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Expansion of Summertime Ethanol Sales Struck Down in Court Ruling

Late last week, Wall Street Journal writer Timothy Puko reported that, “A federal appeals court Friday struck down a 2019 rule-change to expand summertime ethanol sales, saying the Trump administration overreached its authority when it lifted a ban on gasoline with a higher ethanol content.

The decision is a loss for corn farmers who have come to rely on ethanol sales for a large part of their revenue.

“They had aggressively lobbied President Trump to have the Environmental Protection Agency allow for a summertime expansion of the fuel in 2019, in part because it was one of the few options for growing ethanol sales.

“U.S. Domestic Corn Use.” USDA- Economic Research Service. Chart Gallery (July 2, 2021).

Friday’s ruling may leave the ethanol lobby with little to show from four years of advocacy from Mr. Trump. It fully throws out a deal that the Trump administration had framed as its compromise between refiners and farmers, two big Republican allies that have long fought over federal mandates for adding corn-based, or ‘renewable fuel,’ to gasoline. And the ruling is the second federal-court decision in roughly a week to undo an Trump EPA effort that intended to boost ethanol sales.”

The Journal article explained that, “In that first decision, issued June 25, the Supreme Court had allowed small petroleum refineries to obtain exemptions. Iowa farmers had appealed directly to Mr. Trump to more closely limit those exemptions, making it central to his reelection campaign in a swing state.

“Friday’s decision came from a three-judge panel on the U.S. Court of Appeals for the District of Columbia Circuit, which said the EPA had improperly reinterpreted legal language in the Clean Air Act long understood as limiting ethanol to 10% of the content of gasoline during four summer months. Once the court undid that decision, it said the rest of the rule was moot, overturning other parts of the package intended to help refiners as well.”

Associated Press writer David Pitt reported on Friday that, “Ethanol supporters could ask the full D.C. Circuit Court to review the decision of the three-judge panel. They also could ask Congress to change the law to allow for year around E15 sales.”

Meanwhile, Reuters writers Stephanie Kelly and Jarrett Renshaw reported last week that, “U.S. lawmakers introduced a bill on Friday to limit exemptions offered to refiners on blending biofuels, after sources said the Environmental Protection Agency chief voiced disapproval about a Supreme Court ruling upholding broad use of the waiver program.

“Republican Congressman Randy Feenstra of Iowa and Democrat Congresswoman Angie Craig of Minnesota introduced a bill to restrict the EPA’s ability to grant waivers, after the Supreme Court overturned a lower court decision that had imposed limits.”

The Reuters article added that, “Lawmakers in farming states have pressed the U.S. administration to uphold mandates requiring refiners to blend biofuels. The EPA is expected to make a decision soon on the amount of biofuels refiners must blend during 2021 and 2022.

“Democrat lawmakers met EPA chief Michael Regan on Tuesday after reports that the administration was considering giving relief to refiners from the mandates. Craig, Iowa’s Cindy Axne, and Cheri Bustos and Lauren Underwood from Illinois were among those in the meeting.

“Sources said Regan told them he disapproved of the Supreme Court ruling and said a decision on how much biofuel refiners would be required to blend was expected in the next few weeks, although he did not give them details.”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily 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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