Trump Agencies Bicker Over Ethanol Plan as Higher Fuel Use Looms

Source: By Mario Parker, Bloomberg • Posted: Thursday, February 28, 2019

President Donald Trump’s pledge to his rural agricultural base to allow year-round sales of higher blends of ethanol is spurring differing opinions between two key federal agencies.

U.S. Agriculture Secretary Sonny Perdue told lawmakers in a House hearing on Wednesday that a final rule to allow widespread sales of those higher blends “won’t happen” by the summer-driving season following delays from the 35-day partial government shutdown.

That sparked a swift response from the Environmental Protection Agency, which is writing the regulation and insists the measure is on track.

“EPA is planning on releasing its RVP/RIN market reform proposal in March, and working expeditiously to propose and finalize the rule consistent with the president’s direction before the start of the summer driving season,” agency spokesman Michael Abboud said in a statement.

Rural Midwest voters want the Trump administration to move quickly on year-round sales of so-called E15, a blend of gasoline comprised of 15 percent ethanol. That ratio currently is restricted on fuel in some areas during the summer months. Trump told Iowa voters in the autumn that he had signed a memo telling EPA to lift summertime restrictions on the fuel.

Shutdown Delay

The government shutdown halted work at the EPA, stoking skepticism in the Midwest Corn Belt that the administration will have the measure in place this summer to meet peak fuel demand. The slumping farm economy has struggled during the U.S. trade war with China that has damped exports of ethanol, soybeans and other agricultural goods.

The EPA’s acting chief, Andrew Wheeler, has tried to assuage lawmaker concerns on biofuel policy. Perdue’s comments came before the Senate held a procedural vote to advance Wheeler’s nomination to lead the EPA, setting up a full confirmation vote as soon as Thursday.

Perdue said that he’s pushing EPA to make an announcement “soon” on “discretionary enforcement” for gasoline stations that sell the higher blends, signaling they won’t face penalties for offering E15 this summer even if the rule isn’t finalized.

The ethanol debate pits blue collar oil workers against farmers producing the crops used to make biofuel, spurring a ruckus between two of Trump’s main constituencies.

Ethanolis key part of U.S. farm economy

Biofuel advocates on Wednesday blasted the possible delay. Renewable Fuels Association President Geoff Cooper called it a “gut punch” if true.

“The year-round E15 provisions are straightforward, and there is no reason they could not be promulgated by this summer,” Cooper said. The group has asked the EPA to separate out more complicated provisions in the plan targeting biofuel compliance credits.

“We appreciate EPA’s clarification on the E15 rule-making timing,” Leigh Claffey, a spokeswoman at Growth Energy, an industry trade group, said in an email. “However, it is imperative that EPA follow through on its commitment to allow year-round E15 in time for the summer driving season. American farmers and biofuel producers are counting on it.”

— With assistance by Teaganne Finn

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