Iowa biofuels groups to Trump: Rural Iowa won’t recover without full ethanol sales

Source: By Perry Beeman, Iowa Capital Dispatch • Posted: Wednesday, August 19, 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)

Four major Iowa agricultural groups on Tuesday sent President Donald Trump a letter thanking him for federal storm aid but contending that rural Iowa won’t recover if he lets small refineries sidestep required ethanol purchases.

Trump planned to visit Cedar Rapids late Tuesday morning to see damage from the Aug. 10 derecho storm that killed three Iowans. The wind storm caused an estimated $4 billion in damage to crops, homes, buildings and infrastructure. 

Leaders from the Iowa Corn Growers Association, the Iowa Soybean Association, Iowa Renewable Fuels Association and the Iowa Biodiesel Board sent Trump a joint letter repeating their contention that if he grants waivers to small refineries who argue it’s a financial hardship to have to blend ethanol, the nation won’t reach its goal of requiring the blending of 15 billion gallons of ethanol per year for ethanol purchases. That in turn will cost jobs and hurt Midwestern economies, they said. 

“Make no mistake, we often hear from farmers: ‘If we can’t trust the Trump Administration to do the right thing before the election, then why on Earth would we expect them to treat us fairly after the election?’ ” the letter read. “Many rural voters are waiting to see if you will uphold the (Renewable Fuel Standard) and your promise before the election. Iowa may very well hang in the balance.”

The organizations noted that a drop in exports during the trade war with China and the COVID-19 pandemic have hurt the financial outlook in Iowa and other farm states, some of which are coping with crop damage from the derecho storm.

High winds appear to have damaged approximately 14 million acres of crops in Iowa. The state may lose one-third to one-half of its expected yield.

Gov. Kim Reynolds asked the federal government for $3.99 billion in aid, and Trump on Monday tweeted that he had “just approved (and fast) the FULL Emergency Declaration for the Great State of Iowa.” However, federal officials later said the president only approved part of the package and that work on approving the rest continues. 

“While we are appreciative of the disaster aid, rural Iowa will not complete the long road back to normal without robust and stable markets for our crops and biofuels,” the groups wrote.

The letter chastised the president for failing to ensure the nation meets the goal of blending 15 billion gallons of ethanol per year. (The groups have repeatedly thanked Trump for clearing the way for year-round sales E15 ethanol.)

“One senior White House official has even told us that the 15-billion-gallon conventional level for the RFS was “biblical” to you. Yet, the fact of the matter is that the RFS has not actually been enforced at the statutory levels during the four years of your presidency,” the letter continued.

The commodity organizations said demand for ethanol has been hurt by “dozens and dozens” of “illegal” exemptions for oil refineries. 

U.S. Sens. Chuck Grassley and Joni Ernst, both Iowa Republicans, have pushed the administration to give federal pandemic relief funds to the biofuels industry, but not to oil interests. 

The biofuels groups said exemptions have cut biofuels demand by 4 billion gallons, in turn reducing demand for corn and soybeans.

“Now, the (U.S. Environmental Protection Agency) is considering a plan to double-down on efforts to undermine the RFS with retroactive handouts that would allow multi-billion-dollar oil companies to claim ‘hardship’ exemptions from obligations dating as far back as 2011,” the groups said. “Mr. President, you have the power to immediately end the frustration of farmers related to biofuels and to remove all doubt of your commitment to the (Renewable Fuel Standard).”

Trump should order EPA Administrator Andrew Wheeler to reject 60 waiver applications currently pending, the groups concluded.