As if it wasn’t crazy enough already all around the U.S. politically, it’s getting even more crazy in D.C. where the battle continues over the RFS. It’s a back and forth game of Trump’s promises to help farmers and agriculture and support ethanol and biofuels, EPA giving small refinery waivers to big oil companies, then oops, sorry about that…where does it end?
In today’s Digest, the latest responses from Midwest Senators, the American Coalition for Ethanol, how both Republicans and Democrats are coming together to fight for biofuels.
Midwest Senators Say What?!
Let’s start with the responses from the heart of America. U.S. Senators Deb Fischer (R-Neb.), Chuck Grassley (R-Iowa), Joni Ernst (R-Iowa), John Thune (R-S.D.), Mike Rounds (R-S.D.), Roy Blunt (R-Mo.), and Mike Braun (R-Ind.), each submitted comments to the Federal Register regarding the Environmental Protection Agency’s supplemental rule on the Renewable Fuel Standard. In individual letters to EPA Administrator Wheeler, the senators expressed concerns about the way the agency plans to calculate the reallocation of biofuel gallons lost due to exemptions for oil refineries.
“Just this week, the CEO of a major oil refinery bragged that small refinery exemptions were ‘a real cash flow that [they] get every year.’ This is at the expense of farmers and biofuel producers. The EPA’s proposed rule fails to ensure that 15 billion gallons of conventional ethanol are actually blended into our nation’s fuel supply. In my letter, I called on Administrator Wheeler to fulfill the president’s commitment and provide certainty for rural America,” said Senator Fischer, a member of the Senate Agriculture Committee. Read her letter here.
“As the number one producer of corn, ethanol, biodiesel and cellulosic ethanol, the renewable fuels industry is an important sector of Iowa’s economy. It generates nearly $5 billion of Iowa’s GDP, over $2.4 billion in household incomes and supports 47,000 jobs across Iowa. President Trump made a commitment to Iowa and other biofuels producing states, and I look forward to seeing this promise fulfilled. The EPA shouldn’t undercut President Trump’s support of the Renewable Fuels Standard. I urge EPA to adjust the proposed supplemental rule to account for actual waived gallons using hard data from past practice to provide certainty to the marketplace,” said Senator Grassley. Read his letter here.
“Plain and simple, if the market for biofuels does not trust EPA to implement the proposal President Trump negotiated, the market will not make investments in biofuels – a dangerous spiral for Iowa farmers and producers which will only lead to more plants closed and jobs lost in the heartland. It is time again for EPA to get this policy right, respect the President’s intent, and uphold the law as it was written. This means providing certainty that EPA will ensure that 15 billion gallons of ethanol will be blended each year,” said Senator Joni Ernst, member of the Environment and Public Works Committee. Read her letter here.
“While I appreciate the administration’s commitment to restore integrity to the RFS and provide that at least 15 billion gallons of conventional biofuels are blended into the fuel supply, the proposed supplemental rule unfortunately lacks safeguards that will assure its intent. As you know, resolution of this matter is of critical importance to agriculture stakeholders in South Dakota and across the country, and I urge EPA to reconsider the incorporation of language to make certain that all gallons waived by SREs will be accounted for in final RVOs.” said Senator Thune. Read his letter here.
“We’re grateful to President Trump for his commitment to assuring 15 billion gallons of ethanol is blended into our fuel supply annually,” said Senator Rounds. “However, the EPA’s proposed rule fails to honor the agreement which the president directed them to formalize. Taking steps to fully restore the integrity of the RFS will honor the agreement as Congress intended.” Read his letter here.
“Missouri farm families have faced a number of challenges over the past year, from catastrophic flooding to market uncertainty and now the EPA’s failure to uphold its commitments to the biofuels industry,” said Senator Blunt. “Renewable energy policies like the RFS have helped diversify our nation’s fuel supply while creating and sustaining jobs, strengthening local economies, and lowering gas prices. I urge the administration to produce a final rule that addresses the concerns my colleagues and I have raised and supports America’s biofuels producers.” Read his letter here.
“The state of Indiana is the fifth largest ethanol producing state in the country,” said U.S. Senator Mike Braun. “I urge the EPA to implement the agreement in a way that provides certainty to Hoosier farmers and refiners.” Read his letter here.
On November 4th, over 60 corn, soybean, and biofuel groups wrote a letter stating that the EPA’s supplemental rule would not accurately account for small refinery exemptions and would hurt farm economies and biofuel plants in rural America. To read their letter, click here.
