Kansas corn and ethanol leaders told Administrator Scott Pruitt Tuesday that his efforts to undermine the Renewable Fuel Standard (RFS) are helping Big Oil while hurting rural America. Administrator Pruitt was in the state touring the East Kansas Agri Energy LLC ethanol plant in Garnett.
Growers told Administrator Pruitt they were “mad as hell” about EPA efforts they believe undermine the RFS law. The EPA administrator told the standing-room-only crowd that as regulators, EPA is not supposed to pick winners and losers.
Kansas Corn Growers Association President Ken McCauley said farm and ethanol groups at the meeting wanted to set the tone and help Administrator Pruitt understand the frustration being felt in rural America.
“When you look at what EPA is doing, they are most definitely picking winners and losers and right now, ethanol is the loser,” McCauley said. “Our concern was that Administrator Pruitt thought he could come to Kansas, take a few photos with smiling farmers and tell the President that corn farmers are okay with his actions. That would be a gross misinterpretation of what happened here today. I told him that EPA’s attacks on ethanol don’t just hurt plants like EKAE, they hurt farmers, rural communities, and American consumers who benefit from ethanol with lower prices and cleaner air.”
In a meeting that was serious and at times, tense, corn growers and ethanol supporters explained the problems EPA has caused by destroying demand for ethanol. Pruitt said he had to grant the small refinery exemptions because of a recent court ruling that allows refiners to only show financial hardship. However, he did not articulate how financial hardship was defined.
“We asked him what constituted financial hardship and I can’t say we got an answer” McCauley said. “He told us the standards had changed and that RINs were more volatile. But there is no transparency in these decisions.”
Kansas Corn leader Dennis McNinch, Utica told Administrator Pruitt farm families and ethanol plants were hurting from EPA’s actions.
“To be honest, Administrator Pruitt, we’re mad as hell. Today, the American farmer is struggling to make ends meet and our industry is on the cusp of financial ruin in many areas of the country. We are under attack once again from the oil industry as they try to unravel the RFS using their latest scare tactic claiming that RINs are about to put them out of business. Big oil is enjoying wide profit margins today. People like Senator Cruz believe that the oil industry needs to be thrown a bone. How many bones do they need?”
Administrator Pruitt thanked the speakers “despite rather harsh criticism. It’s important for me to hear how passionate and concerned you are about the issues,” he said.
He provided some insight into areas that could benefit ethanol. He said he supported an RVP waiver that would allow year-round E15 sales and believes EPA has the authority to grant it, eventually. He also said he thought the gallons in the refinery waivers should be reallocated to the RFS obligations to account for lost demand.
“We will hold the Administrator to his promises,” McNinch said. “Unfortunately, he consistently tied these positive actions with his so-called ethanol deal that includes assigning RINs on ethanol exports. We don’t think that’s legal, and we are sure it would draw trade challenges through the WTO.”
Administrator Pruitt spoke strongly in favor of reallocating waived RINs to refiners back to the RFS obligations. Currently, those waived gallons represent lost demand.
“Whether we have an agreement or an understanding going forward on these issues, I think it’s really important to us to enforce that if we grant an exemption, those RINs are recaptured and reallocated to the RVO. That’s a huge change that’s never been done. That’s a regulatory process. That’s just out of fairness,” Pruitt said.
Today Pruitt is scheduled to visit South Dakota where he will be getting a less than friendly welcome. The South Dakota Corn Growers Association is planning a tractor rally in Sioux Falls to protest his visit.