President Trump confirmed in public what was being whispered in private — that he would not allow ethanol exports to count toward meeting U.S. biofuel targets — in greeting Iowa Sen. Joni Ernst at a bill-signing ceremony on Wednesday. “Where’s Joni?” asked Trump. “Because I did you a good favor for the farmers yesterday. Right? We love the farmers.”
Since last fall, Trump has been refereeing a tug-of-war between the oil industry and ethanol makers over the Renewable Fuel Standard. The White House was expected to announce a two-part package on Tuesday but stayed silent into the night. The oil industry would have benefited from the change in policy on ethanol exports because it would have made it easier to comply with the RFS. The other part of the package was expected to be the approval of year-round sales of E15, a richer blend of ethanol into gasoline than the traditional 10 percent, which would mean larger sales.
“I thank President Trump for helping farmers by rejecting once and for all a proposal that would have undermined the RFS and hurt ethanol,” said Iowa Sen. Chuck Grassley during a teleconference. A longtime proponent of biofuels, Grassley said the benefit of year-round E15 would be outweighed by the reduced market for ethanol if exports counted toward the RFS target of producing 15 billion gallons a year of corn ethanol. “That’s why the deal would have been a net loss, and that’s why I’m glad the president rejected it for good.”
Ernst said on Twitter, “@realDonaldTrump has said he ‘looovves the farmers!’ #Iowa is feeling that love today, as the President just assured me he ‘won’t sign a deal that’s bad for farmers!’ Thank you, Mr. President!” Iowa is the No. 1 state in corn and ethanol production, which is concentrated in the Midwest.
Like other ethanol groups, the American Coalition for Ethanol applauded the president’s decision but asked, “Where does that leave us today? The president has promised to allow E15 year-round but EPA has failed to make good on his promise.” The coalition said the administration needed to follow through on E15 and also stop the EPA from indiscriminately issuing “hardship” waivers to small oil refineries that exempt them from complying with the RFS.
Grassley also called for EPA action on those two points. On E15, he said, “Will he [EPA administrator Scott Pruitt] move ahead doing that? It’s probably very difficult.” Trump pledged support for ethanol as a presidential candidate. Grassley has been doubtful of Pruitt’s support for the alternative fuel. Pruitt was attorney general in Oklahoma, an oil state, before his appointment to the EPA. “You kind of question if Pruitt leveled with us when he said he was pro-ethanol,” said the Iowa senator. On Tuesday, when the administration’s biofuel policy was still unannounced, Grassley told reporters, “I think that Pruitt has betrayed the president” on ethanol.
At present, the EPA bars the sale of E15 from June 1 to Sept. 15 under a regulation that says the fuel evaporates too easily during hot weather, creating a risk of ozone pollution. Colorado Sen. Tom Udall and Vermont Rep. Peter Welch wrote to Pruitt on Wednesday to argue that the EPA lacks the power under clean air laws to allow the summertime sale of E15. “We urge you in the strongest possible terms to resist directives from the White House to make major policy changes that lack legal or scientific basis or would increase harmful air pollution that contributes to health and environmental concerns to the public.”
The oil industry has fought the RFS for years as a costly burden. When an independent refinery in Philadelphia went bankrupt last winter, the industry said it was proof of the high costs of blending ethanol or buying credits, called RINs, to comply with the RFS.