Senators Seek RFS Freeze

Source: By Chris Clayton, DTN Ag Policy Editor • Posted: Thursday, October 22, 2020

In Close Election, GOP Senators’ Request to EPA Undermines Colleague in Tight Race

Ethanol remains a major political issue in the final weeks leading up to the election. Still, a group of 15 GOP senators from oil-producing states wrote EPA Administrator Andrew Wheeler on Wednesday asking for a complete freeze on higher ethanol blend volumes for 2021. (DTN file photo by Chris Clayton)
Ethanol remains a major political issue in the final weeks leading up to the election. Still, a group of 15 GOP senators from oil-producing states wrote EPA Administrator Andrew Wheeler on Wednesday asking for a complete freeze on higher ethanol blend volumes for 2021. (DTN file photo by Chris Clayton)

OMAHA (DTN) — Amid the politics in the Midwest over ethanol, a group of 15 Republican senators on Wednesday wrote EPA Administrator Andrew Wheeler calling for an overall freeze of the Renewable Fuels Standard obligations for 2021.

The senators, largely from oil-producing states, advocate for a freeze in the RFS while one of their GOP colleagues, Sen. Joni Ernst of Iowa, is locked in a tight campaign battle in which her Democratic opponent has claimed Ernst’s support for Wheeler’s confirmation has greatly damaged the RFS.

The GOP senators wrote Wheeler asking him to use his authority under the Clean Air Act to cite “severe economic harm” and grant a general waiver to freeze the Renewable Volume Obligation (RVO) for 2021.

The senators argue COVID-19 has led to “the unprecedented collapse in demand for gasoline, diesel and jet fuel,” and “any increase in the mandate would cause severe and outsized economic harm next year by raising the costs for consumers, particularly at the gas pump.”

EPA should have released a proposal for the 2021 RVO by now, but EPA has delayed that decision and it likely now will not come until after the Nov. 3 election.

The senators also implied boosting ethanol use in 2021 would risk damage to vehicles and infrastructure by keeping ethanol blends below 10%. This runs counter to the year-round 15% ethanol blend approved by the Trump administration and an executive order from President Donald Trump allowing states to blend 15% ethanol in standard fuel pumps.

Adding to that, the senators’ letter also stated any boost in the 2021 biofuel blend volumes would force consumers to pay higher prices, “creating another drag on the national economy that is in a state of fragile recovery from the depths of the pandemic.” The senators argue that any burden on fuel demand should be shared by petroleum and biofuel producers.

“Simply put, EPA must not mandate blending too much biofuel into a dwindling fuel supply,” the senators wrote. “Ethanol producers and refiners should proportionally share the economic hardships associated with the current declines in fuel demand, rather than having government mandates shift the burdens of the former onto the latter.”

The senators wrote that freezing the RVO would “ensure refiners and retailers can continue to provide American consumers with affordable fuels that are safe for their vehicles and specialized tools, as well as prevent damage to fueling infrastructure” by freezing the ethanol “blend wall” at 10% levels.

The letter to Wheeler was sent by Republican senators from Idaho, Louisiana, Mississippi, Montana, Oklahoma, Pennsylvania, Texas, Utah, West Virginia and Wyoming.

Meanwhile, Trump campaigned in Iowa last week where he is in a close race against former Vice President Joe Biden. In Des Moines, Trump said he had delivered on ethanol, adding no president had helped farmers as much as he has done. “I saved ethanol. Ethanol is saved,” Trump said, adding that he ensured ethanol could be sold without requiring blender pumps. “You know, we went through the whole thing where we had no demand because of the pandemic. And we fought hard to keep it going and to keep ethanol going,” Trump said at the Des Moines rally.

Polls show Ernst is slightly behind Democrat Theresa Greenfield in Iowa in a race that could flip control of the U.S. Senate. Greenfield frequently points to small refinery exemptions granted by Wheeler at EPA as cause that Ernst should not have supported Wheeler’s confirmation vote.

“They’ve issued 85 ethanol waivers that has cost us about 4 billion gallons in demand, and that certainly continues to put pressure on our corn prices and commodity prices,” Greenfield told members of the Iowa Farmers Union on a tele-hall event Wednesday.

Ernst, in response to a question from DTN, noted she led a bipartisan effort in May urging the Trump administration to uphold the RFS and reject requests for small-refinery exemptions.

“As I said in May, waiving the Renewable Fuel Standard would not only cause harm to the U.S. economy, but would hurt Iowa’s rural communities, farmers, and biofuel producers. The law is the law, and EPA needs to uphold the Renewable Fuel Standard,” Ernst said.

Here is a link to senators’ letter to EPA: https://www.capito.senate.gov/…

The Renewable Fuels Association responded to the letter by stating the oil-state senators are asking EPA to violate the law and ignore a federal appeals court ruling from 2017 stating EPA had abused its general waiver authority on the RFS because of the so-called “blend wall.” Geoff Cooper, president and CEO of the Renewable Fuels Association, stated the oil industry appears to be shifting strategies from small-refinery exemptions to an all-out waiver on the RFS.

“Enough is enough. EPA should immediately reject this attempt to further undermine the RFS with unjustifiable and unlawful waivers,” Cooper said. “The senators’ letter should go straight to EPA’s dumpster, which is already littered with other baseless waiver petitions and ridiculous RFS complaints from oil state politicians and refiners.”

Chris Clayton can be reached at Chris.Clayton@dtn.com

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