Details of Trump’s ethanol plan disappointing
Three weeks ago the Independent reported that President Donald Trump’s administration announced an agreement to do more to protect the U.S. Renewable Fuel Standard. Vesta farmer George Goblish, who also sits on the Minnesota Corn Research and Promotion Council, was quoted as saying the plan was a “step in the right direction” for agriculture.
However, after details of the plan were finally released, many in the corn industry are having second thoughts.
The Renewable Fuel Standard program, created in 2005, requires refineries to blend a certain volume of renewable fuels like ethanol into petroleum-based fuels. However, starting with the 2013 compliance year, small refineries could petition the Environmental Protection Agency annually for an exemption from their Renewable Fuel Standards obligation. According to EPA data, the EPA received a total of 40 petitions for compliance years 2013-2015, and granted 23 of the petitions. The agency received a total of 99 petitions for compliance years 2016-2018, and granted 85 of them.
The bulk of those exemptions were granted for compliance year 2017, when 35 out of 37 petitions were granted, and compliance year 2018, when 31 out of 42 petitions were granted.
As it turned out, those exemptions had a negative impact for corn growers. U.S. Sen. Tina Smith said Trump’s recent plan only accounts for a fraction-less than half-of the gallons of biofuels that have been lost.
“People were kind of feeling hopeful when the President talked about this 15 billion gallon blend assurance, after what’s been a really cruddy year for corn producers and ethanol facilities-some of whom are literally going out of business,” said Sen. Smith in the Senate Agriculture Committee. “Just earlier this week, when this new proposal came out, people really felt like it was a bait and switch. I know you’ve worked a lot on this so I’ve got to ask you. What’s going on here?”
The American Farm Bureau agrees with Smith’s assessment.
“Many of the same groups that had applauded the administration’s RFS efforts were expressing consternation at the agency’s actual proposed plan,” the American Farm Bureau release said.
“The consensus among the industry is this plan did not reflect the original announcement to project SREs in future years by using a three-year average of past SRE allocations, and instead proposed weighting SREs by partial exemption recommendations made by Department of Energy scores – ultimately likely to reduce SRE projections and undermine the compromise between the biofuel and crude oil sectors weeks ago,” it also said.
We also agree with Smith that a strong renewable fuels standard is critically important to Minnesota corn and soybean farmers and is key to job creation in many rural communities.
Farmers, already struggling because of the weather and tariffs, don’t deserve what appears to be a “bait and switch.”