Tension over a new proposed rule regarding ethanol has farmers and industry leaders frustrated both with the Environmental Protection Agency and President Donald Trump.
That frustration may be starting to boil over. Iowa Corn Growers Association CEO Craig Floss said an Iowa farmer gave him the most succinct message on the subject, telling Floss “No more Iowa nice. Now it’s Iowa pissed.”
Floss relayed that message to reporters during an Oct. 16 conference call regarding an Environmental Protection Agency rule proposal that changed key elements in an agreement farmers made with the administration during a call on Oct. 3 and which the administration trumpeted in an Oct. 4 announcement.
Farm and biofuel groups leaders said they were told by Trump administration officials in the Oct. 3 call that the federal government would add gallons to the Renewable Fuel Standard to offset the millions of gallons of ethanol use lost due to waivers the administration has been granting to oil refineries. That number of gallons to be restored was to be calculated using a flat three-year average of granted waivers.
But when the EPA rolled out a proposed rule Oct. 15, the language was not what had been promised, the farm leaders said.
Instead the three-year average figure would come from a recommendation from the Department of Energy instead of from the actual number of exemptions granted by the administration.
The difference, according to industry officials, is that the administration would be able to play with those numbers, and industry leaders would not be able to look at the exemptions and automatically come up with a figure.
“We had a deal with the president. We stand with the president. And today we’re calling on the president to step in and get the EPA back in line,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association.
Shaw also said four Iowa ethanol plants have been shut down, at least temporarily, in large part due to the refinery waivers. The proposed EPA rule would not provide any boost to the ethanol market to help those companies.
“The EPA proposal … will not restart a single one of those plants,” Shaw said.
Instead, he said, the EPA has essentially “weaponized” the refinery exemptions in the past three years. Farmers are starting to lose patience.
Others agreed. Kelly Nieuwenhuis, a farmer near Primghar who is also president of the board at Siouxland Energy, said the mood is changing.
“My personal perspective is President Trump has lost a lot of support,” Nieuwenhuis said. “Pretty much everyone I talk to that’s involved in agriculture and the biofuels industry really lost trust and are really frustrated.”
He called the EPA proposal “pretty disgusting.”
The proposal seeks to balance the goal of the Renewable Fuel Standard statute in “maximizing the use of renewables while following the law and sound process to provide relief to small refineries that demonstrate the need,” the EPA said in a news release.
The changes are meant to make up for future refinery exemptions — not make up for previous waivers, including a batch of 31 issued in August. The approach was slammed by biofuel and agricultural trade groups who had hoped past waivers would be offset.
Oil industry allies have already signaled they will go to court to fight the new quota plan, as it could effectively force larger, non-exempted refineries to blend more biofuels to compensate for small refineries waived from the quotas.
The agency is promising to finalize the measure later this year, following a public hearing on the proposal on Oct. 30 and a 30-day public comment period.
Shaw stressed that he was still hopeful Trump could be convinced to step in and overrule his EPA, but the farmers on the call made it clear the president’s credibility is on the line and their patience is wearing thin on this issue.
They also stressed that farmers were already facing difficult times and the president’s trade war with China has not helped the situation. The continued fight over refinery exemptions is a situation that is costing them money, and at a time when they are already stressed.
Additional reporting by Jennifer A. Dlouhy, Mario Parker and Michael Hirtzer, Bloomberg News.