Lawmakers, groups slam EPA ethanol plan

Source: By Marc Heller, E&E News reporter • Posted: Thursday, October 17, 2019

The Senate’s top advocate for biofuels yesterday rejected EPA’s latest proposal to maintain nationwide ethanol volumes, saying the agency failed to deliver on President Trump’s promises to corn farmers.

Sen. Chuck Grassley (R-Iowa) told reporters he won’t accept anything less than Trump’s promise earlier this month to offset biofuel waivers granted to small refineries by increasing mandates on others.

“I heard the president, the vice president, the secretary of Agriculture, the EPA director, six senators and the governor of Iowa say that we are going to be able to recoup and add back in the lost gallons that come from waivers,” Grassley said. “That’s what I’m expecting, that’s what we were promised, and EPA ought to carry out the Oval Office policy.”

At issue are exemptions from biofuel blending requirements under the renewable fuel standard, which allow small refineries to skip the mandate if it would otherwise cause disproportionate economic harm. The administration has awarded several dozen exemptions since taking office, sparking criticism from ethanol advocates that EPA is undermining the RFS.

Weighing those complaints against refiners’ interests, EPA said it would allow partial exemptions for the first time and try to predict the amount of gasoline and diesel to be exempted for the coming year — and use that projection in determining renewable fuel percentages.

In effect, the agency said, the proposal would allow for exemptions without sacrificing the minimum volumes of biofuel required under the RFS law.

That’s different from what groups were promised earlier this month and wouldn’t necessarily ensure an offset in line with actual conditions, according to lawmakers and biofuel groups.

Grassley wasn’t alone in criticizing the proposal. The chilly response from Capitol Hill contrasted with positive reactions some of the same lawmakers had after the initial announcement earlier this month.

One of those was Sen. Deb Fischer (R-Neb.), whom EPA quoted in its news release Tuesday as praising the earlier announcement. When the detailed proposal emerged, Fischer’s enthusiasm didn’t match the administration’s release.

Saying she was disappointed, Fischer added, “This is different than what we expected based on our previous conversations with the administration.”

‘Not surprising’

Pro-ethanol Democrats in Congress, already highly critical of Trump, used stronger language.

Rep. Cindy Axne (D-Iowa) called the proposal “insulting, deeply disappointing, but unfortunately, not surprising,” noting the administration’s mixed record on advancing biofuels.

Rep. Dave Loebsack (D-Iowa) said, “It is outrageous that not even two weeks after the President and the EPA announced a ‘deal’ to offset the excessive number of SREs [small refinery exemptions] they granted to big, profitable oil companies, they fall back on their word.”

In its proposal, which will be open for 30 days of public comment, EPA said it recognizes that projecting SREs before they’re actually issued involves uncertainty. The projection would be based on the Department of Energy’s recommendations for exemptions over the past three years.

Criticism came from the other side of the issue, as well. Sen. James Lankford (R-Okla.) said the proposal would mean bigger biofuel blending requirements for refineries that don’t receive exemptions.

“Despite the possibility that small refiners will get waivers from the Standard, the cost of compliance will likely go up for everyone else trying to provide fuel to American consumers — a cost that will surely be passed down to the consumer,” Lankford said in a statement.

“As I have said many times, if the market demands higher biofuel blends, our producers can supply it,” he said, “but we should not require biofuels to be blended, since it will ultimately increase gas prices for Oklahomans.”

Industry groups on both sides of biofuel policy criticized the proposal, for different reasons.

Groups representing refiners, gas stations and unionized refinery workers said EPA can’t legally grant partial exemptions, and they said any increase in biofuel volume requirements would likely come from imports.

In Iowa, ethanol and biodiesel advocates said the administration had broken a promise. The executive director of the Iowa Renewable Fuels Association, Monte Shaw, said in a conference call with reporters that officials had told his organization and others that EPA would base future biofuel volumes in part on a rolling average of actual exemptions issued, rather than relying on the DOE analysis called for in the proposal.

Using past exemptions issued, Shaw said, was “the absolute key we needed to get behind that deal.”