ALTOONA, Iowa — Leaders of the ethanol industry are likely glad to turn the page on 2018, but they are under no illusions that 2019 is going to be an easy year.
“2018 was the toughest year yet,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. “With forces inside of EPA and the West Wing trying to convince President Trump to gut the RFS (Renewable Fuels Standard), there were months when I went to sleep wondering if a tweet the next day would undo the last 19 years of our work.”
Luckily, that didn’t happen, Shaw said. But he said there are “a plethora of issues facing us.”
Shaw and other industry leaders spoke at last week’s Iowa Renewable Fuels Summit. They say the biggest item on that agenda for 2019 may be the idea of a “reset” from the Environmental Protection Agency.
“That’s been on the radar for a long time,” Shaw said.
The reset will guide where the RFS goes from here. When the RFS was passed into law a dozen years ago, usage figures were laid out through 2022. At that point the program wasn’t supposed to expire, but EPA was to look at usage and production and then reposition the levels required. The law also included language essentially saying that if numbers were adjusted more than 20 percent several times in a row prior to 2022, the EPA could reset the requirements.
Numbers have hit that 20 percent stipulation, and EPA is expected to issue a reset of RFS requirements for 2020 through 2022 this year.
Industry leaders will be looking closely at the numbers EPA puts forth, but also the six criteria it is expected to use. Those criteria will say much about how EPA will guide the RFS in future years, Shaw said.
Of course, there are a number of other important issues. Perhaps the timeliest one is the rule-making for allowing the year-round sales of E15, the 15 percent blend of ethanol. The Trump administration promised to issue a rule in time for the summer 2019 driving season, but it takes time — there is supposed to be a 45-day comment period, for example — and the month-long shutdown of the federal government did not help.
The proposed rule has not yet been sent to the Office of Management and Budget, which needs to happen soon.
“We’re now waiting for EPA,” said Bill Howell, president of the IRFA.
But even if that rule is issued before June 1, the oil industry is likely to go to court in an attempt to delay the rule. Shaw doesn’t expect that stay to be granted, but everyone will be watching to make sure.
There is also the issue of waivers that have been offered to small refineries. That was a rarely used item in the past, but under former EPA chief Scott Pruitt, Shaw said the waivers were “handed out like Halloween candy.”
Indeed, he said Pruitt lied to ethanol leaders about the waivers. Pruitt’s successor at the EPA, Andrew Wheeler, has said he wants the process to be more transparent, but new guidelines for those waivers are necessary, and the industry will be waiting to see if it dramatically changes the process. Industry leaders say that about 2.25 billion gallons of sales were lost due to that exemption.
At the end of the day, Shaw said, “the state of the Iowa renewable fuel industry is hurting, but it is hopeful.”