Grassley: Trump’s Oval Office promises need action

Source: By Marc Heller, E&E News reporter • Posted: Sunday, December 1, 2019

The Senate’s top advocate for ethanol said that President Trump reiterated his support for biofuels in an Oval Office meeting last week but that the Trump administration’s rhetoric on the issue is a “broken record” that has yet to match its policies.

“There’s a great amount of legitimate doubt on the part of farmers” as EPA closes in on potential changes to the renewable fuel standard, said Sen. Chuck Grassley (R-Iowa.). The proposal aims to maintain biofuel mandates while allowing small refineries a way out of the requirements on an annual basis.

In a conference call today with agriculture reporters, Grassley said that he and other senators met with President Trump last Tuesday on a different issue — immigration — and that the president brought up biofuel policy. Administration officials at the meeting reassured lawmakers they’re committed to upholding the RFS and its minimum of 15 billion gallons of conventional ethanol annually, he said.

Grassley said Trump appeared committed to promises the White House made in mid-September, when officials said the threshold of 15 billion gallons would be upheld and EPA would change its approach to economic hardship exemptions for small refineries by reallocating waived gallons to other refiners.

“The president’s view was exactly as it was on Sept. 12,” Grassley said. “The president has not changed his mind at all.”

During the 20-minute meeting, Grassley said, EPA Administrator Andrew Wheeler joined by phone. Grassley said he told Wheeler that the way the proposed regulations have been written appears to maintain the minimum volume of 15 billion gallons. But farmers don’t have confidence in his agency, Grassley said he told Wheeler, and the proposal needs to be tweaked to reassure them.

“There’s going to have to be a few sentences changed here and there,” Grassley said.

Among the sticking points is EPA’s proposal to rely on Energy Department recommendations of RFS exemptions — and the biofuel volumes associated with them — rather than actual volumes waived when EPA issues the exemptions.

That approach, Grassley and biofuel groups say, risks miscalculating the waived volumes and means the 15 billion threshold might not be met.

The public comment period on EPA’s proposal ends Saturday.

One biofuel group, the American Coalition for Ethanol, said in comments submitted today that 85 small refinery exemptions issued from 2016 to 2018 eroded more than 4 million gallons from levels dictated in the RFS law.

Biofuel industry groups blame small refinery exemptions for undercutting demand for the fuel. They’ve said EPA’s proposal doesn’t match promises made by the White House and have warned that the agency’s proposed approach to the exemptions is a make-or-break issue that could cost the industry’s support.

Petroleum industry groups and some small fuel retailers take the opposite view, saying statistics from the U.S. Energy Information Administration don’t support the claim that demand for ethanol has declined. Biofuel mandates could disappear, they say, and demand for ethanol would remain solid because of its value as an octane booster.

“The misguided policy to reallocate exempt small refinery obligations punishes the companies already complying with a challenging RFS standard,” said Patrick Kelly, senior fuels policy adviser with the American Petroleum Institute, in comments submitted to EPA.

“Small refinery exemptions have not materially impacted the amount of ethanol produced or blended into the domestic gasoline pool according to EIA data. Reallocating these exemptions distorts the competitive marketplace and creates an unlevel playing field among competing refineries,” Kelly said.

Kelly called the proposal a “clear demonstration of a failed process and a broken government program.”