Trump Lays RFS Egg and Perdue Hatches It

Source: By Jim Wiesemeyer, Profarmer • Posted: Tuesday, October 22, 2019

Perdue says Trump fulfilled promise and once farmers ‘understand, they’ll be fine’

President Donald Trump today said a plan to recalculate biofuel-blending requirements to offset waivers exempting refineries from the mandates is approved, done and ready to sign and that the deal is “going to be terrific for the small refiners” that have “been hurt for a long time” and have been helped by waivers. In comments virtually certain to upset his farmer supporters, Trump said farmers “seem to be very happy” with the plan. Link to transcript.

Trump’s comments came during a Cabinet meeting this morning amid biofuel industry complaints the EPA has proposed recalculating blending requirements based on past Department of Energy (DOE) recommendations on waivers — not the EPA’s actual decisions on them. Opponents of the proposal say it runs the risk of under-projecting refinery waivers and undercutting the annual target to use 15 billion gallons of primarily corn-based ethanol under U.S. Renewable Fuel Standard (RFS) law.

Trump asked EPA Administrator Andrew Wheeler in the meeting to “make sure the small refiners are happy.”

Background: The supplemental plan for the RFS would use a three-year average of the recommended small refinery exemptions (SREs) from the DOE to upwardly adjust the percentage levels under the Renewable Volume Obligations (RVOs) so that 15 billion gallons of conventional ethanol are used.

USDA Secretary Sonny Perdue told Trump he fulfilled his promise to make higher-ethanol E15 gasoline available year-round and “balanced the small refinery waivers with the farmers and RFS, and once they fully understand what you’ve done here, they’ll be fine.”

EPA’s Wheeler on Monday tried to reassure furious biofuel groups and others that they will get their full allotment of ethanol blending next year. Wheeler claims it will all work out: “I think a lot of people who had a knee jerk reaction, [the rule] wasn’t exactly what they were expecting,” he said on Monday during an interview with Nexstar Media Group (link). “If they look at it and they read it carefully, they will see it will get us to the 15 billion gallons of ethanol that the president promised and that’s in the statute.”

President Trump noted that he spoke with Iowa GOP Sens. Chuck Grassley and Joni Ernst about it. However, Grassley’s office said the senator had not spoken with Trump or Wheeler since the new rule’s release last week. Ernst spoke with Wheeler on Thursday, but her office did not respond to a question about whether she had spoken to Trump.

PERSPECTIVE: The comments from Trump come despite several biofuel makers and others complaining bitterly that the deal announced last week by EPA will not equate to 15 billion gallons of conventional ethanol being used each year.

As for Perdue’s comments that once farmers and biofuel industry officials understand what the Trump administration has done, they “will be fine,” one veteran policy analyst said: “Perdue and the Trump administration better help the rural sector understand because comments like they made should and likely will weaken the president’s support in some must-have farm states.”

A former USDA official under a GOP administration said, “Renewable folks will not be fine worrying that EPA still has the discretion to net out at less than 15 billion gallons in a given year. The renewable fuel folks need to weigh in at the public hearing and bombard EPA in the public comment period as well as keeping the pressure on Sonny Perdue, Andrew Wheeler and the White House. I don’t think people ever thought increased E15 was part of the commitment to achieve the statutory mandate of 15 billion gallons, and they won’t want to accept Sonny’s explanation.”

The initial response from farmers has not been universally positive. “While corn farmers appreciate the EPA’s intent to follow DOE recommendations on waivers going forward, the proposed rule fails to provide the assurance needed that EPA’s practices for granting waivers will change going forward,” National Corn Growers Association (NCGA) President Kevin Ross said. “Farmers have long been skeptical of the EPA’s administration of the RFS. This proposal does not provide farmers confidence in EPA’s ability to follow through and make this right. President Trump made a commitment to farmers and instructed the EPA to follow the law, but this proposal appears to come up short again.”

EPA unveiled the plan Oct. 15, but it has yet to be published in the Federal Register and as of midday Monday (Oct. 21), the measure was not yet on public inspection at the Federal Register.

The American Farm Bureau Federation today put out an article entitled, “EPA’s Small Refinery Waiver Proposal Is an Unbalanced Approach for Agriculture.” Link for details.