Ernst, Grassley join flared-up fight over ethanol

Source: By Capitol Dispatch • Posted: Monday, June 29, 2020

ethanol plant
A flag flies at the Southeast Iowa Renewable Energy ethanol facility prior to a visit from President Donald Trump on June 11, 2019, in Council Bluffs, Iowa. With 4.35 billion gallons produced in 2018, Iowa leads the nation in ethanol production. (Photo by Scott Olson/Getty Images)

Backers of Iowa’s ethanol industry are fighting a federal government effort to exempt more small refineries from buying the corn-based fuel while also pushing Congress to offer pandemic-related aid. 

U.S. Sens. Joni Ernst and Chuck Grassley, both Iowa Republicans, joined Democratic Sens. Amy Klobuchar of Minnesota and Tammy Duckworth of Illinois and 12 other senators in a letter to the U.S. Environmental Protection Agency opposing 52 new exemption requests. 

Small refineries have asked for new exemptions retroactive to as far back as 2011, arguing that the requirement that they blend ethanol into gasoline was too much of a financial burden. 

Ethanol is primarily made of corn. Iowa is the nation’s top producer of the grain.

Ernst is holding up a political appointment to make her point. As part of her work on the Senate Environment and Public Works Committee, which oversees EPA, Ernst is opposing deputy administrator nominee Doug Benevento, in effect blocking the nomination. 

Ernst publicly criticized EPA Administrator Scott Pruitt in June 2018 before he was ousted, contending he was “about as swampy as you get here” and had broken promises to farmers. She held up an EPA air office nominee until Pruitt said in writing he would not reduce the amount of ethanol refiners are required to blend. 

Ernst’s Democratic opponent, Theresa Greenfield, called on Monday for Wheeler to resign. Greenfield has been hitting Ernst in radio ads for voting to confirm Wheeler in February 2019.

Court blocked EPA exemptions

The latest battle is over new exemption requests filed with EPA not long after the 10th Circuit Court of Appeals ruled the agency had overstepped its authority in granting previous exemptions. 

“Iowa’s hard-working ethanol and biodiesel producers are sick of being yanked around by (EPA Administrator) Andrew Wheeler and the EPA. Our producers need certainty; until we get that, no EPA nominee is getting my vote,” Ernst said in a statement. 

In their letter, the senators asked Wheeler to reject the petition requesting exemptions.

“We urge you to reject these petitions outright … These petitions should not even be entertained because they are inconsistent with the 10th Circuit decision, congressional intent, the EPA’s own guidance, and – most importantly – the interests of farmers and rural communities who rely on the biofuel industry,” the senators wrote.

The exemptions “would only worsen the unprecedented economic challenges facing the biofuels industry and the rural communities that it supports,” the senators added.

The 52 new exemptions would cover “gap years.” The refineries are asking for exemptions even though the law was intended to only offer them for a year or two, and the refineries can’t get them if they haven’t renewed them continuously, Monte Shaw, executive director of the Iowa Renewable Fuels Association said in an interview.  

The exemptions would worsen an already cloudy future for ethanol plants, Shaw said.

Iowa’s ethanol plants were operating at about half capacity six weeks ago but now are 15% to 20% below normal. Even that level ranks as the lowest production of the past 20 years, Shaw said.