Double-edge sword in Trump’s renewable fuel policy

Weighing in for the first time on its renewable fuels policy, the Trump administration proposed Wednesday that the amount of conventional renewables blended into the nation's fuel supply remain steady in 2018, while the amount of advanced renewables decrease.

Donald Trump campaigned on a promise of supporting renewable fuels like corn-based ethanol that have become key to the farm economy.

The ethanol industry is 'under siege,” he said at a June 21 rally in Cedar Rapids. But, he said, his administration would save it. Nonetheless, some of the top officials and advisers in his administration are opposed to or ambivalent toward the Renewable Fuel Standard, raising doubts about what the policy would turn out to be.

The debate consistently has pitted renewable fuel groups against oil producers and refiners.

Wednesday's announcement by the U.S. Environmental Protection Agency seemed an attempt to thread the needle between the two sides - not entirely pleasing either.

The EPA proposed that 15 billion gallons of conventional renewable fuels, which would include ethanol, be blended into fuels in 2018, the same as this year.

But it proposed actually cutting the amount of advanced biofuels for 2018 to 4.24 billion gallons, down from 4.28 billion this year.

'We are proposing new volumes consistent with market realities focused on actual production and consumer demand while being cognizant of the challenges that exist in bringing advanced biofuels into the marketplace,” EPA Administrator Scott Pruitt said in a statement.

Renewable industry groups praised the ethanol figure.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the 15 billion figure represents a campaign promise kept.

But the level for advanced biofuels drew concern and criticism.

The target for biodiesel, which the category includes, for 2019 was set at 2.1 billion gallons - the same as for 2018.

'Unfortunately, a change in administrations did not change the EPA's under appreciation for the potential of U.S. biodiesel production,” Shaw said. 'Keeping biodiesel levels frozen at 2.1 billion falls short of U.S. industry capabilities, even before imports are considered.”

Tom Brooks, general manager of Western Dubuque Biodiesel in Farley and chairman of the Iowa Biodiesel Board, said: 'If these volumes stand, the U.S. could restrict one of its most powerful opportunities to support American manufacturing of energy.”

He and others said it was the first ever reduction in the category since creation of the RFS by Congress in 2005.

Cellulosic biofuel targets would fall from 311 million gallons to 238 million next year, the EPA proposed.

The American Petroleum Institute applauded the announcement but said it didn't go far enough toward overhauling the RFS program.

'Today's proposal reaffirms the importance of RFS reform, as it is essential that Americans have access to fuels they want and can safely use in their vehicles,” said the institute's Downstream Group Director Frank Macchiarola. 'Congress must fix this broken, outdated program.”

Iowa Gov. Kim Reynolds said the EPA is bringing predictability to the renewable fuel industry, though she added, 'I am disappointed biodiesel levels are not higher.”

Sen. Joni Ernst, R-Iowa, said she was pleased with the ethanol figure but said there is room for growth in the biodiesel target. They both said they would continue to promote the industry.

The only Democrat in Iowa's congressional delegation, Rep. Dave Loebsack of Iowa City, said the new figures represented a betrayal by the president.

'For all of President Trump's promises to fight for rural America, it appears he once again has turned his back on Iowa's farmers and rural communities,” he said. 'Never in its history has the EPA reduced the amount of advanced biofuels required to be used in the U.S. under the Renewable Fuel Standard.”

The EPA's proposal now opens up a comment period. Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2017-0091, at regulations.gov.