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Ethanol Groups Say EPA Proposal Contradicts White House Deal

Clay Masters
IPR file
Iowa corn and soybean farmers, and people in the biofuels industry, had been expecting the EPA's proposal to fully make up for ethanol demand lost to small refinery waivers.

Iowa biofuels groups are calling on President Donald Trump to resolve a dispute with the Environmental Protection Agency that one farmer called “disgusting and disappointing.”

According to industry advocates, a proposal released by the EPA this week contradicts a deal reached with the White House to restore lost demand from waivers that allow small oil refineries to use less ethanol and biodiesel.

Iowa Renewable Fuels Association executive director Monte Shaw said the EPA proposal would return only about half of the industry’s annual losses, rather than the full amount as promised by White House officials.

“The final decision will be the president’s and he’ll be held accountable for that,” Shaw said at a news conference Wednesday. “But I’m still optimistic that he struck a deal and I think with Mr. Trump a deal’s a deal.”

Iowa Gov. Kim Reynolds and other lawmakers who were involved in the negotiations are also voicing their surprise and concern with the EPA’s proposal.

“President Trump promised 15 billion gallons of renewable fuel blended per year, and I will work to hold the EPA accountable to ensure that promise is kept,” Reynolds said in a statement.

Corn and soybean farmers depend on ethanol and biodiesel production to drive demand for their crops. Farmer Kelly Nieuwenhuis of Primghar, Iowa, said those markets have taken on added importance in recent years because trade disputes have interrupted exports to key markets such as China.

“I’m really frustrated,” said Nieuwenhuis, who is also on the leadership board of the idled Siouxland Energy Cooperative near Sioux Center. “Pretty much everyone I’ve talked to in agriculture and the biofuels industry have really lost trust.”

Small refinery exemptions (SREs) have cost the ethanol industry about 1.4 billion gallons of demand each year from 2016-2018 and are a factor in some plants shutting down, according to Monte Shaw.

Under the deal reached with the White House and announced by Trump on October 4, the EPA was supposed to add extra gallons to the annual biofuels mandate based on the average amount exempted by waivers over the three previous years. Instead, the EPA is proposing to base that calculation on the amount of waivers recommended by the Department of Energy. The EPA doesn’t have to follow DOE recommendations and often goes beyond them.

“Trump had a deal roll out on October 4 that used real numbers, transparent numbers and an accountable system that was certain,” Shaw said. “The EPA is trying once again to put themselves in a position to wiggle off the hook.”

The EPA is taking public comment on its proposal and will hold a public hearing in Ypsilanti, Michigan on October 30.

Grant Gerlock is a reporter covering Des Moines and central Iowa