On October 4th, there was an announcement from the Trump Administration about a deal that had been worked out to try and restore some credibility to the Renewable Fuels Standard (RFS). The worry has been over the wholesale granting of small refinery exemptions (SREs) by the United States Environmental Protection Agency (EPA). The President assured the ethanol industry would release a supplemental rule in accordance with the announcement. On Tuesday afternoon, that proposal was released, and it is drawing much backlash from the supporters of biofuels.
On Tuesday afternoon I had already planned to sit down with Senator Joni Ernst and get her take on the latest developments on the Chinese trade situation. Not even an hour before this call was to take place, the EPA announcement came out. Reactions were flying to my inbox quickly. So, I am sure it was no surprise to the Senator when I asked what was going on. Along with Iowa Senator Chuck Grassley and other lawmakers, Senator Ernst has been one of the vocal supporters of getting the RFS back on track. As the news was still fresh, the Senator was still in the process of reviewing the information. However, she is already telling Iowans to make their voice heard when the comment period opens on this proposal. Ernst says we must send a clear message to the EPA.
The Senator says the President has made his commitment to the biofuels industry, and she believes he will see it through. Now we just need to make sure the EPA is held accountable for its actions.
The National Farmers Union (NFU) was not as complimentary of the Trump Administration. NFU Vice President of Public Policy and Communications Rob Larew said:
?Again, and again, the administration has made big promises to family farmers. And again and again, they have failed to deliver on those promises. We shouldn?t be surprised, then, when President Trump and the EPA swear to fully repair the harm inflicted by small refinery exemptions and then only offer half a solution.
?We might not be surprised, but we are still gravely disappointed. Family farmers have been burned too many times by broken promises and half-hearted support. If this administration wants to earn back their trust, they must make the biofuels industry whole by accounting for all of the gallons lost to these exemptions.?
Iowa Renewable Fuels Association Executive Director Monte Shaw says the EPA is taking a transparent agreement and muddying it with secrecy.
?IRFA members continue to stand by President Trump?s strong biofuels deal announced on Oct. 4, which was worked out with our elected champions and provided the necessary certainty that 15 billion gallons would mean 15 billion gallons, even after accounting for SREs. Unfortunately, only 11 days after President Trump?s landmark announcement, the EPA proposal reneges on the core principle of the deal.
?Instead of standing by President Trump?s transparent and accountable deal, EPA is proposing to use heretofore secret DOE recommendations that EPA doesn?t have to follow. That means there is no guarantee that RFS exemptions will be accounted for in the RFS.
?Instead, the proposal today essentially asks Iowa farmers and biofuels producers to trust that EPA will do the right thing on SREs in 2021 when they have spent the last two years weaponizing SREs to unfairly undermine the RFS. It is unreasonable and counterproductive to expect Iowans to put their faith in EPA to fix the SRE problem when they were the ones who created the crisis in the first place.
?As this proposal goes against the core of President Trump?s deal that we continue to support, we will work with our elected champions and the President to get the deal he proposed, and we all celebrated, back on track. There must be certainty that 15 billion gallons will mean 15 billion gallons to restore integrity to the RFS.?
Shaw?s sentiments were echoed by Growth Energy CEO Emily Skor.
?It is unconscionable that EPA?s proposal betrays President Trump?s promise to rural America. A week ago, Administrator Wheeler personally took to the airwaves and promised Iowa farmers that he would accurately account for lost gallons moving forward based on the ?last three years of the waivers.? Administration officials repeatedly said that 15 billion gallons will mean 15 billion gallons and this proposal fails to ensure that farm families and biofuel producers have the certainty they need to reinvest and rebuild after three years of massive demand destruction at the hands of EPA.
?After completely ignoring Department of Energy (DOE) advice to reduce exemptions, EPA now proposes to use DOE?s deflated numbers to turn a real fix into little more than a Band-Aid. To effectively address demand destruction moving forward, EPA?s fix must incorporate a projection of actual exempted gallons, not simply apply an out-of-date DOE recommendation.
?The proposal released today will do nothing to bring back the ethanol plants that have shut down or help the burden that many of our corn farmers currently face. Every day that passes without the true solution President Trump promised means more and more pain for America?s farmers and rural workers.?
Skor added that Growth Energy is calling for the EPA to hold a regulatory hearing on its proposal right here in Iowa. This way those affected by this proposal can bring their voices directly to the EPA?s ear.
“The farm families hit hardest by EPA exemptions deserve a seat at the table, and that can’t happen if the EPA refuses to hold a hearing in a central location, closer to millions of voices who cannot afford to leave the farm for days at a time,”
The Iowa Corn Growers released a statement of their, ?outrage.?
?Today, we are outraged the Environmental Protection Agency (EPA) did not implement the details that were presented and outlined by the President only eleven days ago. Any proposal that does not account for actual waived gallons under the Renewable Fuel Standard (RFS) fails to restore the integrity of the law. Last week President Trump promised to uphold the Congressional intent of the RFS by addressing the demand destruction brought on by expanded use of small refinery exemptions and prospectively account for those exemptions using a three-year rolling average of actual waived gallons, beginning with the 2020 biofuel standard. Today?s announcement falls well short of that mark, only accounting for the Department of Energy recommendations that the EPA itself ignored.
?The Iowa Corn Growers Association (ICGA) will continue to fight back on demand destruction with our biofuels champions and President Trump to ensure the final 2020 Renewable Volume Obligations (RVO) reflect the commitments made by the President to restore the integrity of the RFS to the benefit of farmers and consumers everywhere.
The Iowa Soybean Association?s statement saying the EPA has once again broken another promise.
?Today?s announcement backtracks on a pledge by President Trump to ensure future Renewable Volume Obligations would account for Small Refinery Exemptions (SRE) based on a three-year rolling average of past waivers. This previously agreed-upon proposal would provide certainty to a struggling biodiesel industry including refineries and farmers.
?Rather than restoring biodiesel demand based on the actual lost gallons, the EPA says it will look at past recommendations from the U.S. Department of Energy (DOE). The EPA consistently ignored DOE recommendations for years under the current administration.
?Today?s announcement further erodes farmer confidence in the administration?s ability to bring closure to the all-important issue of biofuels and its place in America?s energy future. With today?s proposal, countless farm families and biodiesel producers will continue to face lost income and further job cuts. More facilities will close as a result of the continued inaction and the economic losses it creates.
?The EPA must uphold the administration?s commitment to restore demand based on the actual three-year SRE average, beginning with the 2020 biofuel standard and years to follow. The already-waning vitality of America?s rural communities cannot afford to keep playing regulatory games with the EPA.?
Grant Kimberly of the Iowa Biodiesel Board said:
?On behalf of Iowa?s biodiesel producers, we are deeply concerned by EPA?s new proposal to address renewable fuel gallons lost through refinery exemptions to the RFS. The solution President Trump previously promised us would have estimated future exempted RFS volumes based on the average of actual volumes exempted over the past three years. That is the remedy we need to steady the renewable fuels market, help plants re-open their doors, and infuse rural economies still in crisis. This new plan from EPA appears to be a dramatic departure from the agreement struck with the President, and we expect markets to react accordingly. This is likely to inflict further damage on the already struggling biodiesel industry and farm economy. We will join our Iowa political champions, the National Biodiesel Board and other groups in scrutinizing this new proposal, and in ensuring the final rule fulfills the deal President Trump agreed to earlier this very month.?
The voices are loud, and they are angry. The EPA only took 11 days to completely renege on its own assurances. I am curious if this is an example of stubborn defiance or the complete lack of respect they seem to have for the American agriculture and biofuels industries.
Details of the proposal can be found here.
