Frustration continues to grow among corn and soybean farmers as the U.S. Environmental Protection Agency continues to grant waivers exempting oil refiners from requirements to blend biofuels into gasoline and diesel fuel.
With pressure mounting on the entire renewable fuel industry, farmers, biofuel employees and state leaders are anxiously awaiting the Trump administration to announce a plan to address EPA’s use of small refinery exemptions. The SREs are destroying demand for ethanol and biodiesel, which means less demand for corn and soybeans.
On Sept. 24, another Iowa biodiesel plant announced it is shutting down. This follows two ethanol plant closings in Iowa. Ethanol and biodiesel plants in several other states have also closed or been idled.
Roy Strom, CEO of W2 Fuel, the biodiesel plant that closed at Crawfordsville in southeast Iowa, said he’s closing the company’s 10 million-gallon-per- year facility, along with a plant in Michigan, due to increasing financial losses. W2 Fuel is laying off 50 workers in total, including 16 in Iowa. The Crawfordsville plant used 2.5 million bushels of soybeans last year. The two ethanol plants in northwest Iowa that have shut down are Siouxland Energy Cooperative at Sioux Center and Plymouth Energy at Merrill. Siouxland Energy used 25 million bushels of corn annually; Plymouth Energy used 18.5 million bushels.
Waivers destroy demand
Since taking office, the Trump administration has granted 85 oil refineries an exemption from blending 4 billion gallons of renewable fuel into the nation’s fuel supply. The waivers have killed demand for 1.4 billion bushels of corn used to make ethanol and destroyed demand for 825 million bushels of soybeans that go into biodiesel, according to Monte Shaw, CEO of the Iowa Renewable Fuels Association.
The federal EPA determines how much renewable fuel must be blended into the nation’s petroleum fuel supply each year, as mandated by the Renewable Fuel Standard (RFS), a federal law.
LOSING PATIENCE: “The Trump administration said they support ethanol. And yet they suddenly let another 500 million gallons of ethanol demand evaporate by granting these waivers,” says Iowa corn grower Vic Miller.
At the Iowa Corn Growers Association’s recent annual grassroots summit, ICGA members expressed their anger and are calling for the Trump administration to correct this by following the law and upholding the integrity of the RFS.
“President Donald Trump visited Iowa in June to announce the administration’s approval of year-round use of E15, the gasoline blend with 15% ethanol, a move that we believed would boost demand for corn,” says Daryl Haack, a northwest Iowa farmer. “But these small refinery waivers cancel out the E15 move we thought would help the ethanol industry.”
RFS needs to be met
On top of the RFS not being upheld, trade wars are hurting exports of U.S. ag products. Corn, soybean and other ag commodity prices have slumped with ongoing trade disputes with China, Mexico, Canada and other countries. “Farmers can’t take any more financial hits because their livelihoods and futures depend on it,” says Vic Miller, a corn farmer from Fayette County in northeast Iowa.
“Agriculture is in one hell of a bad situation right now,” Miller says. “The government put us in this situation, and they need to help us get out of it. It’s time for President Trump to make rural America and the RFS great again. He made promises to American farmers, and now it’s time for him to keep them.”
Two weeks ago, Iowa Gov. Kim Reynolds, a Republican, met with Trump, U.S. Sens. Chuck Grassley and Joni Ernst, both of Iowa, and other Midwest Republican leaders to discuss the harm biofuel producers and farmers are experiencing.
Reynolds told Wallaces Farmer she felt confident the president would honor a verbal agreement the Midwest leaders reached with him and his administration to restore demand for ethanol and biodiesel. But both Reynolds and Grassley said they want to see something in writing from the Trump administration to solve the waiver situation. Trump met last week with congressional leaders from oil-producing states.
Iowa leaders want plan in writing
In his weekly telephone conference with reporters last week, Grassley expressed impatience. The agreement about the waivers “should be on paper, and it should have been done yesterday,” he said. “Biofuels are on life support because of these waivers.”
He added, “We need to make sure that when the government says it’s going to have 15 billion gallons of ethanol mixed with petroleum, that it’s really going to be 15 billion gallons.”
Reynolds agreed, “The devil’s in the details, so I want to see the agreement in writing. These waiver amounts need to be reallocated among the other petroleum refiners for blending biofuels.
“This issue has a tremendous impact on Iowa’s economy, especially our rural economy. My message to the EPA and to the administration is we really need for them to rectify this waiver situation sooner rather than later.”