Iowa leaders: Trump waivers for big oil would be ‘devastating blow’ for ethanol, farmers

Source: By Donnelle Eller, Des Moines Register • Posted: Monday, January 18, 2021

Midwest congressional leaders worry the outgoing Trump administration will sign off on oil company waivers that dampen demand for ethanol, biodiesel and other renewable fuels.

Iowa is the nation’s largest ethanol and biodiesel producer, and Iowa-grown corn and soybeans are a major raw ingredient in the fuels. Iowa’s U.S. Sens. Chuck Grassley and Joni Ernst were among those saying in a letter Thursday to Environmental Protection Agency Administrator Andrew Wheeler that the move would be “a devastating blow to biofuel producers and the farmers who sell to them.”

The Reuters news service, citing unnamed sources, reported this week that the EPA in the waning days of the Trump administration is expected to grant waivers to some oil refiners, exempting them from meeting renewable fuel blending requirements.

Farm and renewable fuel groups have battled the oil industry in recent years to stop its efforts to escape the requirement under the Renewable Fuel Standard. Almost all U.S. gasoline is blended with 10% ethanol under the mandate.

Grassley and Ernst along with five other Midwestern Republican senators urged Wheeler to refrain from making a decision on the small refinery waivers, which are being challenged in the U.S. Supreme Court.

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Twenty-three U.S. representatives from both parties, including Iowa Democrat Cindy Axne and Republicans Randy Feenstra and Ashley Hinson, sent a similar letter Wednesday to Trump, saying the exemptions “will further devastate America’s rural communities as they continue to struggle amidst a difficult economy.”

“These exemptions, coming on top of 85 waivers already granted by EPA over the past four years, would also cause immense and unnecessary strain to businesses that are desperately trying to keep workers on the payroll,” the representatives wrote.

Prices for gasoline, ethanol and other fuel plummeted last year as states shut down businesses, schools and other organizations to prevent the spread of the coronavirus, greatly reducing commuting and other travel.

Reuters said the EPA announcement could come as early as this week and would apply to some exemptions for the 2019 compliance year. There are currently 32 pending petitions for that period, according to the EPA’s website.

Iowa Gov. Kim Reynolds tweeted Thursday that the White House should respond swiftly to any last-minute EPA action on waivers. “This move weakens ethanol demand, hurting farmers, the biofuel industry, and the entire farm economy,” her message said.

Seventy percent of Iowans voted for Trump in the November election. And, many farmers have continued to support the president, despite concern about the administration’s mixed action on biofuels as well as trade tariffs that caused exports of corn, soybeans, pork and beef to plummet.

The administration provided a record $46.5 billion to U.S. farmers last year to offset losses tied to trade disruptions, the coronavirus, drought and other natural disasters. The payments represented about 39% of U.S. farm net income last year.

“Ethanol and biodiesel plants that are already struggling to cope with the economic fallout of the COVID-19 pandemic are at risk of closing their doors, cutting off key markets for farmers,” the senators wrote in their letter to Wheeler. “Many biofuel plants have already been forced to shutter their doors over the past four years. Eliminating more demand for biofuels at this time may be the death knell for many more.”

In October, the EPA said it would reject dozens of hardship waiver requests from oil refiners after Trump received multiple requests from Iowa lawmakers to stop the exemptions and renewable fuels groups warned he risked losing rural voters.

That decision was a reversal by the administration. Since 2016, Trump’s EPA had approved nearly 90 small refinery exemptions that the ethanol industry says has cut demand for 4 billion gallons of ethanol and biodiesel the oil industry was required to blend into the nation’s fuel supply.

The EPA made the decision after the 10th Circuit Court of Appeals ruled that the agency had “exceeded its authority in granting” certain exemptions. The court said that small refinery waivers awarded after 2010 could be approved only as extensions of pre-existing waivers.

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But most recipients of waivers in recent years have not continuously received them, and refiners sent in retroactive waiver applications to come into compliance with the court ruling.

The Supreme Court this month agreed to review that ruling after an appeal from refining companies that argued the 10th Circuit Court’s decision had improperly deprived them of a congressionally approved method of avoiding financial hardship.

Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at or 515-284-8457