A week ago, Jim Greif drove 16 hours to set EPA straight. The Iowa Corn Growers Association president drove from his eastern Iowa farm to Michigan to testify at a public hearing the U.S. Environmental Protection Agency held Oct. 30 to gather input on its proposed rule for biofuel blending requirements as required by the Renewable Fuel Standard.
Farmers and farm organization leaders from Iowa and other Midwest states took time away from harvest to tell EPA its proposed rule is flawed, concerning how annual renewable fuel volumes for the RFS are to be calculated. The big concern is with the small-refinery waivers EPA is granting to oil refiners, exempting them from RFS requirements to blend a certain amount of ethanol and biodiesel into the gasoline and diesel fuel they produce each year.
In the past three years, EPA has granted 85 exemptions to oil refineries, destroying over 4 billion gallons of biofuel demand and threatening the future of ethanol and biodiesel production facilities across the country. Nearly 30 plants have already closed either permanently or temporarily this year — four of them in Iowa. Many of the remainder have reduced production, as it is difficult to make a profit due to reduced demand for renewable fuel — demand destruction caused by the waivers.
EPA destroying demand for corn
In addition to farmers and biofuel industry supporters, representatives of the petroleum industry also testified at last week’s EPA hearing. They said a final EPA rule for blending the exact same number of exempted gallons back into the RFS annual volume requirements, with the waived gallons to be allocated among the remaining ethanol and biodiesel plants, is not acceptable.
“But that’s how the RFS, a federal law, is supposed to work,” countered Monte Shaw, executive director of the Iowa Renewable Fuels Association, in his testimony at the hearing. “Those exempted gallons are supposed to be redistributed to the remaining refiners that don’t get exemptions.”
The RFS requires a minimum of 15 billion gallons of ethanol to be blended into the nation’s gasoline supply each year. “Fifteen billion gallons is supposed to be 15 billion gallons, even when you account for the exemptions,” Shaw said. “The exempted amount should be reallocated among the remaining oil refineries that are not getting waivers.”
In early October, after enduring numerous complaints from the ethanol industry, corn and soybean growers, and farm state political leaders, a deal was struck with President Donald Trump to restore the gallons lost over the years due to the small-refinery waivers. However, the proposed rule for reallocating these gallons, announced by EPA a couple weeks later, doesn’t fully account for the waived gallons. It leaves nearly a third of the unblended 1.6 billion gallons on the table.
Tell EPA to stick to president’s deal
Following the Oct. 30 hearing, EPA opened a 30-day comment period for the proposed rule. In the rule, EPA proposes using a three-year average of Department of Energy recommendations rather than a three-year average of the gallons EPA has actually waived.
“This detail matters,” Greif said. “EPA needs to hear from all farmers and all supporters of renewable fuel. You need to tell EPA Administrator Andrew Wheeler how his agency’s proposed rule as it is now written will continue to destroy demand for corn and soybeans, eliminate jobs in the ethanol and biodiesel industry, and hurt the rural economy.”
Greif added, “By following DOE suggestions rather than actual numbers, farmers may only get back half of the demand destruction that EPA actually grants in future years. This means 580 million gallons of biofuel demand will be waived annually that is completely unaccounted for — roughly eliminating the ethanol production capacity of the entire state of Wisconsin. In corn numbers, this means 203 million bushels of corn demand will continue to be eliminated annually.”
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Nov. 29 deadline for comments
“Quite simply, the EPA’s proposal destroys corn demand and does not uphold the integrity of the RFS or follow the law,” Greif said. “Be sure to submit your comments on the proposed rule before the Nov. 29 comment period deadline.”
Soybeans have a big stake in the RFS waiver issue as well corn. The small-refinery exemptions have hurt the biodiesel industry significantly.
“If there’s anything positive this situation has brought, it’s that we’re seeing the biodiesel and ethanol folks work together on this issue,” says Kirk Leeds, CEO of the Iowa Soybean Association. “They are working together at a level we haven’t seen before — not only at the corn and soybean association level, but with our producer members as well. There is coordination of efforts to make agriculture’s concerns known to EPA and the White House on the RFS waiver issue.
“There is a lot of anger in the countryside, frustration. We thought we had a deal with President Trump in a series of meetings we had with administration and EPA officials. But when the proposed rule was finally released by EPA, it was different than what we had agreed upon with the administration.”