For Some, Skepticism Follows New Biofuel Deal Announcement

Earlier this week, Trump Administration officials agreed on a plan to boost ethanol and other biofuels. This report came just hours after an announcement that the EPA would be temporarily pausing work on a biofuels policy as a result of the impeachment inquiry and demands from oil representatives.

Based on the deal agreed to, and outlined, the EPA would, “factor recent waivers into new annual biofuel quotas, by adjusting the targets to reflect a three-year rolling average of exemptions,” Bloomberg reported.

In a news release from the USDA and EPA today, they stated the following:

  • EPA will seek comment on actions to ensure that more than 15 billion gallons of conventional ethanol be blended into the nation’s fuel supply beginning in 2020, and that the volume obligation for biomass-based diesel is met. This will include accounting for relief expected to be provided for small refineries.
  • EPA will initiate a rule-making process to streamline labeling and remove other barriers to the sale of E15.
  • EPA will continue to evaluate options for RIN market transparency and reform.
  • USDA will seek opportunities through the budget process to consider infrastructure projects to facilitate higher biofuel blends.

This is a reflection of the deal supposedly agreed upon by Trump and farm-state Senators and Governors earlier in the year that would adjust future years’ RVOs to account for gallons previously exempted. However, that deal fell through, thanks to pressure from the oil industry.

“Trump promised rural America he would fix the waiver issue a month ago,” said former Iowa Lieutenant Governor Patty Judge, in a statement. “Today’s announcement may patch the problem, but it remains below the demand we saw before his election and we have no information on how he’ll implement it.”

Same Old, Same Old?

And this has become a pattern. Several times throughout the last few months, there have been reports that a biofuels deal was done, only to see it undone in a timely fashion after pressure from oil interests.

This has led to some skepticism about the newly-agreed-to deal, and whether or not it will lead to any measurable difference.

“Iowans should be careful about taking another RFS promise at face value. It is very much in question whether this gets done by 2020 and remains free of the poison pills deployed in the past to kill biofuel demand,” said Tim Gannon, Iowa farmer and former USDA official. “Every time the President makes a promise on the RFS, his EPA administrator manages to roll it back for Big Oil, and a lot of the important details will be determined by EPA. The question now is: will this time be any different?”

Just yesterday, Sen. Joni Ernst was questioned about the ethanol dealings during a town hall in Templeton, Iowa, and she gave a timeline of her frustrations with the situation.

“We’ve had many discussions many times over, I’ve had many personal conversations on the phone as well as meetings in the oval office with him as well, talking how we move forward,” Ernst explained. “I understand, on one hand, the President is saying, ‘well, we don’t want to shut down small refineries for the oil folks.’ Okay, I get that, but we’ve got ethanol plants that are closing. We have that right here in the state of Iowa.”

And that urgency has led to greater pressure from legislative leaders around the Midwest on President Trump. Just a couple weeks ago, Ernst and others believed they would be moving forward.

“We came up with a plan to push forward on ethanol and other biofuels. We thought we had a deal. Once word got out, of course big oil came in and threw a big monkey wrench in and said this isn’t fair. Well, it’s the law,” Ernst added. “The RFS is the law. Our federal government needs to be adhering to the law.”

Saving Face With The Base

Trump’s approval rating amongst farmers had been slipping for some time and, finding himself in the middle of an impeachment inquiry, getting a deal done on biofuels seems to be a way to quickly re-rally that support.

“The Democrats running for president have held President Trump’s feet to the fire on waivers for Big Oil,” Judge explained. “Thanks to their constant pressure, Trump is now scrambling to appease rural voters and the biofuels industry, although I won’t hold my breath.”

For now, Trump’s reputation amongst farmers seems to have once again rebounded, thanks to the recent news and the launch of the impeachment inquiry, according to recent pulse-poll from the Farm Journal.

“The President has promised to protect the RFS since the campaign trail, but he personally signed off on 31 demand destroying waivers for oil refiners just two months ago,” Gannon explained. “The latest pledge is only words until we see demand for biofuel gallons start to grow again.”

Of course, as has been the theme throughout, Trump making a deal with corn farmers has once again put him between a rock and a hard place. Oil companies will certainly push back on recent revelations as it threatens their bottom line – a clash Trump has to constantly consider.

“We are deeply concerned about the Administration’s decision to, once again, play politics with our fuel system by increasing an already onerous biofuel mandate, placing greater strain on the U.S. manufacturers he promised to protect and threatening higher costs for consumers,” said American Petroleum Institute CEO Mike Sommers, and American Fuel & Petrochemical Manufacturers CEO Chet Thompson in a joint statement today.

 

By Josh Cook
Posted 10/4/19

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