Op-Ed: Mike Naig: It’s time for the Trump administration to keep promises on biofuels

Source: By Mike Naig, Des Moines Register • Posted: Thursday, December 13, 2018

The EPA is still putting barriers up that stifle demand for biofuels, leading to sales of ethanol plants and jeopardizing jobs.

For American farmers and biofuel producers who turn grains into renewable energy, President Trump’s promise to lift restrictions on the sale of ethanol holds enormous economic promise.

For years, the Environmental Protection Agency (EPA) refused to update obsolete regulations on summer fuels blends, effectively barring the sale of E15 from June to September each year. A fix will allow consumers to pick a lower-cost blend of 15 percent ethanol all year long. It will also allow U.S. farmers to sell more grain, which is vital in a market where farm income has fallen by half over the last five years.

However, our leaders in Washington must keep the big picture in mind. E15 provides a major opportunity for long-term, rural growth. But efforts to revitalize rural growth cannot stop there. Too many farm-state businesses have been hammered by artificial barriers standing between American-made biofuels and customers around the world.

Additionally, late last week the EPA released the renewable volume obligation targets for 2019 under the Renewable Fuel Standard (RFS). While I’m encouraged to see the EPA maintaining a 15 billion gallon commitment to conventional biofuels (corn ethanol) and over 400 million gallons of cellulosic biofuels, there remain billions of lost gallons due to excessive small refinery exemptions. The EPA must follow the current law and reallocate these lost gallons; thereby ensuring ethanol targets set by Congress are actually met.

The last EPA administrator granted 48 so-called “hardship” waivers, exempting some of the nation’s most profitable oil refineries from the RFS, effectively eliminating demand for 2.25 billion gallons of homegrown biofuel. At the same time, Chinese tariffs have decimated America’s second-largest export market for ethanol.

As a result of these unnecessary headwinds, many of America’s largest biofuel producers are selling plants, idling production, and reducing investments. Green Plains sold plants in Iowa, Michigan, and Indiana, shuttered one in Virginia, and idled production in Iowa, Nebraska, Illinois, and Minnesota. Pacific Ethanol cut production by 10 percent, potentially impacting plants in California, Illinois, Nebraska, Idaho, and Oregon. Smaller producers have been hit, too. Conestoga halted production at their Texas plant, and Ergon is closing a plant in Mississippi.

There are more than 200 ethanol plants across the heartland, and each one serves as a pillar of economic productivity. They provide rural manufacturing jobs and a key market for Iowa farmers. To protect those farm families, policymakers in Washington must heal the self-inflicted wounds that have restricted demand for U.S. biofuels.

Fortunately, there are steps we can take right now to restore agricultural and bioenergy demand at home and abroad. That starts with putting the RFS back on track at the EPA, reopening foreign markets, particularly China, and following through on the president’s promise to ensure that E15 can be sold all year — before the start of the summer driving season in June.

There’s no reason we can’t accomplish these goals. The White House has made support for homegrown biofuels a core element of its promise to rural communities, on and off the campaign trail. The same is true for our lawmakers in Congress, including Sens. Chuck Grassley and Joni Ernst, who have fought and won countless battles to protect farmers and the industries that keep Iowa strong.

With the election season behind us, it’s time to roll up our collective sleeves and double down on the push for immediate action.

Mike Naig is the Iowa secretary of agriculture.