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Biofuel Groups Decry EPA Backsliding on Vow That '15 Billion Means 15 Billion'
The Trump administration is employing a regulatory version of “bait and switch” to renege on its promise to increase ethanol consumption, said farm and biofuel groups on Tuesday. The groups objected to a proposal by EPA to use estimates of RFS waivers, rather than the real-life figures that they say were an important part of a deal brokered by President Trump, who campaigned as a friend of ethanol.
“Simply put, this [EPA] proposal is not what was promised by the administration just over a week ago and fails to answer President Trump’s personal call for a stronger conventional biofuel requirement of more than 15 billion [gallons],” said the Renewable Fuels Association. “It is unclear whether this proposal will actually ensure that volume is met.”
Biofuel advocates pressed for months for administration action to insure that an ethanol mandate of “15 billion means 15 billion” gallons would be mixed into gasoline. Corn farmers and ethanol makers say the EPA has effectively reduced ethanol demand by a billion gallons or more through waivers that exempt small-volume refiners from the RFS. Under an October 4 deal, the EPA would continue to grant the “hardship” waivers as warranted but would require other refineries to make up for the “lost” ethanol gallons.
EPA administrator Andrew Wheeler said a week ago that the corn ethanol mandate would “net out” at 15 billion gallons. “We are going to estimate what that number [of ‘lost’ gallons] will be and add it to the RFS for next year, so that after the small refineries are exempted, the final number will still end up being 15 billion gallons,” Wheeler said during a broadcast interview.
On Tuesday, the EPA unveiled a supplemental rule to take the exemptions into account when it calculates the percentage of ethanol required in gasoline for cars and light trucks. Rather than using a three-year average of its waivers — the standard expected by the biofuel industry — it said it would use a three-year average of estimates by the Energy Department of potential waivers. And, for the first time, the EPA said it would grant partial waivers to refineries.
“EPA is proposing to use heretofore secret DOE recommendations that EPA doesn’t have to follow,” said the Iowa Renewable Fuels Association. The National Biodiesel Board said there was no guarantee that the Energy Department estimates will match EPA’s exemptions, which have increased in number since Trump took office. “EPA now proposes to use DOE’s deflated numbers to turn a real fix into little more than a Band-Aid,” said Growth Energy, a biofuel trade group.
“Farmers have long been skeptical of the EPA’s administration of the RFS,” said the National Corn Growers Association. “President Trump made a commitment to farmers and instructed the EPA to follow the law, but this proposal appears to come up short again.”
From 35 to 40 percent of the U.S. corn crop is used each year to make ethanol and co-products such as distillers dried grains, used in livestock feed. Corn grown for ethanol has plateaued in recent years after a decade of dynamic growth.
Oil refiners and gasoline retailers joined the chorus of complaints against the EPA proposal, but for different reasons. Both of EPA’s “concepts” — partial exemptions and re-allocation of ethanol obligations — “run contrary to law and intent of the Clean Air Act and the RFS regulatory structure,” said the Fueling American Jobs Coalition.
A public hearing on the supplemental rule will take place on October 30 in Ypsilanti, Michigan, followed by a 30-day comment period, ending on November 29. The EPA said it would complete work on the supplemental rule by the end of this year. It has proposed an RFS of 20.04 billion gallons for 2020, marginally higher than this year, and plans to publish the final version by late November.
For a summary of the proposed rule and a link to the text of the proposal, click here.