Played for suckers on ethanol, top Iowa Republicans still covering for Trump

Governor Kim Reynolds and U.S. Senators Chuck Grassley and Joni Ernst praised President Donald Trump in October, when the administration gave assurances corn growers and the ethanol industry would get what they wanted from the Environmental Protection Agency’s 2020 Renewable Fuel Standard (RFS) guidelines. The governor and senators were among Midwest Republicans who had lobbied Trump on the issue in September.

When the final rule released this week didn’t match the promises, biofuels advocates slammed Trump for not keeping his word to farmers. But top Iowa Republicans let the president off the hook by shifting the blame to the EPA.

ALL CREDIT TO TRUMP IN OCTOBER

Corn growers and ethanol producers have been seeking new rules that would increase demand for ethanol, to compensate for exemptions the EPA has granted to many oil refineries. Whether the ethanol industry’s problems stem primarily from federal policies or from excessive production is a matter for debate among the experts. But for Iowa’s political class, the matter is settled and the EPA is to blame.

Trump seemed receptive to pleas from Grassley, Ernst, Reynolds, and others in September. So when the EPA and U.S. Department of Agriculture appeared to go along with the plan to help the biofuels industry, Republican politicians gave Trump credit for the draft agency rule. From a Reynolds news release on October 4:

By protecting the RFS, President Trump demonstrated his commitment to rural America and the American farmer [….] we appreciate President Trump’s willingness to listen and work with this industry. It is clear, this President remains committed to America’s farmers.

Grassley’s news release that day was titled, “Trump delivers for Iowa, Farmers, and Biofuels Producers.” Excerpts:

“President Trump listened to the concerns of farmers and biofuels producers and delivered on their behalf. […]

“The president listened to all points of view and delivered. Small refineries can still apply for waivers while biofuels are able to blend the legally-required amount. […]

“President Trump has made clear that he is an ally of corn and soybean farmers as well as ethanol and biodiesel producers. He is fighting for the farmer. This announcement is great news for Iowa, the Midwest and the entire country.”

The same day, Ernst “applauded” the president “for acting to ensure the RFS is upheld,” adding that Trump “is following through on his commitment to our nation’s hardworking farmers and biofuels producers.”

ALL BLAME TO THE EPA IN DECEMBER

Corn growers and biofuels advocates thought they had won the battle, but less than two weeks later, the EPA proposed a formula that would favor oil refineries seeking exemptions from ethanol blend rules. The final RFS rule for 2020, published on December 19, is missing what Grassley called “magic words” relating to “hard data and actual waived gallons.”

An Iowa Corn Growers news release claimed farmers had been “Cheated out of a Good Farm Economy Due to RFS Abuse” and made clear the buck stops in the Oval Office: “Apparently President Trump doesn’t care about his promise to Iowa’s farmers. He had the opportunity to tell his EPA to stick to the deal that was made on October 4.”

Similarly, Iowa Renewable Fuels Association executive director Monte Shaw said in a statement,

President Trump turned his back on certainty for farmers and failed to keep the September 12 deal [….] Every farmer and biofuel supporter I have talked to is deeply disappointed, frustrated, and quite frankly angry. I don’t think the White House truly understands the depth of discontent in farm country.

In contrast, the politicians pointed the finger at EPA leaders. From Ernst:

A similar song from Grassley:

In their joint news release, Ernst said, “I believe President Trump wants to do right for the biofuels community.” Grassley faulted the EPA for “playing games and not helping President Trump with farmers.” Agency administrator Andrew Wheeler “has put the president in a bad situation by not following the law as intended by Congress and as the president has promised to uphold,” Grassley added, saying Trump’s support among farmers is in [Wheeler’s] hands.”

Reynolds too pretended to believe Trump had nothing to do with this unfortunate decision, saying in a written statement,

EPA’s actions continue to disappoint and it’s understandable why they have lost credibility with the people of Iowa [….] I appreciate the President’s continued engagement on this issue and I will continue to fight for renewable volumes that align with federal law, support our farmers and our state’s economy. EPA Administrator Wheeler should know we are not done holding him to the agreement we reached with President Trump in the Oval Office on September 12th.

This idea that Trump wanted to do the right thing but was thwarted by Wheeler (whom he appointed and Grassley and Ernst confirmed) is a classic example of what Xavier Marquez has called the “good tsar bias.” Marquez sees the mental mistake as a way to resolve cognitive dissonance: an admired leader surely wouldn’t tolerate some bad outcome, so subordinates must be responsible.

