Trump's latest plan to boost ethanol miffs both corn groups and the fossil fuel industry

Trump's latest plan to boost ethanol miffs both corn groups and the fossil fuel industry
© Getty Images

New details released Thursday as part of the Trump administration’s plan to boost ethanol are getting low marks from key corners of President TrumpDonald John TrumpTrump opens new line of impeachment attack for Democrats Bloomberg to spend 0M on anti-Trump ads in battleground states New witness claims first-hand account of Trump's push for Ukraine probes MORE’s base: corn farmers and the oil and gas industry.

The proposal gets to the heart of what has angered farmers across the Corn Belt — waivers given to small refineries that exempt them from adding ethanol to the fuel they produce.

ADVERTISEMENT
The Environmental Protection Agency (EPA) announced earlier this month that it would require other larger refineries to add those exempted gallons into their fuels. But the formula unveiled by the agency Tuesday would require those refineries to add ethanol based on projections rather than the actual number of gallons exempted.

This is angering ethanol groups that had praised the policy just a little over a week ago.

“If the Oct. 4 announcement from EPA was a big step forward, today’s supplemental proposal is a step backward,” Renewable Fuels Association President and CEO Geoff Cooper said in a release, asking for an intervention from Trump himself. “This proposal is not what was promised by the administration.” 

Ethanol producers worry there will be a major disconnect between the actual number of gallons of ethanol that are not blended into the fuel supply after the EPA doles out waivers and the number of gallons the government projects will be exempted.  

“We are outraged the Environmental Protection Agency did not implement the details that were presented and outlined by the president only eleven days ago,” the Iowa Corn Growers Association said in a statement. “Any proposal that does not account for actual waived gallons under the Renewable Fuel Standard (RFS) fails to restore the integrity of the law.”

The EPA in August announced it was giving out 31 such waivers to small refineries, bringing the total to 85 under the Trump administration, a sharp uptick from the fewer than 10 that were issued under former President Obama. 

That proved a catalyzing event for farmers, particularly in Iowa, who have been putting political pressure on Trump for find a fix.

Trump has since been struggling to please both corn farmers and the oil and gas industry with his attempts to reform the RFS program, alternatively angering one side or the other with each hint at a new proposal.

On Tuesday, both groups were united in their displeasure. The oil and gas industry opposes changes to the waiver process mainly because it doesn't think larger refineries should have to take on the gallons small refineries pass up.  

“While the granting of widespread small refinery exemptions should not be occurring in the first place, there is simply no logic in forcing complying refineries to bear the burden of decisions outside of their control. We are evaluating our options and fully intend to vigorously challenge this misguided policy,” Frank Macchiarola, vice president of downstream and industry operations at the American Petroleum Institute, said in a statement to The Hill. 

The proposal still faces a 30-day comment period, and the EPA expects to finalize a new policy by the end of the year.

EPA sent out a list of comments praising the ethanol policy, but some were from when the proposal was first announced at the beginning of October.

Sen. Chuck GrassleyCharles (Chuck) Ernest GrassleyBooker, Sanders propose new federal agency to control drug prices GOP eager for report on alleged FBI surveillance abuse Johnson opens door to subpoenaing whistleblower, Schiff, Bidens MORE (R-Iowa) said in a statement Wednesday that the EPA would need to ensure biofuels actually get blended into traditional fuels if farmers are to be happy with any proposal.

 

"Ultimately, this will come down to trust and implementation at EPA. The ethanol and biodiesel industries have a lot of cause to distrust EPA and that is understandable. But President Trump brokered this deal and any attempt to undermine it from EPA would represent a betrayal of the president. I expect EPA would not do that after all the work that’s gone into this issue,” Grassley said.

Farmers in Iowa, however, have been critical of Trump’s plan, even when major trade groups praised it earlier this month.

“I don’t think he is going to win the farm vote this year. I really don’t,” Jeff Samuelson, whose family farm is near Tipton, Iowa, said of Trump. “This gets pretty personal when this affects our bottom line.” 

Updated at 10:36 a.m.