President Trump will endanger his standing with farmers, who voted for him in landslide numbers in 2016, if his administration appeals a U.S. appellate court ruling against RFS exemptions, said ag and biofuel leaders on Wednesday. The appeals court, based in Denver, ruled on Jan. 24 that the EPA wrongly issued waivers to three small-volume oil refineries that freed them from having to mix corn ethanol into gasoline.
During a teleconference, the farm-state leaders said the unanimous ruling by three appellate judges was likely to prevail if put to a review. The administration, they said, would be wise to accept the ruling, which now applies to six states in the Rocky Mountains and central Plains, and use it as policy nationwide. On Monday, the White House was given two additional weeks to decide if it will appeal the ruling. Some believe an appeal is certain.
The dispute over the potential appeal is the latest episode in a long-running tug-of-war between the oil industry and ethanol makers. The biofuels industry says the small-refinery exemptions have diminished ethanol sales by hundreds of millions of gallons. The oil industry says Americans don’t use enough gasoline to absorb all the ethanol that biofuels makers want to push onto the market.
In their ruling, the appellate judges said the EPA had erred in giving waivers to three refineries because the Renewable Fuel Standard says that any waiver granted after 2010 must be an extension of a previous exemption, said Reuters. The refineries received their exemptions in 2016. Most of the EPA waivers in recent years are new exemptions, not extensions.
“This is an issue people will be watching. I think the president needs to stand with us on this decision,” said Iowa farmer Kevin Ross, president of the National Corn Growers Association, during the teleconference.
“If this comes down to farmers versus oil companies, farmers are going to remember that in November,” said Iowa soybean farmer Dave Walton, also on the call. Conversely, said Walton, if Trump puts the waiver issue to bed, “I think that would solidify support for him.”
Nearly 40 percent of U.S.-grown corn is used to make ethanol and 30 percent of American soybean oil is used in biodiesel. Backers say biofuels bolster grain prices, create rural jobs, and reduce the need to import fuel. The oil industry says the ethanol mandate distorts fuel demand.
A week ago, the two largest U.S. farm groups were among those that sent a letter to Trump arguing that “it will help restore integrity to the RFS” if the appellate decision was applied nationwide.
The chief executives of two ethanol companies, Erik Huschitt of Badger State Ethanol in Monroe, Wisconsin, and Mitch Miller of Carbon Green BioEnergy in Lake Odessa, Michigan, called during the teleconference on Tuesday for nationwide use the appellate court ruling. The ethanol industry is going through hard times, said Miller. “We need full restoration of the RFS.”
Asked about the impact of falling oil prices, Huschitt said, “It’s just going to put more pain on the ethanol industry. It’s bad on bad.” Lower oil prices will make it harder to sell ethanol, he said.