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Wednesday, September 04, 2019

Trump caught between corn and oil interests over changes to Renewable Fuel Standard, small-refinery waivers

President Trump is once again caught between the interests of the Corn Belt and those of the petroleum industry in the continuing battle over the Renewable Fuel Standard.

The Environmental Protection Agency determines how much ethanol and biodiesel must be mixed into the nation's fuel supply; the amount of ethanol and biodiesel is supposed to increase over time, but the administration announced in July that it would not increase the amount of corn-based ethanol next year (but would increase the amount of cellulosic ethanol made from grass and woody plants), a proposal that infuriated corn and ethanol producers. On top of that, the groups believe EPA is trying to help oil producers get around the ethanol requirement by granting numerous "hardship" waivers to small oil refiners, Donnelle Eller reports for the Des Moines Register.

Corn growers and other biofuel producers are particularly angered by the EPA's approval of 31 such waivers in August. "The action last month sparked a backlash from producers who say the exemptions undermine demand for ethanol, exacerbating economic challenges in agriculture including low crop prices and the trade war with China," Ryan McCrimmon reports for Politico's Morning Agriculture. "The National Corn Growers Association on Friday said Trump’s ethanol moves have cost 2,700 rural jobs and affected demand for 300 million bushels of corn due to lower ethanol production and plant closures."

The recent waivers also mean that 1.4 billion gallons of ethanol and biodiesel will not have to be blended into fuel. "Since taking office, the Trump administration has granted 85 refineries a pass from buying 4 billion gallons of renewable fuel, killing demand for 1.4 billion bushels of corn used to make it," Eller reports. "The exemptions are driving 15 ethanol plants to close nationwide. Others are throttling back production, industry groups say."

"It’s unclear if a compromise the White House is now considering will be enough to placate farmers," McCrimmon reports. "Agriculture Secretary Sonny Perdue, EPA Administrator Andrew Wheeler and White House aides are negotiating details of a plan to boost both corn ethanol and soy-based biodiesel by raising blending requirements for next year. The plan under consideration would add about 875 million gallons to refiners’ obligations, but that accounts for just a third of the volume affected by the EPA waivers."

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