Biofuels’ New Deal

Source: By Chris Clayton, Progressive Farmer • Posted: Sunday, October 6, 2019

Trump Administration Details Plan to Restore RFS Volume Levels

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the most important aspect of EPA’s proposal is that it will restore the RFS volumes by factoring in small-refinery exemptions into the annual volume blends.

“At the end of the day, we want 15 billion gallons to be 15 billion gallons,” Shaw said.

Shaw said the proposal amounts to “a tourniquet to stop the bleeding” of demand volumes that have hurt the biofuels industry and caused both ethanol and biodiesel plants to close, idle or reduce production.

“What the proposal does is it puts on a tourniquet to stop the bleeding,” Shaw said. “Do we need a blood transfusion to feel better? Yes we do. There are some other parts of the proposal that starts a blood transfusion, to continue the analogy. But if you don’t stop the bleeding, nothing else matters. This proposal stops the bleeding.”

As of the end of September, at least 18 ethanol plants had idled production with many more cutting back. The biodiesel industry has seen nine plants close, and others cut production, as well.

In praising the announcement, Geoff Cooper, president and CEO of the Renewable Fuels Association, said Friday’s announcement “marks the beginning — not the end — of an EPA regulatory process and much work needs to be done.”

Along with the praise from the biofuels industry and farm groups, the American Petroleum Institute criticized the plan.

“The administration’s decision to raise the ethanol mandate is a rushed and arbitrary action that puts American drivers at risk with little, if any, benefit to farmers,” the group stated.

U.S. Sen. Charles Grassley, R-Iowa, told reporters Friday that the proposal outlined by the president and EPA is exactly the way the RFS was meant to function.

“It sets us on a plan to blend more ethanol.”

He added that the plan was basically agreed to at a meeting Sept. 12 at the White House, but finally detailed on paper by EPA.

“These are promises made and promises kept by President Trump,” Grassley said. “President Trump has made it clear he is an ally of corn and soybean farmers, as well as ethanol and biodiesel producers.”

The White House also announced on Friday that Vice President Mike Pence will visit Iowa next week.

Countering Grassley was fellow Republican, Sen. John Barrasso, R-Wyo., chairman of the Senate Environment and Public Works Committee, who said any plan to transfer small-refinery obligations to other refiners “will do more harm than good.”

“No one should be surprised if it leads to closed refineries, lost jobs, and higher fuel prices,” Barrasso said. “Refineries — both large and small — employ millions of Americans nationwide. In my home state of Wyoming alone, refineries employ thousands. This proposal risks mass layoffs and higher gasoline and diesel prices. It’s not a winning strategy for American workers or our nation’s economy.”

On a press call Friday, EPA officials were asked why farmers should believe the agency will live up to the RFS levels set by Congress. An EPA official stated the agency is accepting comments on its proposal and will blend 15 billion gallons in 2020.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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