White House delays ethanol plan
June 6, 2018
President Donald Trump has indefinitely delayed its proposal to deal with the conflict between the biofuels industry and the oil industry after protests from Sens. Charles Grassley and Joni Ernst, both Iowa Republicans, and former Sens. Jim Talent, R-Mo., and Rick Santorum, R-Pa., said Tuesday that the plan appeared to be a bad idea for the renewable fuel industry and for rural America.
Grassley and Ernst both tweeted that Trump had scuttled the deal, The Hill reported.
Agriculture Secretary Sonny Perdue has worked with Environmental Protection Agency Administrator Scott Pruitt on the agreement, but Perdue declined to discuss it Tuesday, saying he would leave any statement up to the White House.
Earlier, Ernst had said that even though Donald Trump promised on the campaign trail to defend the Renewable Fuel Standard as president, he seemed likely to go along with a plan to approve year-round sales of E15, or gasoline blended with 15 percent ethanol, and allow ethanol exports to receive Renewable Identification Numbers, Platts reported.
The biofuels industry has said that it favors year-round E-15 but that allowing ethanol exports to get RINs would negate the positive side of the proposal.
Grassley told reporters on Tuesday that he wants the Trump administration to carry out the congressional intent of the law to require that the gasoline supply contain 15 billion gallons of ethanol per year, but believes the White House plan "may fall far short of promises made to Midwestern farmers and the ethanol industry."
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Grassley said it would be very difficult for Congress to counter what the Trump administration was planning, but blamed an "iron triangle" of the oil industry, certain senators and the "permanent bureaucracy" at EPA for creating the situation.
"This is a case where the president is being ill-served by political appointees who are not carrying out his agenda," Grassley said. Grassley has threatened to call for Pruitt to resign, but said Tuesday he would not decide whether to issue that call until after the White House releases its plan.
Grassley said he does not think there would be any point for him to meet with Trump again.
"I think I have met with President Trump all I can to make my point clear," Grassley said during the phone call to reporters. He also noted that he met with Pruitt after he was nominated and has met with him again both inside and outside the White House, and each time they have met Pruitt has said "everything is going to be worked out."
Grassley noted that the oil industry wanted ethanol in 2005 and 2006, when it was under pressure to find another oxygenate because the one in use was poisoning water in California. Now the oil industry, which Grassley calls Big Oil, wants to kill the Renewable Fuel Standard because they want to kill anything "they don't control."
Talent and Santorum, who co-chair Americans for Energy Security and Innovation, a pro-ethanol group, said that Pruitt wants to dismantle the RFS through continued waivers and export credits.
"News reports and polls show that rural voters are watching, waiting and hoping. President Trump and GOP leaders in congress cannot afford to let them down," the two former GOP senators said.
"Refiners can already blend ethanol for free or purchase credits at bargain-basement prices. Unlike America's farmers, their profits are soaring. The EPA plan protects waivers for oil companies while keeping a low-cost E15 off the market for another summer, just as gas prices spike. Worse, a refinery-backed export gimmick would actually subsidize fuel for drivers overseas. The proposal is not only an insult to U.S. farmers, it threatens to put American jobs in the crosshairs for the next round of retaliatory tariffs," the senators said.
"Secretary Sonny Perdue has joined lawmakers from across the Midwest in calling for an end to the regulatory gimmicks, but Administrator Pruitt seems to be ignoring appeals from rural America," they added. "If the White House disagrees, the time to act is running out."