable fuels industry frustrated

Oct 18, 2019  | 3 min  | Ep4509

Many U.S. farmers continue to support the trade war with China. However, attitudes change when it comes how EPA is hampering ethanol sales.

Commodity groups and ethanol advocates in Iowa, where the bulk of the nation’s corn-based fuel is made, are saying they are no longer “Iowa nice.”

Peter Tubbs reports.

 

Despite comments from the EPA to the contrary, representatives of the biofuels industry feel the Environmental Protection Agency has failed to keep promises made by the White House.

Craig Floss, CEO Iowa Corn Growers:“I would just say promise and deal made. We expect a promise and deal to be kept. That's all we're asking. It's very simple.” 

 

On Tuesday, the EPA released its proposed rule to reallocate biofuel blending requirements. The Agency chose to use the three year average of lost demand rather than the actual number of gallons waived. The new calculation, based on Department of Energy data, is roughly two-thirds of what was promised by the White House during a meeting on October 4th.

Grant Kimberly, Executive Director, Iowa Biodiesel Board: That’s what we are asking the EPA to do, that’s what we’re asking President Trump to weigh back in with the EPA to make sure that they follow through with what we agreed to.”

 

The EPA says the reduction – about 600 million gallons – is meant to adjust for future refinery exemptions, not to make up for previous waivers.

Since taking office, the Trump Administration has issued 85 waivers to small oil refineries, reducing the amount of renewable biofuels in the nation’s fuel supply by 4 billion gallons over 35 months. In 2018, the United States produced 16 billion gallons of ethanol and 1.8 billion gallons of biodiesel. During the Obama Administration, the EPA issued, on average, a single waiver per year.

Senator Charles Grassley, who attended the October 4th meeting with President Trump and EPA Administrator Wheeler, believes the fina  l rule will reflect the terms agreed to at that meeting.

Senator Charles Grassley, R – Iowa: “And I expect the President to keep his commitment, it isn’t only the President’s commitment, that’s what the law requires, it says 15 billion gallons in the law. So that’s where we are and I expect the law to be carried out.”

In the last year, 19 ethanol and 9 biodiesel plants have been idled due to low prices. Industry experts estimate that three-fourths of the plants still operating are losing money each day. 

The renewable fuels industry remains skeptical the EPA will follow through with the terms the White House agreed to.

Monte Shaw: “We can't even get the EPA to follow a court order to follow the law. And we're supposed to trust them in 2021 to, to treat us right when there is a per, it's not like, it's not like there's no, not another viable alternative either, right?”

The EPA is having a public hearing at the end of October followed by a 30-day comment period.

For Market to Market, I’m Peter Tubbs. @PeterTubbs

 

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