Biofuel groups to Trump: Save us from Pruitt

Source: Marc Heller, E&E News reporter • Posted: Friday, October 6, 2017

As recently as June, President Trump told ethanol supporters in Iowa he was saving their companies, just as he’d promised in his campaign.

“And believe me,” Trump said in a speech at a community college, “they’re under siege.”

Four months later, ethanol advocates say the currents are indeed running against them — stirred by a Trump administration that has made them a low priority.

A series of moves, or rumored moves, by U.S. EPA in the past few months have gone against the growth of renewable fuels.

The agency has twice raised the idea of scaling back required biofuel volumes for 2018 and 2019 under the renewable fuel standard — the first time in July, then again last month.

It has proposed allowing biofuel that’s exported to count toward renewable fuel targets, which would save refiners money on renewable fuel credits.

Those moves followed reports that earlier in the year, the administration was ready to make fuel blenders, rather than refiners, responsible for meeting the renewable fuel standard — a switch in the “point of obligation” that most biofuel groups don’t support.

“Everything that’s come out of EPA in the last couple of months suggests they’re going to pare back on the RFS,” said Roger Johnson, president of the National Farmers Union, which has stepped up its efforts on biofuel in recent weeks.

“Is the president going to keep his promise or not?” Johnson said.

The NFU and other groups that favor mandates on biofuel — including corn ethanol, used cooking oil, and biodiesel and advanced biofuels — are pushing the White House to switch course to a more biofuel-friendly stance.

Today, the National Biodiesel Board ran a full-page ad in The Washington Post, claiming EPA Administrator Scott Pruitt is working against rural America.

“Mr. President: please stop him,” the ad implores in a headline.

Eleven pro-biofuel groups joined on a letter to President Trump on Tuesday, including the NFU, the Renewable Fuels Association and the National Biodiesel Board.

“The proposed changes are inconsistent with the law and threaten the growth and prosperity of the U.S. biofuels industry,” the groups said.

Sen. Chuck Grassley (R-Iowa), one of the Senate’s leading advocates for biofuels, criticized EPA’s moves in a speech on the Senate floor.

And Grassley reminded listeners — as ethanol advocates do each time EPA seems to move against them — that Trump himself has said he supports the renewable fuel standard (Greenwire, Sept. 29).

Petroleum industry representatives say ethanol supporters are missing the point of EPA’s moves — that renewable fuel providers may not be able to meet higher requirements and that biodiesel, for instance, is expensive. Furthermore, they argue ethanol supporters’ complaints about the proposal on exports doesn’t mesh with the industry’s own support for selling to other countries.

“EPA is absolutely doing the right thing by standing up for U.S. jobs and consumers and taking a harder look at whether domestic production can meet increasingly aggressive biofuel mandates,” said Chet Thompson, president and CEO of the American Fuel & Petrochemical Manufacturers, in a statement. “We’re confident that when the full facts are known, it will be clear that letting domestic production guide the mandate is the best policy for American workers.”

Other gas and oil industry advocates have pointed to ethanol boosters’ own words.

RFA President and CEO Bob Dinneen cheered a strong biofuel export report in February on the group’s website, saying, “While we continue to meet our domestic needs, ethanol exports are essential for future growth.”

A refining industry lobbyist told E&E News yesterday that EPA is responding to the high cost of renewable fuel credits, which has hurt merchant refiners. Most recently, Philadelphia Energy Solutions Inc. blamed high renewable fuel credit prices for layoffs at its refinery in Pennsylvania. It’s not alone. The industry as a whole has complained about the credits — called Renewable Identification Numbers — becoming a much heftier expense than Congress anticipated when it enacted the RFS in 2005 and revised it two years later.

“The president also made a campaign promise to protect U.S. manufacturing jobs,” the lobbyist said.

The cost to refiners made headlines when one of Trump’s advisers on paring back regulations, Carl Icahn, took a big role in advocating for changes to the RFS. Icahn is majority owner in a refining company, CVR Energy Inc.

Johnson said he thinks Icahn’s influence may still be playing into EPA’s moves, even though he has resigned from any role with the administration.

Ethanol advocates say they never counted on Pruitt to be a forceful supporter. As Oklahoma’s attorney general, he came from a state focused more on the oil industry, and he had challenged aspects of the RFS. But he also told lawmakers during his confirmation process he would uphold the RFS law, and ethanol supporters said they figured he wouldn’t go against the president.

Emily Skor, CEO at Growth Energy, representing ethanol companies, said EPA’s stance will evolve as more high-ranking positions are filled in the relatively new administration. She said she doesn’t feel like advocates are being shut out, although she agreed with Johnson’s observation that officials seem to listen — then do the opposite of what ethanol supporters ask.

“We’ve been maintaining a conversation from the start,” said Skor, who’s counting on Trump and Agriculture Secretary Sonny Perdue to be sympathetic to the industry. “We’re confident we have a champion in the administration.”

A bigger challenge is just a few years down the road. The RFS expires in 2022, at which point EPA is supposed to set renewable fuel volumes without dictates from Congress. Lawmakers haven’t given the agency much guidance, the refining industry lobbyist said.

“The program itself, it’s very questionable what it’s going to look like going forward,” he said.