But everyone knows the EPA wouldn’t make a high-profile decision like this without running it by the White House. So absolving Trump is not likely to be a psychological lapse by Iowa’s senators and governor.

While the corn growers and ethanol producers state plain facts, the politicians look afraid to stir up trouble with the president, for fear of a public scolding from him or backlash from his intensely loyal Republican base.


Appendix: Full statements from Iowa politicians and organizations regarding the EPA’s Renewable Fuel Standard rule.

Joint news release from Grassley and Ernst, December 19:

WASHINGTON—U.S. Senators Joni Ernst (R-IA) and Chuck Grassley (R-IA), tireless advocates for Iowa’s renewable fuels industry, issued the following statements with regard to the U.S. Environmental Protection Agency’s (EPA) final rule to establish the required renewable volumes under the Renewable Fuel Standard (RFS) program for 2020, and the biomass-based diesel volume for 2021:

“Throughout this process, I, along with Senator Grassley and Governor Reynolds have made it crystal clear that Iowa’s farmers and biofuel producers need certainty that EPA will follow the law. After shaking hands in the Oval Office this fall, EPA had an opportunity to restore the broken trust of farmers and to follow through on the president’s commitment, but it appears they’ve missed the mark…again. We were guaranteed a deal in September, and we were assured of that same deal in October, yet EPA rolled out, and has now finalized, a different proposal. It’s no wonder trust has been lost,” said Senator Ernst.

“While I’m hopeful we get to the 15 billion or more gallons of ethanol that we’ve been promised, I clearly understand the hesitation from Iowans to trust the word of EPA to actually follow through on that commitment. I believe President Trump wants to do right for the biofuels community – we’ve seen that with E15 year-round and most recently the biodiesel tax incentive. But Administrator Wheeler should know: this is not the end. I will continue to fight tirelessly to make sure that my fellow Iowans have a seat at the table when it comes to renewable fuels. We will keep holding EPA’s feet to the fire to ensure they truly uphold the RFS, the law, as intended and fully implement the other critical aspects of this rule,” said Ernst.

“Once again, EPA is playing games and not helping President Trump with farmers. An agreement was reached on September 12 in an Oval Office meeting between several Midwest leaders, President Trump and other members of his Administration. This does not reflect what we agreed to in that meeting. Simply requiring that the three-year rolling average be based on hard data and actual waived gallons rather than Department of Energy recommendations and EPA discretion would solve this problem and ensure the renewable volume obligations are met. Administrator Wheeler has put the president in a bad situation by not following the law as intended by Congress and as the president has promised to uphold,” said Senator Grassley.

“No matter what EPA says about the impact of its waivers to oil companies making billions in profits, farmers and biofuels producers know and feel the negative impact of the agency’s actions. I will hold EPA’s feet to the fire to make certain they abide by the Department of Energy’s recommendations and ensure integrity in the RFS. Whether that happens is up to Administrator Wheeler and the president’s support among farmers is in his hands,” said Grassley. “The magic words from the Oval Office meeting were three-year rolling average based on hard data and actual waived gallons. Abiding by this would have solved all the problem’s EPA has created.”

Background:

Senator Ernst is the lead sponsor of S.1840, the Renewable Fuel Standard (RFS) Integrity Act of 2019. The bipartisan legislation would ensure EPA properly accounts for exempted gallons in the annual renewable volume obligations (RVO) it sets each November.

Senator Ernst worked closely with the Trump Administration, specifically EPA, to remove the outdated restriction on the sale of E15 year-round. In May of this year, the EPA finalized a new rule lifting the ban, and the Senator joined President Trump in Council Bluffs, Iowa to celebrate the big win for Iowa farmers and producers.

The Senator has urged EPA to stop issuing so-called “hardship” waivers exempting obligated parties, to provide topline information about the waivers already issued, to disclose whether or not the agency redistributed the waived volume obligations among the non-exempted obligated parties, and to outline the agency’s plan to make the waiver process more transparent.

For five years in a row, Growth Energy, who is a leading biofuels trade association in the country, have presented Senator Ernst with the “Fueling Growth Award,” for her work to get E15 sold year-round and her constant efforts to advance, support, and defend renewable fuels and the RFS as a whole.

Statement from Ernst on October 4:

RED OAK, Iowa—U.S. Senator Joni Ernst (R-IA), chairman of the Senate Agriculture Subcommittee on Rural Development and Energy and member of the Senate Environment and Public Works Committee, released the following statement regarding the Trump Administration’s announcement on the Renewable Fuel Standard (RFS):

“This is great news for Iowa and rural America. President Trump is following through on his commitment to our nation’s hardworking farmers and biofuels producers.

