Trump administration tries to pacify farmers with major biofuels boost
“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,” EPA Administrator Andrew Wheeler said in a statement.
The package may help President Donald Trump shore up support in Iowa and other Midwestern farm states, where recent polls have shown his approval ratings underwater.
Corn-state lawmakers were quick to praise the deal.
“President Trump has made clear that he is an ally of corn and soybean farmers as well as ethanol and biodiesel producers,” Sen. Chuck Grassley (R-Iowa), said in a statement. “He is fighting for the farmer. This announcement is great news for Iowa, the Midwest and the entire country.”
The happy talk from Grassley marks a stark change in tone for the Iowa senator who has been hammering the EPA for months calling the agency a “tool for big oil” and prodding Trump to take action or risk losing the votes of beleaguered farmers. An impatient Grassley last month said the Obama administration handled the RFS better than the Trump administration, and a week later, he told reporters, “Let’s either do our job or get off the pot.“
Oil refining industry lobbyists and their allies in Congress have warned that the ethanol harms their workers in states that are equally vital to Trump’s reelection hopes, such as Pennsylvania, but they were unable to win any concessions in the deal. For example, EPA said it would consider changes to ensure RIN market transparency, but it made no mention of price controls on RFS compliance credits, called Renewable Identification Numbers, as some refiners had requested.
Oil refiners have tried to portray the program as equally vital for blue-collar workers in the crucial swing states of Pennsylvania, Ohio, and Michigan, where Trump’s approval is also negative. They slammed the new package and promised to challenge it.
“We are deeply concerned about the Administration’s decision to, once again, play politics with our fuel system by increasing an already onerous biofuel mandate,“ Mike Sommers, CEO of the American Petroleum Institute, an oil producers trade association, and Chet Thompson, CEO of the American Fuel and Petrochemical Manufacturers, a refining industry trade group, said in a joint statement. “If this arbitrary policy was conceived to help farmers, it provides no immediate relief — instead it only further distorts the fuels market. 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.”
Sen. John Barrasso (R-Wyo.), chairman of the Environment and Public Works Committee, echoed that sentiment.
“Any plan to transfer small refineries’ biofuel obligations to other refineries will do more harm than good,” Barrasso said in a statement. “No one should be surprised if it leads to closed refineries, lost jobs, and higher fuel prices.”
Farmers have taken a beating during the Trump administration, watching exports to China drop by more than 50 percent, struggling to find enough labor to harvest crops, and facing bad weather that will hurt this year’s yields. But farmers rage erupted when Trump personally approved 31 refinery exemptions this summer, fewer than last year but far more than during the Obama administration.
The Nebraska Corn Growers Association called the exemptions “a slap in the face” and biofuel producers from across the Midwest sounded alarm bells that farmers who had voted Trump in 2016 were ready to abandon ship. Meanwhile, Trump’s stock with voters in in the region is falling, as Morning Consult’s state-by-state tracking datashows Trump with negative net approval in Iowa, Wisconsin, and Nebraska.
The biofuels package marks the administration’s effort to make up for lost ground. EPA’s announcement promised an “accounting” in blending mandates to make up for volume lost from refinery waivers. An EPA official later explained that EPA will require larger refiners to blend extra gallons based on a three-year rolling average of the number of exempted gallons, which for the upcoming 2020 compliance year will be more than a billion gallons. As a result, refiners will have to blend more than the 15 billion gallons of conventional ethanol required law, the EPA official said.
The administration had been expected to remove barriers to the sale of 15 percent ethanol by permitting gas stations to use the same tanks they use for 10 percent ethanol fuel — the standard gasoline used in most cars — for E15, ethanol and oil industry sources said earlier this week, though the EPA official did not address this topic on a call with reporters today and it was not mentioned in the agency’s announcement. The move could be crucial in increasing ethanol sales and taking advantage of the administration’s decision to allow year-round sales of E15 in a rule proposed this summer.
The biofuels industry praised the deal, insisting that Trump has now come through for farmers.
“It’s been a long process, but when the chips were down, President Trump delivered for farm families and biofuel producers,” Growth Energy, an ethanol producer trade association, said in a statement.
EPA will issue a supplemental rule to add to the proposed rule that sets blending requirements for 2020 and 2021. The EPA official said to expect the proposal to be in the Federal Register next week. The agency is required to issue a final rule by Nov. 30.