Trump’s Biofuel Plan Triggers Fallout in U.S. Farm Country

March 09, 2020

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by Jennifer A Dlouhy (Bloomberg) Appeal would be ‘a stunning betrayal’ of farmers, groups warn; Move allows EPA to keep waiving refineries from biofuel quotas -- President Donald Trump’s decision to defend the U.S. government’s power to broadly exempt oil refineries from biofuel-blending requirements is triggering a backlash in Iowa and other states that are top producers of ethanol and the corn used to make it.

Nine biofuel and agriculture advocacy groups bluntly warned of possible political repercussions eight months before Election Day. If the administration follows through with plans to appeal a court ruling that invalidated three refinery waivers, it “would be viewed as a stunning betrayal of America’s rural workers and farmers,” the Renewable Fuels Association, National Farmers Union, National Biodiesel Board and other organizations said in a joint statement.

“We cannot stress enough how important this decision is to the future of the rural economy and to President Trump’s relationship with leaders and voters across the heartland,” they said.

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An appeal would be a victory for oil companies and their Capitol Hill allies, who argued the waivers are essential to preserve the economic health of refineries and their blue-collar jobs, especially amid a coronavirus-spurred slump in demand for their petroleum-based products. Oil industry advocates raised the specter of job losses and plant closures in Wyoming, Texas and the political battleground state of Pennsylvania.

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“Trump is on the verge of outraging every farm and biofuel group in the country,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. “We could have had a fairly uneventful year for RFS policy heading toward November, but this action would seriously threaten Trump’s reputation in rural states.”

Oil industry advocates have argued that anything less than an appeal would be legal malpractice because the 10th Circuit’s ruling clashes with federal law that says refineries may seek relief “at any time,” conflicts with longstanding EPA practice and is at odds with a separate ruling by the 4th Circuit. A separate challenge of other refinery waivers is also pending in the D.C. Circuit Court of Appeals.

Analysts stressed an appeal is not universally bad news for biofuels, with Height noting it sets the stage for the EPA to scale back refinery relief this spring, by issuing partial waivers instead of complete exemptions. “In the president’s impossible but never-ending quest to find a win-win solution on the RFS, partial 2019 waivers would seem to be a modest concession to farm country for the appeal,” Height said in a research note for clients on March 6. READ MORE

Barrasso cheers Trump admin plan to fight ruling on waivers (E&E News)

Trump to Appeal RFS Waivers Ruling--Reports: Trump Administration Set to Appeal Court Decision on Small-Refinery Exemptions (DTN Progressive Farmer)

Reports: White House to appeal RFS decision (Fence Post)

Iowans slam reported plan by Trump administration to appeal ruling against ethanol exemptions (Des Moines Register)

Ernst “Blindsided” By New Trump Ethanol Move, Blames Cruz (Iowa Starting Line)

Talent: President Trump has a lot at stake over EPA appeal support (Iowa AgriBusiness Radio Network; includes AUDIO)

Grassley to ramp up pressure after ruling on waivers (E&E News)

Ag Policy Blog: Grassley Appeals to Trump to Let RFS Ruling Stand (DTN Progressive Farmer)

Biofuel supporters warn of political fallout from SRE appeal (Agri-Pulse)

BIOFUELS ADVOCATES SEND MESSAGE AS TRUMP MULLS 10TH CIRCUIT SRE APPEAL (Brownfield Ag News)

Pushing Back on RFS Appeal: Biofuel Backers Want President to Defend Court Ruling on Small-Refinery Exemptions (DTN Progressive Farmer)

Advocating for the biofuel industry: Farmers and biofuel reps urge President Trump not to appeal federal court ruling (Farms.com)

Farm, biofuels leaders urge Trump Administration to uphold renewable fuels promises (KMALand)

Rural leaders urge Trump to uphold court’s ruling on SREs (Ethanol Producer Magazine)

Rural Leaders Urge Trump to Support Farmers (AgWired)

Iowa’s governor, farmers urge Trump to let pro-ethanol court ruling stand (RadioIowa)

Wyoming's small oil refineries battle for hardship relief (Caspar Star Tribune)

Oil industry push for Trump bailout draws political headwinds (Politico)

Excerpt from Iowa Starting Line: “This blindsided us,” Ernst said in response to a question about the news at a town hall forum in Jefferson, Iowa.

The senator noted she had spoken briefly with Trump today, and she confirmed that his administration planned to appeal.

“What happened, the way I understand it, was Ted Cruz went to the White House,” Ernst explained. “Somehow he ended up bending Attorney General Barr’s ear on this. And the purpose of their visit was immigration, it wasn’t supposed to be renewable fuels. So, he ended up talking to A.G. Barr and convincing him they needed to go back.”

Ernst said she had been playing phone tag with Trump since last night, and talked with him earlier today while he was in a helicopter touring tornado damage in Tennessee. It was a quick conversation, Ernst said, and he planned to call her back later today.

“He said they are getting pressure from folks like Ted Cruz, other representatives in those oil states, because they’re afraid that the small refineries are going to shut down now,” Ernst said. “Well, we are afraid, and we know, that those that are producing biofuels, our ethanol producers, they already saw this last summer. So, that’s what we’re communicating to the president.”

While Trump was moving forward with an appeal, which Ernst believed they had until Monday to file, Ernst said the President tried to downplay the impact.

“They do plan to proceed with the appeal. I’ve looked at the statistics … It’s only a fraction, a very, very small percentage of appeals that will actually be taken up and reconsidered,” Ernst said. “And out of those that are reconsidered, most of them will not be overturned. So, the President, his point to me was, Joni, it’s not going to be overturned. It’s not going to be overturned. And this way, let Ted Cruz and the oil buddies feel good about what they are doing, but he said it’s not going to be overturned.”

As Bloomberg News has reported, Trump’s administration had planned on accepting the court decision as recently as last week. But the matter of biofuels during the Trump presidency has been beset by constant lobbying efforts by oil state senators, often causing Trump to go back on his previous word or with deals he had struck with Iowa leaders.

“I hope to God it’s not overturned,” Ernst said. “The oil industry, they’re not even sneaky about what they’re trying to do. I’ve always said this …. when we score a win, we still have to be vigilant. Because they’re always going to be lurking around, ready to throw something in the President’s ear, mislead him. I think that’s what they’ve done: mislead him.” READ MORE

Excerpt from Farms.com: If the federal government decides to challenge the court ruling, it could hurt farmers and the rural economy.

“Make no mistake, this decision could derail the rural recovery at a time when we’re already struggling to maintain a razor-thin profit margin,” Dave Walton, a soybean producer from Wilton, Iowa, said on the conference call. “Many of my fellow producers are running in the red and have been for a couple years.”

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With the upcoming presidential election in November, President Trump’s handling of this situation may play a role in his possible re-election, Walton said.

“Farmers feel like they’re being supported by the president and the president has a good opportunity here to prove that support,” he said. “Here’s a perfect opportunity to increase domestic demand (for soybeans) via biodiesel and make an immediate impact on the price received.

“I think farmers are watching and know the issues pretty well. If this comes down to farmers versus oil companies, farmers are going to remember that in November.” READ MORE