As recently as Wednesday, President Trump lauded farmers as “great patriots” for their forbearance in the face of ag exports lost due to the Sino-U.S. trade war. A handful of corn and soybean farmers active in biofuels policy said on Thursday that there is less patience in farm country for the administration’s handling of the ethanol mandate.
Trump campaigned as a champion of ethanol. But farm groups and ethanol makers say the president has sided with the oil industry by exempting small-volume refineries from complying with the Renewable Fuel Standard. In their view, these so-called “hardship” waivers mean lower demand for biofuels, resulting in idled ethanol plants and fewer buyers for the corn and soybeans that are feedstocks for ethanol and biodiesel.
“We are holding him accountable,” said farmer Daryl Haack, treasurer of the Iowa Renewable Fuels Association, during a teleconference. Fellow Iowan Ron Heck, secretary of the National Biodiesel Board, a trade group, said Trump “needs to rein in the EPA right now or there will be political consequences.”
The teleconference was one of the few times farmers have criticized the president directly. Trump won the farm vote in a landslide in 2106 and remains highly popular among farmers and ranchers. Biofuel advocates typically portray Trump as their champion against an EPA swayed by Big Oil. Ethanol may be a more politically explosive issue than the trade war, according to some midwesterners.
“President Trump vowed to support the ethanol industry,” said Ohioan John Linder, a member of the farmer-funded Ohio Corn Checkoff Board. “We need him to keep that promise.”
Kelly Nieuwenhuis, a farmer and president of the board of ethanol maker Siouxland Energy in northwest Iowa, said the EPA should require other refineries to make up for the waivers given to small refineries so that the RFS of 15 billion gallons a year of corn ethanol is met. Since Trump took office, the EPA has granted 85 waivers, worth a cumulative volume of 4 billion gallons, to small refineries. Waivers are allowed if a refinery does not blend enough ethanol to satisfy the RFS and it would be unduly costly to buy credits, known as RINs, to come into compliance.
“We need the announcement in the next couple of weeks,” said Nieuwenhuis. Siouxland idled its plant in early September because of projected losses in the months ahead. “We decided not to run our plant off a cliff.”
“The EPA will continue to consult with our federal partners on the best path forward to ensure stability in the Renewable Fuel Standard,” said agency spokesman Michael Abboud when asked if a change in course was in store. “The president will always seek to engage with stakeholders to achieve wins for the agriculture and energy sectors.” The EPA has a target of finalizing the 2020 RFS in November.
While the biofuel industry says the waivers, granted retroactively, have reduced demand for ethanol and biodiesel, “that’s just not true,” said Frank Maisano, a spokesman for refineries. “Nobody other than the ethanol industry … seems to find that demand loss.” And if there’s no effect on ethanol demand, he said, there’s no reason for the EPA to reallocate the waived gallons. “That’s not a fair argument.”
The debate over ethanol pits two of Trump’s main constituencies against each other. He has given priority to the U.S. manufacturing sector, which includes refinery workers, as well as to a strong agriculture sector.
Midwestern officials met Trump two weeks ago to discuss the RFS and the waivers. They say Trump agreed to a plan to compensate for the waivers by raising the RFS, but so far the administration has not announced the plan. Trump later met with senators from oil-producing and -refining states and discussed a cap or other form of limitation on RINs.
Nieuwenhuis said the ethanol dispute was eroding support for Trump. “If it changes, I think people will come back.”