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Farm State Lawmakers Maintain that Court’s RFS Waiver Decision Should Stand

DTN Ag Policy Editor Chris Clayton reported last week that, “Sen. Chuck Grassley, R-Iowa, stressed to reporters Tuesday morning [March 10th] that President Donald Trump would benefit in rural America if he simply let stand the 10th Circuit Court of Appeals decision last month against EPA’s small refinery exemption program.

“It’s no surprise Grassley, one of the ethanol industry’s most ardent defenders in Congress, would encourage Trump and his administration not to appeal the court ruling, which was a major victory for the ethanol industry against petroleum’s push to reduce the mandates of the Renewable Fuels Standard.”

The DTN article explained that, “After hearing last week the administration could appeal the 10th Circuit decision, Grassley said he reached out to several ‘high-level’ officials.

He made the point that farmers and others in ethanol industry remain skeptical over whether the administration is really serious when it comes to the Renewable Fuels Standard and the promised 15 billion gallons of blend volume.

“Grassley also said fellow Iowa Sen. Joni Ernst also called President Trump ‘urging him to not let his EPA appeal. By not appealing, he would simply be following the law and the president would reduce the skepticism that people have about [EPA Administrator Andrew Wheeler] going along with what the court case said, and what we agreed to back in September.'”

The DTN article stated that, “Ernst’s call helped, Grassley noted, as the administration chose to ask the courts for a two-week delay over whether to file an appeal or accept the court ruling. Still, Grassley defends the 10th Circuit ruling and said it should stand.”

Also with respect to the 10th Circuit RFS ruling, O. Kay Henderson reported last week at Radio Iowa Online that, “‘We don’t think they should appeal it,’ [Iowa Governor Kim Reynolds] said. ‘We think they should let it stand and that should be something that they implement nationwide.'”

Irwin, S. “2019 Ethanol Production Profits: Just How Bad Was It?.” farmdoc daily (10):16, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, January 29, 2020.

Meanwhile, Rachel Frazin reported last week at The Hill Online that, “Lawmakers on both sides of the aisle pressed President Trump’s pick for the No. 2 position at the Environmental Protection Agency (EPA) on a range of issues during an at times contentious Senate hearing Wednesday.

“Sens. Joni Ernst (R-Iowa) and Tammy Duckworth (D-Ill.) pressed Douglas Benevento about ethanol requirement exemptions for small refineries after a federal court ruled that the EPA would have to reconsider certain waivers.

“The EPA has the option to appeal the court’s decision.”

The Hill article added that, “‘Can you commit to me that the EPA will not grant any of these pending small refinery exemptions of 2019 until the legal action is settled?‘ Ernst asked during the Senate Environment and Public Works Committee hearing.

“Benevento said he would get back to her with a response.

“‘Our farmers and producers are tired of being yanked around by the EPA and again these illegal [exemptions],’ Ernst replied. ‘A number of these ‘small refineries’ are actually owned by much larger companies, oil companies like Exxon and Chevron.’

Ms. Frazin added that, “After the nominee similarly told Duckworth that he’d get back to her on whether the agency would temporarily stop issuing the waivers until the litigation is resolved, the senator said, ‘It’s an easy thing to say. Don’t grant any more waivers, since you’re going to be appealing this ruling, or if you’re not going to appeal the ruling, then you don’t need to grant any more waivers.'”

Also last week, DTN Ag Policy Editor Chris Clayton reported that, “Leaders from biofuel associations, along with corn and soybean farmers, on Wednesday cautioned that President Donald Trump risks his standing with farmers if his administration does not uphold a federal court ruling on the Renewable Fuel Standard and apply it nationwide.

“The call to stand by the RFS comes as ethanol producers are now facing more financial pressure with the recent collapse in oil prices, which could especially erode demand for corn as ethanol plants idle, ethanol producers said in a press call.”

And Reuters writer Stephanie Kelly reported on Thursday that, “U.S. ethanol producers are feeling the pain as margins on the corn-based fuel slumped this week to an eight-year low for this time of year, weighed by concerns over lower fuel demand from the coronavirus and the recent collapse in oil prices.”

The Reuters article stated that, “Because the United States requires ethanol to be blended into the nation’s fuel pool, gasoline consumption plays a role in demand for the corn-based fuel. With falling gasoline prices and lower expected gasoline demand, some market participants said it’s only a matter of time before ethanol plants decide to cut rates or shut.

“U.S. ethanol industry ‘bleeding’ on oil collapse, coronavirus,” by Stephanie Kelly. Reuters News (March 12, 2020).

“‘At least half of the industry is bleeding red ink right now,’ said Mitch Miller, chief executive of Carbon Green BioEnergy in Lake Odessa, Michigan.”

Keith Good

Keith Good

Keith Good is the social media manager for the farmdoc project at the University of Illinois. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily FarmPolicy.com News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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