CEDAR RAPIDS — Iowa biofuels industry officials Friday hailed as positive a Trump administration commitment to restore renewable fuel production requirements lost to oil refinery exemptions — but wanted final details before declaring victory.
“Trust but verify,” said Grant Kimberly, a Central Iowa farmer who serves as executive director of the Iowa Biodiesel Board and director of market development for the Iowa Soybean Association, invoking a dictum about the Soviet Union made famous by President Ronald Reagan.
“It appears that we’re going to get the reallocation of those lost gallons from small refinery exemptions so that’s very, very positive,” noted Kimberly, one of several panelists Friday at The Gazette’s Iowa Ideas symposium who lamented that the waivers had led to idling several renewable energy plants in Iowa and cut production by 40 to 50 percent.
Friday’s announcement by the Environmental Protection Agency — the product of President Donald Trump’s and his staff’s discussions with farm- and oil-state senators and industry executives — unveiled a revised biofuels policy deal to help farmers angry over dozens of waivers granted to oil refineries, exempting them from blending mandates under the Renewable Fuel Standard for corn-derived ethanol and soybean-based biofuels.
In August alone, the Trump administration granted 31 such waivers.
“The devil is in the final details,” said Tom Brooks, general manager of the Western Dubuque Biodiesel plant at Farley who also serves on the Iowa Biodiesel Board, Iowa Renewable Fuels Association Board and national biodiesel board. He said his plant has been able to weather the fallout but other Iowa facilities have not been as fortunate.
The renewable fuel rule requires the refining industry to blend biofuels into the nation’s fuel supply, creating a 15-billion gallon yearly market for biofuels. The law allows the EPA to exempt small refineries if they prove compliance would cause disproportionate economic hardship.
“The steps outlined today by the administration will help increase demand for our biofuels, provide certainty for farmers and producers for years to come, and ensure that EPA is implementing the RFS as it was written,” said Iowa U.S. Sen. Joni Ernst, R-Red Oak.
Participants in Friday’s Iowa Idea panel said the decision to recently grant the 31 waivers resulted in “demand destruction,” hurting growers whose export sales already have suffered from the U.S.-China trade war.
Dave Walton, a Wilton grain and livestock producer, said biofuel production adds about 63 cents to a bushel of soybeans, or about $40 per acre.
“When we currently have all the trade uncertainty on an international, global level, we can’t afford to lose our domestic markets or have our domestic markets be reduced on us because of not solving these issue,” Kimberly told the forum. “It looks like the White House has understood that and they’re working to resolve that. So providing that they go forward with what they’ve indicated that they are intending to do, this is a very positive day.”
The deal, which will not be final until November after a public comment period, includes a boost in biofuels blending quotas for coming years based on a three-year rolling average of total biofuel gallons exempted from the renewable mandate. It also includes plans to boost consumer access to E15 gasoline, a blend with 15 percent ethanol, higher than the more common E10 blends.
“This announcement is great news for Iowa, the Midwest and the entire country,” said Iowa U.S. Sen. Chuck Grassley, R-New Hartford, in a statement. “President Trump listened to the concerns of farmers and biofuels producers and delivered on their behalf.”
Former Iowa Lt. Gov. Patty Judge, a Democrat from Albia, said the Trump administration’s effort to “appease” the oil industry had killed demand for 4 billion gallons of biofuels, 1.4 billion bushels of corn and 825 million bushels of soybeans.
“Trump promised rural America he would fix the waiver issue a month ago,” Judge said Friday. “Today’s announcement may patch the problem, but it remains below the demand we saw before his election and we have no information on how he’ll implement it. With a month for the oil and gas industry to comment on this announcement, I’m not sure this is a promise Trump and (EPA Administrator Andrew) Wheeler will keep.”
U.S. Rep. Dave Loebsack, an Iowa City Democrat, not that the issue was one of the Trump administration’s own making by having granted the waivers. “Let’s be clear,” he said in a statement. “Our farmers and rural communities, who depend on a robust RFS, should never have been in this situation in the first place.”
Republican Gov. Kim Reynolds applauded Friday’s announcement as protection of a robust fuel rule critical to a healthy farm economy in Iowa. She attributed the outcome to a united front from the renewable fuels industry and Iowa elected officials.
“It is clear, this President remains committed to America’s farmers,” the governor said.
Monte Shaw, executive director of the Iowa Renewable Fuels Association, welcomed the efforts to restore the requirements in the face of waivers that “destroyed biofuels demand and led to shuttered ethanol and biodiesel plants.
“We welcome the proposal to restore integrity to the RFS,” Shaw said in a statement. “We will work with our champions and the White House to make sure the EPA’s final rules ensure that a 15 billion-gallon RFS will actually be a 15 billion-gallon RFS. If that is accomplished, the integrity of the RFS will have been restored and President Trump’s promise to protect and uphold the RFS will have been redeemed.”
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