Ethanol losing the information war on capitol hill

Source: By John Siciliano and Jos Siegel, Washington Examiner • Posted: Tuesday, April 9, 2019

A week spent lobbying on Capitol Hill left a major ethanol coalition dismayed by lawmakers’ lack of understanding of the problems facing the industry.

One of the biggest shockers for the ethanol lobby was that lawmakers, primarily Republicans, thought that President Trump’s plan to allow for higher blends of ethanol to be sold year-round was a done deal.

“For a lot of lawmakers, they thought the E15 [15-percent ethanol blend] issue was sort of dealt with already,” Brian Jennings, president and CEO of the American Coalition for Ethanol, told John. He said that they heard a lot of: “It’s already taken care for you, right?”

The problem with that perception is that it isn’t taken care of — far from it — despite Trump making it a key part of his agenda in 2019.

In fact, the proposed rule at the Environmental Protection Agency to lift restrictions on E15 ethanol fuel blends has only just begun to work its way through the administrative process, with the oil industry already threatening to sue if it’s approved.

Jennings and his members were on the Hill last week with the intent of getting lawmakers up to speed with the significant problems they have with the pending EPA ethanol plan. However, the feedback they received from members means they have to rethink their lobbying and education campaigns.

Jennings said he and his members had to spend time clarifying that “no, it’s not taken care of for us,” and then go into the details of the EPA rule, which would actually do the opposite of Trump’s intended result by restricting sales of E15.

There are four or five pieces to the E15 rule. The only part of the proposal the ethanol industry favors is the piece that removes the Reid vapor pressure restrictions for using higher blends in the summer, instead of just the fall, winter, and part of the spring. The U.S. consumes the most gasoline in summer, and allowing E15 to be sold in the summer would open up a huge market for the industry.

Jennings was also disappointed in lawmakers’ understanding of the EPA refinery exemption program, which is separate to the E15 rule, but even just as problematic and damaging to the industry, he explained.

Since the beginning of Trump’s presidency, EPA has granted waivers to dozens of oil refineries to free them from blending ethanol into the gasoline supply as required by the law and EPA’s renewable fuel program. The ethanol industry argues that the exemptions constitute “demand destruction” for their product, and are currently suing the EPA over its use of the exemptions.

The exemptions have faced pushback from Republican Sens. Chuck Grassley and Joni Ernst of Iowa, but outside of them and a few others, most lawmakers on Capitol Hill aren’t as attuned to the problem, according to Jennings and his group.

Part of the problem is the complexity of the EPA renewable fuel program, or Renewable Fuel Standard, and lawmakers having a hard time keeping track of the problems it and the ethanol industry faces, says Jennings.

Ron Lamberty, vice president for policy for the coalition, told John that some lawmakers and Hill staff are still hung up over ethanol subsidies, not realizing that the primary blending tax credit that they are concerned about was repealed almost a decade ago.

Another issue that confuses lawmakers is the issue of ethanol credits, known as RINs, which are a major piece of the EPA rule for blending more E15.

The RIN changes in the E15 rule would actually undermine the sale of more 15-percent ethanol blends, and are primarily beneficial to refiners. But the subject is one of the most confusing for lawmakers to understand, said Lamberty.

“The RINs thing just confuses way too many, we’ve got to find a way to simplify that,” he said.

He added that many were surprised that there were several other pieces to the Trump E15 regulation, and that the ethanol industry finds most of the rule “troublesome.”