Score One for Corn: In Battle Over Biofuel, a Rare Setback for Big Oil

Source: By HIROKO TABUCHI, New York Times • Posted: Friday, December 1, 2017

Corn outside a silo in Paoli, Colo. The Trump administration will keep in place rules requiring refineries to blend biofuel — much of it ethanol made from corn — into the nation’s gasoline supply. Robert Nickelsberg/Getty Images

America’s cars run partly on fuels derived from corn and soy. That’s because of a decade-old federal mandate beloved by Midwestern farmers but opposed by an unusual coalition of oil refiners and environmentalists.

On Thursday, the Trump administration sided with the farmers and announced that it would stick closely to the current rules and quotas for fuel: Refineries must blend about 20 billion gallons of biofuel — much of it ethanol made from corn — into the nation’s gasoline supply, a level largely unchanged from last year.

The decision is a rare setback for the oil industry under a presidency that has filled its ranks with fossil fuel advocates and embarked on a rollback of rules aimed at reducing the industry’s regulatory obligations.

A number of environmental and health groups oppose the mandate, citing emerging research showing that ethanol is no cleaner than gasoline.

“Biofuels are not helping us environmentally,” said Jonathan Lewis, senior counsel at the Clean Air Task Force. “So the question is: What’s the value of the standard other than as a price support for agriculture?”

Oil refiners said they were disappointed at the continuance of a policy they have called “rigged.”

Such arguments appear to have been no match, however, for the sway held by corn farmers over President Trump, who promised Iowa farmers during the presidential primaries that he would retain the mandate. The Midwestern agricultural belt is an important part of his base.

The Renewable Fuel Standard, enacted in 2005 and significantly expanded two years later, requires that refiners blend an increasing amount of biofuel into gasoline nationwide. The program grew out of an effort by lawmakers to reduce the country’s reliance on oil, prop up its struggling corn and soy farmers and, in theory, rein in rising greenhouse gas emissions.

The mandate became a headache for some refiners, who struggled under a rule that forced them to buy credits to prove they had blended the ethanol and gasoline. So when Mr. Trump appointed the billionaire Carl C. Icahn, a majority investor in a Texas oil refiner, as special adviser on regulatory matters, expectations rose for a rule change.

Mr. Icahn quickly got to work behind the scenes, pressing the issue with Scott Pruitt, who would become administrator of the Environmental Protection Agency, as well as with Mr. Trump. The E.P.A. soon issued a request for public comment on possible changes to the mandate, including a reduction in biofuel quotas.

(Mr. Icahn later stepped down from his post after scrutiny from members of Congress about whether he was influencing regulations on ethanol to benefit his financial investments. He has now been subpoenaed by the Department of Justice over his efforts to overhaul the program.)

Unloading corn at the Mid-Missouri Energy ethanol plant in Malta Bend, Mo. Some recent research suggests that biofuels increase, rather than decrease, the country’s carbon dioxide output. Patrick Fallon/Bloomberg, Getty Images

Those moves incensed the biofuels industry and their allies in Congress. Senator Charles E. Grassley, Republican of Iowa, accused the Trump administration of a “bait and switch” scheme. In October, 38 senators urged Mr. Pruitt to back off from any changes. Gov. Kim Reynolds of Iowa called the president to plead her case.

“We commend the E.P.A. for laying to rest a year of attempts from a small group of oil refiners who have been using every trick in the book to change the established rules,” Emily Skor, chief executive of the ethanol industry group Growth Energy, said in a statement. “We are grateful to our allies in Congress and to Administrator Pruitt for working with us.”

Some recent research has shown that the predicted environmental benefits of biofuels are elusive, partly because a class of more advanced biofuels has not grown as expected.

Instead, most growth has been in corn ethanol and soy biodiesel, which has driven cultivation of both crops to record highs. Almost 40 percent of domestic corn, and almost 30 percent of domestic soy, now goes toward ethanol, according to Department of Agriculture data. Biofuels currently make up close to 10 percent of the gasoline used in the United States.

But that expansion has pushed crop production into grasslands and other previously uncultivated land, hurting biodiversity and reducing the land’s ability to store carbon, scientists warn. Bioenergy can also increase competition for land with food crops and livestock grazing.

A 2015 study by researchers at the University of Wisconsin-Madison found that between 2008 and 2012, more than 7 million acres of grassland and other uncultivated areas in the United States were converted to crop production, an area larger than the state of Massachusetts.

Moreover, some scientists have cast doubt on the very assumption underpinning the use of biofuels: that they do not raise levels of earth-warming gases in the atmosphere because the carbon dioxide the plants absorb when they grow offsets the carbon dioxide that is released when plant fuels are burned. A 2010 E.P.A. assessment of the program’s impacts estimated that the program would achieve 138 million metric tons in greenhouse gas emissions reductions by 2022.

A study published last year by researchers at the University of Michigan Energy Institute concluded that to date, biofuels had increased, rather than decreased, the country’s carbon dioxide emissions. The biofuels industry has disputed the study.

“The promise of better environmental benefits has completely failed,” said John M. DeCicco, a research professor at the institute who led the study and a former fellow at the Environmental Defense Fund. “There’s no doubt in my mind that the expansion we’ve seen so far has increased our greenhouse gas emissions.”

These fears differ from the oil industry’s complaints. Still, some environmental groups that had hoped that fossil fuel interests would have enough clout to convince the Trump administration to overhaul the mandate.

Instead, environmentalists are facing yet another defeat under Mr. Trump.

“We really thought Trump was going to do the right thing for the wrong reasons,” said Rose Garr, campaign director at Mighty Earth, an environmental group affiliated with the former Democratic Congressman Henry A. Waxman.

“Unfortunately, he didn’t even do that.”