During a two-hour meeting, the Trump administration discussed how to settle the backlash from farmers over a recent Environmental Protection Agency announcement related to biofuels. Last week, the EPA decided to grant even more waivers of Renewable Fuel Standard volumes, awarding a whopping 31 of 38 total Small Refinery Exemption applications for the 2018 compliance year.
Sources told Reuters that President Trump’s administration has been scrambling to stem the tide of rising anger in Farm Belt states after its decision this month to allow numerous oil refiners to mix less ethanol into their gasoline. The waivers, combined with those issued for 2016 and 2017 RFS volumes, brings the total number to more than 80 retroactive waivers, which significantly reduces biodiesel demand and, bottom line, results in billions of dollars in economic harm to the U.S. biodiesel industry.
National Corn Growers Association President Lynn Chrisp has said, “If the EPA continues to grant retroactive waivers, the RVO numbers are meaningless and the EPA is not following the law. Farmers are facing a very tough economic environment and the continued waiver abuse chips away at farmers’ bottom line.”
Growth Energy CEO Emily Skor responded to the EPA claim that the recent trend of issuing small refinery exemptions has had no impact on ethanol producers. “The latest reports say President Trump ‘felt misled’ about the EPA’s most recent batch of small refinery exemptions. That’s hardly a surprise. The EPA spent months trying to paper over the devastating impact these refinery handouts have had on farm communities and rural workers in America’s biofuel sector.
“They can’t hide the simple fact that dozens of biofuel plants have cut production, and ethanol consumption fell for the first time in 20 years in the wake of these exemptions. Closures in Iowa, Illinois, Kansas, Minnesota, Florida, Virginia, Texas, Pennsylvania, Missouri, and Nebraska are only the beginning.
“Just today, the world’s largest ethanol producer closed a major plant in Indiana and cut production across seven states. Hundreds of millions of gallons of production are offline, and hundreds of millions of bushels of grain are falling in value, just as farmers face the worst economic conditions in a generation.
“The Renewable Fuel Standard creates an incentive that opens the market to biofuel blends, including the E15 that President Trump personally embraced. These exemptions destroy that incentive, pure and simple. You cannot carve billions of gallons from America’s biofuel targets and still keep this administration’s promises to farm families. EPA needs to account for these lost gallons immediately and start repairing the damage before more rural communities lose hope for a comeback.”
This dispute pits two of Trump’s major supporters against each other, farmers and oil companies. With the 2020 election just around the corner, Trump is looking for a way to settle the unrest and gain supporters in key states. It was unclear what direction the administration will take, but it was clear they needed to find other ways to boost demand for ethanol.