Biofuels Industry May Have the Juice to Endure to Trump’s EPA Chief Pick

Source: By Chuck McCutcheon, Scientific American • Posted: Monday, December 12, 2016

Many industries are delighted by President-elect Donald Trump’s choice of Oklahoma Attorney General Scott Pruitt, a leader in the GOP fight against the Clean Power Plan, to head the U.S. Environmental Protection Agency. But one industry group—ethanol producers—is noting Pruitt’s past differences with Trump on another hot-button EPA issue: the law that mandates the use of the crop-based gasoline additive.

The Renewable Fuel Standard (RFS) program, which then-President George W. Bush signed into law in 2007, requires energy companies to blend ethanol and biodiesel into gasoline and diesel fuel to reduce greenhouse gas emissions and reliance on oil imports, while helping rural farmers. Corn growers and their allies have pressed to have as much biofuel as possible blended into fuels but the oil industry has complained that the program drives up its costs and should be repealed.

As attorney general, Pruitt in 2013 filed a friend of the court brief with the U.S. Supreme Court in which he argued the EPA ignored the risks that gasoline with more than 10 percent ethanol can pose to cars’ fuel systems as well as the RFS requirement’s possible effect on food prices. “The evidence is clear that the current ethanol fuel mandate is unworkable,” Pruitt said in a statement issued at the time.

Pruitt will likely seek to move quickly to end the Obama administration’s Clean Power Plan, which requires major cuts in carbon dioxide emissions for coal-fired power plants. It was supposed to take effect this year but was blocked by lawsuits filed by Pruitt and a coalition of groups in 26 states. Ethanol advocates, however, do not seem to worry that Pruitt will make similar waves involving their issue, given apparent support for biofuels from Trump and others. In fact, one energy expert said that in the long term Pruitt could actually be in a position to help move the RFS program away from the agriculture-versus-oil conflicts that have long bedeviled it.

Unlike the case with other recent environmental policies that many Republicans dislike, Trump cannot overturn the Clean Power Plan via the Congressional Review Act—a powerful 1996 law giving Congress 60 legislative days to override agency actions (without burdening the Senate to round up 60 votes in opposition, as is the case with almost all legislation). The U.S. Court of Appeals for the District of Columbia Circuit heard arguments on the Clean Power Plan challenge in September and is expected to issue an opinion sometime next year.

If the court makes no decision on halting the Clean Power Plan before Trump’s inauguration, his administration could ask it to issue a “voluntary remand”—a procedure under which a Pruitt-led EPA could go back and revise the power-plant emissions rule to address industries’ concerns that the plan amounts to a massive government overreach. A new version of the plan then would be put through a formal EPA rulemaking process, with the agency having to justify its change in position from the Obama era. “Agencies are permitted to change their mind, regularly do so, and at least in theory receive the same deference from courts that they do when making rules from scratch,” wrote Nathan Richardson, a visiting fellow at the conservation group Resources for the Future, in a recent blog post. “The Trump EPA would have to acknowledge the change in position and provide reasons, but courts would defer to the agency’s technical judgment and (to some extent) reading of the law. This new [EPA] rulemaking process would take months, possibly years.”

If the Circuit Court rules against the Clean Power Plan, Trump could decline to appeal the decision to the Supreme Court—although environmental groups and other interested parties would probably do so. “If, by the time the case gets to the Supreme Court, there is a Trump-appointed justice sitting on it, the odds of the [current Clean Power Plant rule] surviving there do not inspire confidence,” says Michael Gerrard, an environmental law professor at Columbia Law School who directs the Sabin Center for Climate Change Law.

Reacting to Pruitt’s nomination as EPA chief this week, Brian Jennings—executive vice president with the American Coalition for Ethanol—told an industry publication he was “disappointed” with the attorney general’s criticism of RFS and that Pruitt’s record was “cause for concern.” Jennings also noted, however, that Trump has gone on record in supporting ethanol because it fits with the president-elect’s theme of achieving energy independence (although Trump also has listened to some powerful oil industry voices critical of some parts of the RFS).

Jennings predicted that senators will “forcefully educate” Pruitt during the confirmation process—something veteran Sen. Chuck Grassley (R–Iowa) has already promised as well. “I look forward to working with the president-elect and his nominees to continue the success of domestic biofuels,” Grassley—whose corn-producing key primary state is particularly bullish on the RFS—told Scientific American. “If needed, I’ll be glad to explain the many benefits of biofuels to U.S. economic and national security, energy independence and American job growth.”

Outgoing U.S. Department of Agriculture Secretary Tom Vilsack, another Iowan, recently predicted it would be “very difficult” to repeal the RFS, given the jobs and infrastructure that have been set up to support it in rural states. “The Renewable Fuel Standard is solid,” he told in November.

The RFS requires the EPA to conduct annual rule-making sessions that set requirements for renewable-fuel usage. The agency has already finalized the 2017 requirements, which take effect January 1. “It would be very hard to go backwards on that—they would first need to withdraw and re-propose, and by the time everything is resolved, the year would be more or less over,” says James Stock, a Harvard University economics professor who served on the White House Council of Economic Advisers from February 2013 to July 2014.

Stock says the debate between agriculture and oil interests over ethanol has been needlessly divisive, and that the EPA under Pruitt should instead turn its focus to “second-generation” biofuels that do not provoke such bitter fights. In particular, he says Trump’s administration now has an opportunity to place a greater emphasis on cellulosic ethanol, which is produced from grasses, wood, algae and other less-traditional fuel plants grown and refined domestically. The oil industry has resisted attempts to use the RFS to promote these second-generation fuels, worried about how they might compete with its products. But Stock noted that Bush in 2006 called for fostering technologies that could make cellulosic ethanol competitive with corn-based ethanol within six years. Embracing that earlier “Republican vision,” he says, fits with Trump’s goals of creating more jobs in rural America while enhancing energy security—and it would lower carbon emissions as well.