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Ethanol waivers 'clear violation' of commitments to farmers: Gov. Reynolds, Ag Sec. Naig

Cite 'devastating toll on rural families'

Gov. Kim Reynolds in Winterset, Iowa, on Wednesday, July 18, 2018. With Reynolds are (from left) Iowa Secretary of Agriculture Mike Naig, Sandy Ehrig of the Iowa Rural Development Council and Acting Lt. Gov. Adam Gregg. (Photo by Erin Murphy, Gazette-Lee Des Moines Bureau)
Gov. Kim Reynolds in Winterset, Iowa, on Wednesday, July 18, 2018. With Reynolds are (from left) Iowa Secretary of Agriculture Mike Naig, Sandy Ehrig of the Iowa Rural Development Council and Acting Lt. Gov. Adam Gregg. (Photo by Erin Murphy, Gazette-Lee Des Moines Bureau)

Gov. Kim Reynolds and Secretary of Agriculture Mike Naig joined a growing list of state Republican lawmakers to criticize the Trump administration’s decision to exempt 31 oil refiners from federal requirements to use biofuels.

Reynolds and Naig outlined their “profound disappointment” in the U.S. Environmental Protection Agency’s approval of those waivers in a letter dated Wednesday to Andrew Wheeler, the agency’s administrator.

“These actions are a clear violation of the president’s commitments to Iowa farmers and renewable energy producers across the heartland,” they wrote.

The latest round of waivers from the federal Renewable Fuel Standard Program eliminated 1.43 billion gallons of biofuel demand, amounting to more than 500 million bushels of corn, Reynolds and Naig said. The program requires oil refineries to mix renewable energy sources such as corn-based ethanol or soybean-based biodiesel with their gasoline, or buy credits.

They said more than 4 billion gallons of energy have been undercut through previous small refinery exemptions over the Trump administration’s past three years, under which the EPA more than quadrupled its number of exemptions granted, with 85 waivers granted since 2016, including to companies such as Exxon Mobil and Chevron.

That shift has saved the oil industry hundreds of millions of dollars in compliance costs but provoked umbrage from corn growers.

“The loss of these markets has taken a devastating toll on rural families facing one of the toughest years on record,” Reynolds and Naig wrote in their letter. “Ethanol consumption fell for the first time in 20 years, commodity markets are depressed and many biofuel plants, including several in Iowa, have already slowed or halted production.”

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The two officials also renewed criticisms Reynoldsmade last month, saying the EPA’s proposed biofuel targets for 2020 failed to reallocate the lost ethanol gallons to other obligated oil facilities.

A proposed draft reset of the Renewable Fuel Standard “will ultimately raise or lower the bar for growth in homegrown energy for 2021 and all future years,” Reynolds and Naig said. “This could block pathways for the adoption of advanced and cellulosic biofuels that transform farm waste into new rural revenue streams.”

Reynold and Naig closed their letter by extending Wheeler an “open invitation” to visit Iowa and witness the waivers’ “devastating” impact on farmers, biofuel producers and rural communities.

President Donald Trump reportedly called Wheeler on Aug. 9 and instructed him to grant the 31 waivers to get the issue “off his desk,” sources told Reuters last week.

It wasn’t long before multiple prominent Iowa lawmakers publicly condemned the move.

“They screwed us ... when they issued 31 waivers, compared to less than 10 waivers during all the Obama years, and we thought that was bad,” U.S. Sen. Chuck Grassley told Iowa Public Television that same Friday. “What’s really bad isn’t a waiver, it’s that it’s been granted to people who aren’t in hardship.”

Former Iowa Gov. Terry Branstad, now the U.S. ambassador to China, expressed concern to Trump about the waivers’ impact on rural America, including Iowa, during a Monday Oval Office meeting with other administration officials.

And U.S. Sen. Joni Ernst, also a Republican,tolda Tuesday town hall audience in Cedar Rapids that the Renewable Fuel Standard is “under attack” and suggested that larger refiners produce the biofuel the small refiners were exempted from blending.

“I don’t think the president fully understood how detrimental it would be by giving those waivers,” she later told reporters.

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On the Democratic side, U.S. Reps. Abby Finkenauer and Dave Loebsack on Tuesday called for the Government Accountability Office to investigate how the EPA was applying the waivers under the Renewable Fuel Standard.

U.S. Rep. Cindy Axne made a similar request in a Wednesday letter to Charles Sheehan, the EPA’s acting inspector general.

In a statement Tuesday, the EPA said that there was “zero evidence” the waivers have hurt demand for ethanol.

That same day, the nation’s largest ethanol producer, POET, blamed the “oil bailouts” for its decision to idle production at its 92-million-gallon-a-year ethanol plant in Cloverdale, Ind., cut production at half its 28 plants — primarily in Iowa and Ohio — and consolidate “numerous” jobs.

• Comments: (319) 398-8366; thomas.friestad@thegazette.com

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