USDA deploys officials to defend ethanol policy, relocations

Source: By Marc Heller, E&E News reporter • Posted: Sunday, October 20, 2019

A top Agriculture Department official yesterday tried to reassure pro-ethanol lawmakers that the Trump administration’s latest proposed changes to biofuel policy are in line with a promise President Trump made to stand behind farmers.

Deputy Agriculture Secretary Stephen Censky pushed back against criticism from biofuel groups that EPA’s proposal abandons a promise Trump made less than two weeks earlier, when the White House said its new policy would preserve a legally required 15 billion gallons of conventional biofuels to be blended into the fuel supply.

“I can just assure you directly from the conversations with the president,” Censky said at a Senate Agriculture Committee hearing. “The president is insistent that EPA administer this so that we achieve 15 billion gallons.”

The session was one of two simultaneous congressional hearings on implementation of the 2018 farm bill.

On the House side, Deputy Undersecretary Scott Hutchins told the Agriculture Subcommittee on Biotechnology, Horticulture and Research that USDA is moving quickly to refill jobs at two research agencies that were vacated by employees who declined to relocate to the Kansas City metropolitan area.

Disputed numbers

At the Senate hearing, Censky said Agriculture Secretary Sonny Perdue spoke with EPA Administrator Andrew Wheeler last Friday and that EPA “very much” plans to administer the program so that the 15 billion-gallon target is met.

EPA’s proposal has been met with criticism from both sides of the debate over biofuel mandates for various reasons, with some of the harshest comments coming from ethanol and biodiesel advocates. It’s open for public comment through Nov. 29.

In their view, EPA stepped back on a significant detail in the fine print: how the agency accounts for the biofuel volumes “lost” when a refinery receives an exemption from the fuel-blending requirement for reasons of economic hardship.

The administration recently awarded 31 such exemptions, in addition to others granted since Trump took office — enough, according to ethanol supporters, to put a dent in demand.

As part of the proposal, the volumes affected by exemptions would still be produced, by distributing the requirement among other refineries. But how EPA reaches its numbers is the focus of the dispute.

When the White House announced earlier this month that a deal had been struck, ethanol advocates said they were led to believe EPA would base its calculations on a rolling three-year average of exemptions awarded.

‘Bait and switch’

But the proposal released Tuesday would rely on projections, drawing off the Department of Energy’s past recommendations for refinery exemptions.

There’s no guarantee, groups said, the projections would reflect actual conditions.

“People really felt like it was a bait and switch,” Sen. Tina Smith (D-Minn.) said at the hearing. “What’s going on here, and how can we get to 15 billion gallons being not only what we’re supposed to be doing, but what we are doing?”

Censky told reporters the minimum of 15 billion gallons won’t be undercut by small refinery exemptions.

“As long as the actual exemptions don’t exceed the projections, 15 billion gallons will be met, and that’s what the president has been insistent upon,” he said.

Other senators favoring biofuels, including John Thune (R-S.D.) and Joni Ernst (R-Iowa), pressed Censky on the issue. “It’s important that we follow the law, and the law calls for 15 billion gallons,” Thune said.

USDA has only an advisory role on the renewable fuel standard, but as part of the announcement earlier this month, the administration said the department would take measures to make higher-ethanol fuel, E15, more widely available. Earlier this year, EPA — at Trump’s direction — dropped seasonal limits on sales of the fuel.

Censky said officials are crafting a program to increase infrastructure for E15, such as making sure gasoline pumps to deliver the fuel are more widely installed.

That program, which will be different from a blender pump program run out of the Agriculture secretary’s office during the Obama administration, will be in place early next year, he said in response to questions from Ernst.

The potential for more E15 on the market drew opposition from the National Marine Manufacturers Association, representing the recreational boat industry. That organization says ethanol is harmful to boat engines and that owners could easily confuse E15 with other fuel.

“E15 is a dangerous, destructive, environmentally harmful, and inefficient fuel. More E15 in the marketplace will only exacerbate these problems,” Nicole Vasilaros, NMMA’s senior vice president of government and legal affairs, said in a statement.

“We urge the administration to stop giving handouts to a politically important constituency at the expense of significant safety and financial ramifications for millions of Americans across the country,” she said.

‘Replace’ lost workers

At the House hearing, Hutchins said the department is moving quickly to fill dozens of positions at the National Institute of Food and Agriculture and the Economic Research Service, which are in the process of relocating to Kansas City with less than half the total staff they had previously.

“While it’s true that we lost excellent talent, we have every confidence we’ll be able to replace that,” Hutchins said, adding that officials expect eventually to expand the agencies’ capacity beyond what it was before the relocation was announced.

And while Hutchins said he wouldn’t “sugarcoat” the challenge in rebuilding NIFA and ERS, some positions that typically draw 50 or 60 applicants have been attracting 400 or 500.

“There’s no shortage of interest and no shortage of candidates,” Hutchins said.

USDA hasn’t selected a final office location, but department offices in Kansas City can handle the agencies for now while they add staff, he added.

Hutchins also said USDA is fully committed to researching the effects of climate change on agriculture, countering criticism from some interest groups and Democratic lawmakers that officials don’t promote or publicize climate-related research.

“I can absolutely confirm for this committee that this is not the case,” Hutchins said, citing work on soil health and carbon sequestration, among other issues.

Following reports last spring that USDA issued few news releases about climate-related research — generating a wave of criticism from congressional Democrats — the agency has appeared to make greater efforts to highlight such work (E&E News PM, June 28).