The U.S. Environmental Protection Agency will reject dozens of requests that would allow oil refiners to continue to reduce how much ethanol and biodiesel is blended into the nation’s fuel supply, the agency announced Monday.
The move follows requests from Iowa lawmakers to President Donald Trump, asking his administration to stop granting hardship waivers to oil refiners. Renewable fuels groups warned the president last month that without action, he risked losing rural voters, a block vital to his reelection bid.
The announcement is a reversal. Since 2016, Trump’s EPA has approved 85 small refinery exemptions that the ethanol industry says has cut 4 billion gallons of ethanol and biodiesel the oil industry was required to blend into the nation’s fuel supply.
In a letter to refiners, EPA administrator Andrew Wheeler said the EPA will deny 54 of 68 retroactive waiver requests.
“This decision follows President Trump’s promise to promote domestic biofuel production, support our nation’s farmers, and in turn strengthen our energy independence,” Wheeler said in a statement Monday.
“At the EPA, we are delivering on that promise by following the rule-of-law and ensuring 15 billion gallons are blended into the nation’s fuel supply,” Wheeler said.
Ethanol and biodiesel have been a boon to Iowa and Midwest farmers, boosting corn and soybean prices for nearly two decades. Iowa produces the most ethanol and biodiesel in the U.S. And it’s a national leader in growing corn and soybeans, the crops used to make the biofuels.
End of a long nightmare for renewables?
The long “refinery exemption nightmare should be over,” Monte Shaw, the Iowa Renewable Fuels Association executive director, said Monday.
Iowa leaders celebrated Monday’s announcement, noting that farmers have struggled in recent years: Trade wars have slashed exports. The coronavirus slammed the brakes on demand for ethanol, along with gasoline. And the hurricane-force winds of a derecho last month trampled an estimated 14 million acres of corn and soybeans across a third of Iowa.
“As Iowa farmers grapple with trade disruption, a global pandemic and the aftermath of a devastating derecho, it’s critical that we take action to help our ag economy,” said Gov. Kim Reynolds, a Republican who hosted the president in Cedar Rapids last month.
A federal appeals court ruled in January that the agency “exceeded its authority in granting” certain exemptions. The court said that small refinery waivers awarded after 2010 could be approved only as extensions of pre-existing waivers.
But most recipients of waivers in recent years have not continuously received them, and refiners sent in retroactive waiver applications to come into compliance with the court ruling.
This year, the EPA is considering almost 100 requests, including 30 waivers that are sought for 2019 and 2020.
Shaw said Trump’s action on the retroactive waivers “short circuits a blatant attempt by some oil refiners to skirt” the Renewable Fuel Standard, a law passed in 2005 that requires a growing amount of ethanol and biodiesel to be blended into the nation’s fuel supply.
“With gap-year waivers denied, the number of refiners eligible to even apply for — let alone receive — an RFS exemption going forward is reduced to single digits,” Shaw said in a statement.
The oil industry slammed the decision, saying the Trump administration action will hurt workers.
“Today’s announcement and contemplated cash-payment plans are bad for the refining industry, its workers and consumers — all of whom the president has promised to protect,” the Fueling American Jobs Coalition, a group of union workers, small gas station owners and independent American oil refiners, said in a statement.
Jeff Jorgenson, who farms near Sidney in southwest Iowa, said the oil industry “found a loophole” in the law, and the waivers “were overused.”
“It left a bad taste in your mouth,” said Jorgenson, president of the Iowa Soybean Association board.
Bloomberg reported on Friday that the Trump administration is developing a plan to provide refineries whose waivers were rejected with financial aid to offset the potential economic damage.
An ‘obvious political stunt,’ critic says
Iowa Democrats said the Trump administration created many of the problems U.S. farmers face — and criticized the president for not acting sooner on the waiver requests.
Denying the waivers “50 days out from the election is an obvious political stunt to help the president’s reelection efforts,” said Patty Judge, co-founder of Focus on Rural America, a nonprofit group that supports progressive causes and groups.
Trump had a 1 percentage point lead in Iowa over former Vice President Joe Biden, the Democratic nominee, in the November election, according to a Des Moines Register/Mediacom Iowa Poll this summer. In 2016, Trump carried Iowa by 9.4 points over Democratic nominee Hillary Clinton, a former secretary of state.
“Trump made this mess,” said Judge, Iowa’s former ag secretary and former Democratic lieutenant governor. “Rural America cannot handle the uncertainty that comes from the president’s trade wars on Twitter and his desire to boost Big Oil.”
“We need a president who will implement the rule of law, and that includes a strong RFS, not handouts to oil and gas,” the Democrat said in a statement.
Support for renewable fuel has been a contentious issue between U.S. Sen. Joni Ernst, a Republican, and Democratic challenger Theresa Greenfield, a Des Moines businesswoman.
Ernst said Trump answered her call for the waiver requests “to be thrown out” after she pushed the president “to dispense” with the gap-year waivers during his August visit to Iowa.
Renewable fuels producers “have for too-long been yanked around by the EPA,” Ernst said in a statement. “The fight for Iowa’s renewable fuel industry, and our farmers, is not over.”
Greenfield criticized Ernst in a tweet for voting to confirm the appointment of Wheeler, a former energy lobbyist whose agency “issued 85 RFS waivers, devastating our farmers.”
U.S. Rep. Abby Finkenauer, an Iowa Democrat, said the announcement is “welcome news to those of us who have been fighting for years against Big Oil’s attacks on the biofuels industry.”
“That said, it’s tough to applaud a move that is simply following the law,” Finkenauer said in a statement.
“This administration has already granted numerous waivers that drove down commodity prices for farmers and eliminated markets for biofuels producers,” she said. “Supporting homegrown energy shouldn’t be subject to the whims of politics and election-season calculations.”
U.S. Sen. Chuck Grassley, an Iowa Republican, said he’s glad the EPA listened to the “common sense from farmers and biofuels producers.”
Iowa farmers, who send half their corn crops to ethanol plants, have heard for months that the administration would fully support renewable fuels —but their concern over the requested waivers has grown louder in recent weeks.
“Iowa may very well hang in the balance,” farm leaders, including officials from the Iowa Corn Growers Association, wrote the president last month.
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at email@example.com or 515-284-8457.
Your subscription makes work like this possible. Subscribe today at DesMoinesRegister.com/Deal.