Governors' Biofuels Coalition

Democratic presidential candidates are seizing on the administration’s decision to grant exemptions to U.S. biofuel laws.

Democratic presidential candidates are exploiting a controversial White House ethanol policy to try to generate support among President Trump’s staunchest backers.

The Environmental Protection Agency waived ethanol blending requirements for more than 30 petroleum refiners earlier this month, in a move that continues to infuriate farmers and politicians in Iowa and elsewhere in America’s breadbasket.

So far, the EPA is showing no signs of backing down. And Republican-aligned farm representatives say Democrats now have a big opportunity in agricultural communities already reeling from flooding and Chinese retaliatory tariffs.

“Trump’s broken a promise out here, a big one. So, I think the door’s open,” Monte Shaw, executive director of the Iowa Renewable Fuels Association and former Republican candidate for the state’s 3rd Congressional District, told National Journal. “This is an issue that could be a real twofer. It could help you win the caucuses, but it could also set you up for the general.”

However, vows of support for ethanol, a corn-based fuel that is blended into nearly all gasoline sold nationwide, from some Democrats are sparking a backlash from an emboldened environmental Left, which argues that stance is incompatible with aggressive action on climate change.

Environmental groups are fanning out in Iowa to proselytize vehicle electrification. And the ethanol fight, analysts say, could prove critical in Democratic efforts to gain the formidable backing of climate-minded voters in both the primary and general elections.

“Our position is that you can be a climate champion or you can be a supporter of corn ethanol, but you cannot be both,” said Rose Garr, vice president of Waxman Strategies, a firm headed by former House Energy and Commerce Chairman Henry Waxman.

“We need transformational, very quick change to meet our carbon-reduction goals,” Garr added. “And to be endorsing a fuel that still has 60 percent of the emissions of gasoline is similar to, say, endorsing natural gas over coal, which for Democrats and for the environmental community was something they did make a decision to do 15 years ago but they wouldn’t do nowadays.”

Democratic operatives in Iowa, however, are quick to dismiss the environmental Left’s clout in the state.

“There are some fringe groups from out of state that try to pop in every once in a while and stir the pot on biofuels, but they don’t make any headway,” said Jeff Link, a key Democratic political consultant in the state. “They’re not actually getting any support outside of just being on social media and talking to their supporters in California or wherever they’re from.”

A 2017 Agriculture Department report concluded that corn-based ethanol produces 43 percent less life-cycle emissions than gasoline on average. Ethanol needs to meet only a 20 percent decrease threshold in order to qualify for the Renewable Fuel Standard, the program that now mandates 15 billion gallons of ethanol blending annually.

But Garr, along with representatives of other environmental groups like the National Wildlife Federation, argues that ethanol production is only modestly, if at all, more beneficial to the environment than gasoline, pointing to waterway pollution, deforestation, and habitat destruction, as well as the use of fossil fuels to power ethanol plants.

“The National Wildlife Federation has been sharing with candidates and policymakers alike the environmental consequences of the Renewable Fuel Standard and efforts to expand corn production,” Mike Saccone, a spokesperson for NWF, wrote in an email. “We’ve underscored that our leaders cannot say they’re serious about acting on climate while simultaneously being 100 percent in favor of the ethanol mandate.”

Still, some leading Democrats, including former Vice President Joe Biden, who continues to top the polls, are aiming to capitalize.

“President Trump has lied to Iowa farmers at every turn,” Biden tweeted last week following reports that Trump personally approved the waivers. “He promised to ‘unleash ethanol’ but instead all he’s done is secretly unleash Big Oil from its renewable fuel obligations. I’ll support our farmers—not sell them out to the highest bidder.”

Sen. Amy Klobuchar, largely regarded as the most rural-centric figure in the Democratic field, called for a boost to the ethanol mandate in a proposal released earlier this month. “Senator Klobuchar will work with the EPA to continue and strengthen the RFS,” the proposal says. “Continuing to increase the required blend levels will add value to farm products, reduce the use of fossil fuels, and contribute to better air quality.”

The Trump administration has dramatically increased the number of “small refinery exemptions,” which are authorized by law for petroleum refiners that demonstrate extreme hardship. Earlier this month, the EPA, in conjunction with the Energy and Agriculture Departments, approved 31 waivers, bringing the total number of waivers issued under Trump to 85. The Obama administration granted 23 waivers over its final three years.

Ethanol supporters say the exemptions are undercutting the 15-billion-gallon annual blending mandate by 1 billion gallons, nearly 7 percent of the mandate. The industry blames the exemptions for being, at minimum, partial contributors to a spate of recent plant closures.

Now, a bipartisan coalition of Midwestern House members is calling for a Government Accountability Office investigation into the exemptions. And some Democratic ethanol advocates are urging the presidential candidates to capitalize on rural resentment towards the waivers.

“It does have a little bit of that vibe of Trump believing he can shoot somebody in the middle of Fifth Avenue,” said Mike Carr, executive director of New Energy America. “It indicates that there’s a sense of a political opening there in farm country.”

The EPA, meanwhile, is dismissing the industry concerns, pointing to annually increasing ethanol exports. “There is zero evidence that EPA’s congressionally mandated small-refinery-exemption program, which provides regulatory relief to small refineries around the country, has had any negative impact on domestic corn ethanol producers,” EPA spokesman Michael Abboud said.

In 2016, Trump carried Iowa by nearly 10 points after the state had voted for Barack Obama in 2008 and 2012. But even Republican operatives are signaling potential ethanol-related trouble for Trump in 2020.

“It definitely raises concerns in the farm community, and it creates an opening if the farm economy tanks,” said Steve Grubbs, a Republican operative in Iowa. “If the farm economy is great through 2020, none of this comes up. But that’s a big ‘if,’ considering weather and trade war and the [small-refinery exemption] issue.”

This week, Mark Marquis—the president of Marquis Energy, an Illinois-based ethanol producer and lifelong Republican—pledged to vote for a Democrat over the exemptions.

And Democratic supporters are already laying the groundwork for the general, arguing that Trump’s policies are betraying the rural Americans who turned out in droves to support him.

“This flip-flopping on the exemptions and whether or not he’s really a supporter of ethanol and corn ethanol really exposes him as more of a carnival barker than a populist champion,” Link said.

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