“The RFS is essential to the livelihoods of folks across our state, which is why I’ve been fighting tirelessly on behalf of Iowa’s farmers and producers every step of the way and making Iowans’ voices heard throughout this process. Our message was clear: uphold the RFS—15 billion means 15 billion.

“The president heard that message and has acted on it. The steps outlined today by the administration will help increase demand for our biofuels, provide certainty for farmers and producers for years to come, and ensure that EPA is implementing the RFS as it was written.”

Background:

Senator Ernst has been a consistent and tireless advocate and fighter on behalf of Iowa’s biofuels industry. She has continued to advocate for the administration to uphold the RFS.

On Monday [September 30], Senator Ernst spoke directly by phone with President Trump, Vice President Mike Pence, and EPA Administrator Andrew Wheeler, specifically on this topic and this announcement. This was one of many conversations Senator Ernst has had with President Trump and administration officials over the past several weeks to make sure Iowans’ voices are heard on this issue.

Senator Ernst is the lead sponsor of S.1840, the Renewable Fuel Standard (RFS) Integrity Act of 2019. The bipartisan legislation would ensure EPA properly accounts for exempted gallons in the annual renewable volume obligations (RVO) it sets each November.

Senator Ernst worked closely with the Trump Administration, specifically EPA, to remove the outdated restriction on the sale of E15 year-round. In May of this year, the EPA finalized a new rule lifting the ban, and the Senator joined President Trump in Council Bluffs, Iowa to celebrate the big win for Iowa farmers and producers.

The Senator has urged EPA to stop issuing so-called “hardship” waivers exempting obligated parties, to provide topline information about the waivers already issued, to disclose whether or not the agency redistributed the waived volume obligations among the non-exempted obligated parties, and to outline the agency’s plan to make the waiver process more transparent.

For two years in a row, Growth Energy, who is a leading biofuels trade association in the country, have presented Senator Ernst with the “Fueling Growth Award,” for her work to get E15 sold year-round and her constant efforts to advance, support, and defend renewable fuels and the RFS as a whole.

Statement from Grassley on October 4:

WASHINGTON — Sen. Chuck Grassley (R-Iowa), a family farmer and member of the Senate Agriculture Committee, today released the following statement regarding President Trump’s announcement on biofuels and the Renewable Fuel Standard (RFS).
“President Trump listened to the concerns of farmers and biofuels producers and delivered on their behalf.
“This has been a long discussion between the Administration, fellow members of Congress and representatives of the biofuels and oil industries. It’s an issue I heard about frequently at my annual 99 county meetings. Along with Governor Reynolds, Senator Ernst and several other Midwest senators, I was glad to represent Midwest farmers at the White House to convey to the president what farmers had on their minds.
“The president listened to all points of view and delivered. Small refineries can still apply for waivers while biofuels are able to blend the legally-required amount.
“This plan will fix EPA’s exemption process and help farmers and biofuels producers going forward. The solution outlined by President Trump, Administrator Wheeler and Secretary Perdue is exactly how the RFS is meant to function according to the law as written by Congress. The RFS has a built-in mechanism to make up for waived volumes in advance and EPA will be implementing the law as intended.
“Maintaining the integrity of the RFS, repealing WOTUS and allowing year-round sales of E15 will all help American agriculture and the rural economy. These are promises made and promises kept by President Trump.
“President Trump has made clear that he is an ally of corn and soybean farmers as well as ethanol and biodiesel producers. He is fighting for the farmer. This announcement is great news for Iowa, the Midwest and the entire country.”
Grassley has been a steadfast advocate for ethanol, biodiesel and other environmentally-friendly alternative energies throughout his time as a U.S. senator. Grassley has also been a leader in working with the Trump administration to approve and implement E15 for year-round sales and continues fighting for increased market access through trade to help farmers.

Statement from Governor Kim Reynolds on December 19:

“EPA’s actions continue to disappoint and it’s understandable why they have lost credibility with the people of Iowa,” said Gov. Reynolds. “While we agree on the end goal of 15 billion gallons, this final rule allows those numbers to be too easily disregarded. And even more important, it’s already negatively impacting the lives of Iowans as biofuels plants are closing and our farmers are losing an important market. I appreciate the President’s continued engagement on this issue and I will continue to fight for renewable volumes that align with federal law, support our farmers and our state’s economy. EPA Administrator Wheeler should know we are not done holding him to the agreement we reached with President Trump in the Oval Office on September 12th.”

