President Trump will soon announce a plan to boost demand for biofuels. At least that’s what Agriculture Secretary Sonny Perdue told participants in a policy forum at the Illinois Farm Progress Show on Wednesday. But no one — including Trump or Perdue — seems to know exactly what that plan will be, let alone when it will be announced or implemented.
Earlier this month, Trump directed the EPA to issue 31 waivers to oil refineries, allowing them to ignore the federal mandate to blend corn ethanol and other biofuels into their gasoline. The move infuriated farm state lawmakers, corn farmers, and the biofuels industry, and created another rift between the White House and farmers, who are reeling from the effects of Trump’s ongoing trade war with China.
The waivers were designed to help small refineries that could show they would suffer economic hardship if they had to comply with the biofuel mandate. But the Trump administration has “vastly expanded the waiver program,” reported Reuters.
As CBS News reported, “[d]uring the first three rounds of waivers granted by the Trump administration, 85 small refinery waivers have been granted, exempting over 4 billion gallons of biofuels from being blended in, according to EPA data. During [the] final three rounds under President Obama’s administration, 23 waivers were granted and 690 million gallons were exempted.”
Sen. Amy Klobuchar, a Minnesota Democrat who’s running to replace Trump, called the waivers a “gut punch” to the renewable fuels industry and to midwestern farmers. “Instead of the narrow focus that it was supposed to have, which was used in the past for small refineries, now it’s moved to Chevron and Exxon and major, major oil companies,” Klobuchar said.
Whether or not Trump does deliver on a plan to bolster biofuel demand, this latest rhetorical maneuver is part of his need to appease both the farmers and the oil industry as his re-election campaign heats up.
“The tug of war between the rival oil and corn industries is a growing headache for Trump, who must appease both constituencies as he eyes re-election in 2020,” said Reuters. “Throughout his successful 2016 campaign, Trump championed ethanol but also courted the oil industry.”
If Trump does roll out a biofuels plan, it seems unlikely he’ll find a way to avoid irritating the oil industry. Biofuel proponents are pushing for immediate action, such as reallocating the waived volumes into 2020 blending quotas.
But as Reuters noted, “Any redistribution of waived volumes or lifting of the annual biofuel mandates will upset the oil industry, which rejects farmers’ arguments that waivers hurt ethanol demand.”
Matt Frostic, president of the Michigan Corn Growers Association, told the wire service, “The waivers are reducing demand for biofuels and decreasing the value of our crop. After six consecutive years of depressed commodity prices, on top of a challenging growing season, farmers can’t afford to take another hit.”