Over the last few years, biofuel policy has become a major flashpoint of conflict between rural supporters of President TrumpDonald TrumpMark Walker to stay in North Carolina Senate race Judge lays out schedule for Eastman to speed up records processing for Jan. 6 panel Michael Avenatti cross-examines Stormy Daniels in his own fraud trial MORE and oil lobbyists working in Washington. The last administrator of the Environmental Protection Agency handed out dozens of secret exemptions to big oil companies, allowing them to sidestep long standing renewable energy laws. It is an approach that cut billions of gallons of homegrown ethanol out of the market, destroying a key segment of the rural economy.
As a result, ethanol consumption in the United States fell for the first time in 20 years. Farmers were hit the worst and now carry the highest debt income ratio since the farm bust of the 1980s. Calls to the Farm Aid crisis hotline have doubled. President Trump, who vowed that his administration is protecting ethanol, fired the former EPA chief and appointed Andrew WheelerAndrew WheelerOvernight Energy & Environment — 'Forever chemical' suits face time crunch Lawmaker asks ex-EPA chief why he couldn't convince Trump climate change is real Virginia exits multi-state coalition backing EPA in climate lawsuit MORE to take over, but the damage has yet to be repaired. In fact, it may be getting worse. Wheeler announced more oil industry handouts last month, bringing the total to 2.6 billion gallons over two years, which is enough to eliminate the market for nearly one billion bushels of grain.
Rural Republicans who gave the new EPA administrator the benefit of the doubt are understandably livid. Dozens of ethanol plants across the country have cut production or closed their doors, even as farm communities look to rebuild from recent devastating floods and a demoralizing trade war. Meanwhile, oil refiners like Exxon and Chevron that won the “hardship” exemptions have had multibillion dollar profits.
Democrats are already pouncing on this blunder. Senator Amy KlobucharAmy KlobucharHillicon Valley — Presented by Cisco — Feds forge ahead on internet 'nutrition labels' Senate set for muted battle over Breyer successor Hillicon Valley — Biden celebrates 'right to repair' wins MORE, who is running for president, told Iowa caucus goers that “biofuels in the Midwest get screwed” by the EPA exemptions. It is a message winning her new followers among rural voters who overwhelmingly voted for President Trump in 2016. The headlines do not help either. In a Reuters story titled “EPA disregarded biofuel rules to help refineries,” it was revealed that the agency quietly ignored recommendations from the Energy Department, which could find no financial justification for the oil industry handouts.
The truth is that petroleum companies simply worry about losing the battle for market share if consumers get more options at the fuel pump. Biofuel blends reduce emissions and deliver more octane. Moreover, they also cost less, as pure ethanol now trades for about 70 cents less per gallon than unblended gasoline. That is why competition is good for drivers and American energy security. It is also precisely why Congress enacted the renewable fuel standard under President Bush back in 2005.
With all eyes on the Organization of the Petroleum Exporting Countries and gasoline headed toward $4 per gallon in some markets, it is hard to see why any agency would shut out lower cost fuel made in the United States. In response, rural advocates like Senator Joni ErnstJoni Kay ErnstUS maintains pressure on Russia amid concerns of potential Ukraine invasion Sunday shows - Russia standoff over Ukraine dominates GOP senator says US should impose sanctions on Russia MORE have called on the EPA “to reallocate waived gallons and establish a clear procedure” to evaluate future exemptions. However, Wheeler has argued the agency simply has no mechanism that would allow it to restore lost gallons, as exemptions are filed retroactively after regulators determine how much biofuel each refinery is responsible for adding to the national fuel mix.
But there is some hope. Representative Dave LoebsackDavid (Dave) Wayne LoebsackPelosi to seat Iowa Republican as Democratic challenger contests election results Iowa Democrat who lost by six votes will appeal to House Iowa officials certify Republican Miller-Meeks's 6-vote victory MORE got to the key point during a recent hearing in the House Energy and Commerce Committee. He questioned Wheeler whether the EPA could decide on exemptions first before setting annual biofuel targets. By shifting from a retroactive approach to forward looking approach, the EPA could ensure the full volume of biofuel required by law actually reaches consumers.
Indeed, Wheeler admitted the EPA “would have the ability to do that.” All it would take is for the agency to account for anticipated exceptions in the annual biofuel targets. It is worth noting that the EPA already does the calculation. It simply just has not been willing to act on it. President Trump has shown he is willing to crack down on insiders at the EPA when they threaten to undermine rural prosperity. This is one of those times. We cannot accept bureaucratic excuses for inaction. Farmers were promised a chance to compete at the fuel pump, and it is time to keep that promise.
James Talent served in Congress as a Republican senator from Missouri and championed the creation of the renewable fuel standard in 2005. He is a chairman of Americans for Energy Security and Innovation and a senior fellow at the American Enterprise Institute and the Bipartisan Policy Center.