EPA sides with farmers on ethanol, rejects refinery waivers

Associated Press and Colleen Kottke
Wisconsin State Farmer
About 40% of the nation's corn crop is used for ethanol.

Federal regulators on Monday handed a victory to corn farmers and the renewable fuels industry by refusing to allow a group of petroleum refiners in 14 states to forego requirements to blend ethanol into the gasoline they make.

Members of Congress from farm states have heavily lobbied President Donald Trump to reject the waiver requests for months. Those representing oil-producing states supported the waivers, which were originally designed to help small refineries that struggled financially to meet federally mandated ethanol targets. In recent years, however, larger refineries also have received exemptions from the Trump administration.

The petroleum refiners had sought 54 exemptions retroactively, some as far back as 2011, that would have allowed the petroleum industry to remove hundreds of millions of gallons of corn-based ethanol from the market.

Significant exemptions from the congressional requirement of blending at least 15 billion gallons of ethanol a year into the nations fuel supply began after Trump took office and appointed Andrew Wheeler as administrator of the Environmental Protection Agency.

By agreeing to reject the waivers the Trump administration is essentially fixing a problem it created.

Congressional Republicans including Iowa Sens. Joni Ernst and Chuck Grassley nevertheless lauded Trump for the decision. 

"I applaud President Trump for keeping his word and supporting our farmers and biofuel producers," Grassley said in a statement. 

Wisconsin Corn Growers Assocation’s President Doug Rebout said the state's corn growers are grateful for the recent action.

“This is an important step in providing consumers with choices at the pumps while also upholding the promise made to America’s farmers ensuring the blending of 15 billion gallons of conventional biofuel," Rebout said. "We look forward to the decision on the remaining waivers.”

Democratic Rep. Abby Finkenauer agreed the EPA decision will help Iowa farmers but called out the Trump administration for approving previous waivers that removed 4 billion gallons of ethanol from production and waiting "until 50 days before an election to finally take even this modest action."

National Farmers Union (NFU), which was one of four petitioners in the Tenth Circuit Court case, has consistently voiced opposition to the abuse of small refinery exemptions, most recently urging EPA and the Trump administration to reject these so-called “gap year” requests.

While celebrating the decision, NFU President Rob Larew urged the I administration to follow up by releasing the overdue Renewable Volume Obligations (RVOs) for 2021.

“The fact that EPA has decided not to entertain the unreasonable whims of oil corporations is certainly welcome news for the family farmers and rural Americans whose livelihoods depend on a strong biofuels sector. However, this announcement should have been made many months ago, just after the Tenth Circuit Court Decision," Larew said. "By waiting so long to come to this obvious conclusion, EPA bruised an industry that’s already experiencing reduced demand due to deliberate efforts to undermine the Renewable Fuel Standard and the coronavirus pandemic."

While this week's decision offers some much-needed security and relief for family farmers, Larew said they are still enduring a great deal of uncertainty and financial pressure.

"EPA should take additional steps to address these concerns, starting with releasing next year’s RVOS," he said.

A petroleum industry group response was critical of EPA and Trump.

"The notion that this administration is 'following the rule of law' through its latest betrayal of U.S. refinery workers is laughable," said Chet Thompson, CEO of the American Fuel & Petrochemical Manufacturers, a trade group for producers of fuel and petrochemicals used in many products.

While maintaining the ethanol production levels, the EPA decision also is likely to bring an end to the small refinery exemptions that have plagued the ethanol industry. If the decision isn't appealed or if it is upheld on appeal, only a few small refineries would remain eligible for waivers, said Monte Shaw, executive director of the Iowa Renewable Fuels Association, a trade group.

About 40% of the nation's corn crop is used for ethanol, making such decisions critical for the economy of Iowa, the nation's leading corn and ethanol producer. Many farmers who grow corn were early investors in the ethanol industry and have significant stakes in the industry.