Some more from Iowa
Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw had this to say:
“We applaud Gov. Reynolds and Sens. Grassley and Ernst for leading the fight to repair the RFS. When the EPA proposal came out, IRFA was proud to stand alongside Iowa Corn, Iowa Soybeans and the Iowa Biodiesel Board to condemn the rule as falling short – short of fixing the SRE problem and short of adhering to what President Trump had promised our elected officials. Today, Iowa’s elected leaders are saying loudly and clearly that EPA must adopt a real-world fix. Agriculture is suffering right now, and EPA has the ability to help by providing certainty for the RFS. EPA needs to make it right.”
In her comments, Gov. Reynolds noted: “The Renewable Fuels Standard that is intended to protect an important market for corn and soybeans is being undercut by the same government that promised to defend it… This proposed supplemental rule has created even more uncertainty in the market.”
Sen. Grassley wrote: “The way the rule was written and put out for public comment does not deliver on the same understanding I had leaving the Oval Office… we discussed a very specific proposal to consider the three-year rolling average of actual exemptions granted by EPA including the specific numbers.”
Sen. Ernst stated: “The Supplemental Notice clearly and directly provides the Agency with continued flexibility to waive more gallons than it reallocates…Given EPA’s implementation of the RFS for the last three years; however, we are rightfully low on trust…It is time again for the EPA to get this policy right, respect the President’s intent, and uphold the law as it was written.”
According to Iowa Renewable Fuels Association, on Monday, a broad coalition of 60 agricultural and biofuels groups sent a letter to the White House calling on President Trump to fix the flawed proposal from EPA, which “fails in its mission to reinvigorate farm economies and reopen biofuel plants across America’s heartland.” The full text of the letter and a list of signers is available here.
From South Dakota, ACE
In South Dakota, the American Coalition for Ethanol (ACE) CEO Brian Jennings issued the following statement:
“ACE members, farmers and renewable fuel producers value the ongoing leadership of these Senators to help get the RFS back on track by following the rule of law. These key U.S. Senators and other elected leaders had a deal with President Trump that ensured at least 15 billion gallons of ethanol blending under the RFS beginning in 2020. The deal was based on the promise that EPA would account for the three-year rolling average of actual gallons waived through Small Refinery Exemptions (SREs) from 2016 to 2018. A deal is a deal. We expect EPA to account for actual gallons waived through SREs from 2016 to 2018 to ensure at least 15 billion gallons of ethanol blending beginning in 2020. We’re grateful for these Senators working to see this deal through, and this serves as a reminder that all ethanol advocates should use this comment period as an opportunity to make their voice heard on how this rulemaking personally impacts you, your business, and your community.”
Where are the Dems?
Democrats are fighting for biofuels too. The Democratic caucus sent a letter to House leadership urging biodiesel tax credit extension. Congresswoman Abby Finkenauer (IA-01) and Congresswoman Kendra Horn (OK-05) led a Democratic caucus letter to House leadership urging action on extension of the biodiesel tax credit. Specifically, the lawmakers are asking for extensions of the biodiesel, alternative fuel vehicle refueling property, and second-generation biofuel producer tax credits.
In the letter addressed to House Speaker Nancy Pelosi and House Ways and Means Chairman Richard Neal, the representatives wrote, “…we respectfully urge you to find a path forward for the expired clean energy tax incentives that have lapsed in recent years. Extending the biodiesel, alternative fuel vehicle refueling property, and second-generation biofuel producer tax credits are especially important to the regions we represent. Their extension is not only a step towards reducing greenhouse gas emissions…, but also would bring much-needed relief to those that counted on these incentives.”
So what to do?
According to Politico, ethanol producers are now looking to expand their sales in Mexico after Trump’s biofuel plan to help make up for the lack of ethanol support in the U.S. “The U.S. Grains Council, the American Coalition for Ethanol and the Mexican Association of Service Station Equipment Suppliers have been working with Mexican officials to host workshops in Mexico to promote the use of a 10 percent blend of ethanol, referred to as E10, in the nation’s transportation fuel,” according to Politico. “They’re targeting Mexican gas station owners, petroleum equipment retailers, and state and federal agriculture and energy officials.”
“American ethanol exports to Mexico are currently primarily for industrial uses like perfumes, solvents and beverages, but more retailers in border cities are buying pre-blended E10 at U.S. terminals for resale at convenience stores and service stations,” according to Politico.
Senator Amy Klobuchar wrote a column in the Des Moines Register a few days ago saying enough is enough and instead of dividing the country, she wants to bring the country together. “We have a president who wakes up every day thinking about how he can divide this country. We need to stop the mean tweets, divisive attacks and broken promises. We need to look up from our phones and listen to each other. And we need to start working together. Because I believe there’s so much more that unites us than divides us.”
So it’s a bit crazy right now and we don’t know when it will end, but the good news is if you want to do something about it, you can. And it’s not a Republican issue or a Democrat issue or whatever your political affiliation is…it’s a biofuels survival issue. Want to submit a comment to the Federal Register, yourself? Click here.