News

Biofuel battle between Big Oil and King Corn heats up again

Reports: Trump wants authority to keep exempting oil refiners from law

A plant manager walks inside the wet distillers bunker at the Siouxland Energy Cooperative in Sioux Center. The western
A plant manager walks inside the wet distillers bunker at the Siouxland Energy Cooperative in Sioux Center. The western Iowa facility temporarily shut down last fall, blaming the Trump administration for reducing the demand for corn-based ethanol. (Kathryn Gamble/Washington Post)

The roller coaster of good news, bad news for Iowa’s renewable fuel industry continued Friday with reports the Trump administration will argue in court next week it needs latitude to exempt small oil refineries from complying with the nation’s biofuel law.

The number of waivers granted to refineries has quadrupled under the Trump administration, according to the Reuters news service.

In January, the 10th U.S. Circuit Court of Appeals raised a red flag on the program, ruling that the U.S. Environmental Protection Agency exceeded its authority in granting new waivers — though it could extend waivers it had already granted before 2010.

Both the Reuters and Bloomberg news services reported late this week, citing sources they did name, that the Trump administration will appeal that ruling.

The decision to appeal in hopes of protecting the waivers, Reuters reported, came after senators representing oil states pressed the administration, arguing the program was vital for keeping refineries open and oil workers employed.

The dispute between Big Oil and King Corn has pitted two key political constituencies for President Donald Trump against each other. His push-me, pull-you approach to ameliorating both sides appears to have left each unhappy.

“If not changed, this would go down as one of the worst decisions I’ve seen in 20 years of biofuels policy,” Iowa Renewable Fuels Association Executive Director Monte Shaw said in a statement. “When you have a unanimous panel decision, the full 10th Circuit only accepts about 1 percent of appeals for a rehearing and almost never overturns the original decision. So in return for literally no chance to change this straightforward and common-sense decision, Trump is on the verge of outraging every farm and biofuel group in the country.”

ARTICLE CONTINUES BELOW ADVERTISEMENT

The Renewable Fuel Standard requires oil refineries to either blend biofuels like corn-based ethanol into the nation’s fuel supply or buy credits from those who do.

Refiners argue this is an onerous requirement for small operations, which they say can neither afford the technology nor keep up with the cost of credits when the market for them spikes.

However, 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.

Citing two unnamed sources, Reuters reported that White House economic adviser Larry Kudlow told Sen. Chuck Grassley, R-Iowa, that the Trump administration had decided to appeal the ruling.

Asked Friday by The Gazette for a statement, Grassley’s office said the senator would have a comment once an announcement about an appeal had been made.

Grassley, however, did address the reports during a session with Drake University students.

Grassley told them he did not want “to talk about a private telephone conversation I had,” according to the Des Moines Register, but went on to say it would be a “bad idea” to appeal.

“Appealing this decision is going to bring more skepticism to the industry,” he said, according to the Register. “And we’ve got 43,000 jobs that are at stake here just in Iowa.”

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.