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Ethanol backers angry over Trump administration decision

New fuel rule violates vow president made to help farmers, critics say

Workers load corn in 2013 at the Valero ethanol plant in Charles City. (Waterloo Courier)
Workers load corn in 2013 at the Valero ethanol plant in Charles City. (Waterloo Courier)

A federal regulation unveiled Thursday breaks a promise President Donald Trump made earlier this year to farm state politicians and the ethanol industry, according to the officials.

The president’s Environmental Protection Agency released its final version of a heavily lobbied Renewable Fuel Standard, but the rule did not include language Trump had agreed to in meetings last September and October with industry officials, Iowa’s governor and congressional representatives.

“Apparently President Trump doesn’t care about his promise to Iowa’s farmers,” said Iowa Corn Growers Association President Jim Greif. “He had the opportunity to tell his EPA to stick to the deal that was made on Oct. 4.”

The final rule does not specify that the EPA will add ethanol gallons back in the nation’s fuel supply based on exemptions it granted oil refiners.

Instead, the rule says the EPA will base its final blending requirement on recommendations from another agency — the Energy Department — that typically have been lower than the reality.

The ethanol industry and corn farmers who raise the grain that’s made into ethanol said the agreed-upon language would have created market certainty by assuring the industry it would meet the 15 billion gallons of corn-based ethanol for 2020 mandated by federal Renewable Fuel Standard law.

Roughly 40 percent of U.S. corn is used to produce ethanol, so fewer ethanol gallons means a reduced market for corn.

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The EPA issued 85 retroactive small refinery exemptions for the 2016-18 compliance years, undercutting the renewable fuel volumes by a total of 4 billion gallons, according to the Renewable Fuels Association.

While oil refiners have long said it’s too expensive for small facilities to comply with the fuel blending law, ethanol interests point to one waiver in particular in saying the EPA has been unfair: That waiver went to a refinery for Exxon Mobil — which later reported 2017 earnings of almost $20 billion.

Ethanol industry officials said that, on the other hand, at least 20 U.S. ethanol plants have closed at least temporarily since September 2018 due in part to the reduction of ethanol use because of EPA policy.

“Instead of certainty, we are essentially being told to trust the EPA to uphold the RFS in the future even though for the past three years the EPA has routinely undermined the program,” said Iowa Renewable Fuels Association Executive Director Monte Shaw, who accused Trump of turning his back on farmers. “Every farmer and biofuel supporter I have talked to is deeply disappointed, frustrated, and quite frankly angry. I don’t think the White House truly understands the depth of discontent in farm country.”

The EPA said it has modified its waiver policy to ensure mandatory biofuels volumes are met and contends that the Trump administration has fulfilled its key promise to farmers.

“President Trump committed to our nation’s farmers that biofuel requirements would be expanded in 2020. At the EPA we are delivering on that promise and ensuring a net of 15 billion gallons of conventional biofuel are blended into the nation’s fuel supply,” EPA Administrator Andrew Wheeler said in a statement.

Two months ago, Bloomberg News reported that, based on accounts given in documents, the U.S. Department of Agriculture sought to intervene on behalf of farmers, But a White House office sided with the EPA to preserve the regulation that was announced Thursday.

Some critics hesitated to point the finger directly at Trump, but indicated deep distrust in the president’s EPA.

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“I’d like to say I can trust EPA will follow through with their rule, but the agency continues to side with the oil industry,” said David Bruntz, a Nebraska farmer and chairman of the Nebraska Corn Board.

He said the rule also fails to include 500 million gallons of biofuels a federal court in 2017 ordered the EPA to restore to the U.S. fuel supply.

Republican Iowa Gov. Kim Reynolds refrained from criticizing Trump directly, but said: “Wheeler should know we are not done holding him to the agreement we reached with President Trump in the Oval Office on Sept. 12U.”

Republican U.S. Sen. Chuck Grassley of Iowa, who was in one of the White House meetings when an agreement was struck, said the final rule doesn’t reflect the deal.

“Once again, EPA is playing games and not helping President Trump with farmers,” he said.

The Associated Press and staff of The Gazette contributed to this report.

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