Statement from Reynolds on October 4:

DES MOINES – Gov. Kim Reynolds released the following statement today after President Donald Trump announced an ethanol deal with the United States Department of Agriculture (USDA) and the Environmental Protection Agency (EPA) to replace the lost biofuel from small oil refinery exemption waivers (SREs):

“A robust renewable fuel standard is critical to a healthy ag economy in Iowa and across the nation. We are grateful to President Trump for honoring the federal statute to blend 15 billion gallons of ethanol annually, and allowing existing E10 pumps to deliver E15 fuel, helping drive domestic demand for biofuels. By protecting the RFS, President Trump demonstrated his commitment to rural America and the American farmer.

“Today’s announcement is a reflection of the strong, united front from the renewable fuels industry as well as strong leadership from Senators Chuck Grassley and Joni Ernst. The President clearly heard us when we said 15 billion gallons means 15 billion gallons, and this deal proves it.

“We will never stop fighting for the renewable fuels industry because of its central role in our economy and we appreciate President Trump’s willingness to listen and work with this industry. It is clear, this President remains committed to America’s farmers.”

Iowa Corn Growers news release, December 19:

Iowa Corn Farmers Cheated out of a Good Farm Economy Due to RFS Abuse

The abuse of the Renewable Fuel Standard (RFS) continues as the Environmental Protection Agency (EPA) released today the final 2020 Renewable Volume Obligation (RVO) that does not reflect the deal President Trump agreed to on October 4, 2019.  The finalized rule incorporates the Wheeler plan that merely estimates future small refinery waivers based on the Department of Energy’s (DOE) recommendations. ICGA supports a simple, mathematical solution by averaging the past three years of actual waivers granted, then adding those gallons back into the RFS. ICGA’s supported resolution would have created market certainty, so as not to rely on the EPA or DOE Administrators for their annual decisions.

“Apparently President Trump doesn’t care about his promise to Iowa’s farmers. He had the opportunity to tell his EPA to stick to the deal that was made on October 4,” said ICGA President Jim Greif. “I can say for certain that ICGA pushed for a positive outcome, and we didn’t go down without a fight.”

“The Environmental Protection Agency seems to be more concerned with politics than cleaner-burning, healthy air with renewable fuels. It was as simple as following the original October 4 agreement with our elected officials and here we are with empty promises and no market certainty,” said Kelly Nieuwenhuis, ICGA member from Primghar and Chair of the Iowa Corn Industrial Usage and U.S. Production committee.

During the comment period for the supplemental rule, ICGA sent out two calls to action with one directed at the EPA and the other at the President. Altogether the calls to action gathered over 1,000 farmer comments. Additionally, ICGA held a press conference along with other biofuels groups, worked with our entire delegation of public leaders, as well as attended roundtables, townhall meetings and EPA’s public hearing in Ypsilanti, MI. The final push was a meeting by ICGA with the Director of the U.S. National Economic Council, Larry Kudlow, at the White House earlier this week.

ICGA extends a thank you to each Iowa Corn member, farmer, ethanol supporter, and our public officials who have worked diligently together with Iowa’s corn farmers to maintain the critically important RFS.

“On behalf of Iowa Corn Growers Association members, we are frustrated with this lack of interest in defending markets for ethanol and renewable fuels. ICGA will not stop fighting for market access for corn in all forms,” said Greif.

Iowa Renewable Fuels Association news release, December 19:

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Rule Finalized by EPA Today Fails to Restore RFS Integrity

JOHNSTON, IOWA – Today the EPA released the final Renewable Fuels Standard (RFS) rule setting blend levels for 2020. Included in the rule was a provision intended to fulfill President Donald Trump’s commitment to ensure blend levels are met by stopping demand destruction caused by small refinery exemptions (SREs). Unfortunately, the final rule fails to do this in a way that creates market certainty, instead leaving EPA leeway to undercut the RFS levels in the future.

“President Trump turned his back on certainty for farmers and failed to keep the September 12 deal,” stated Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw. “Instead of certainty, we are essentially being told to trust the EPA to uphold the RFS in the future even though for the past three years the EPA has routinely undermined the program. Every farmer and biofuel supporter I have talked to is deeply disappointed, frustrated, and quite frankly angry. I don’t think the White House truly understands the depth of discontent in farm country.”

In order to remove EPA discretion from the process, biofuels supporters united behind a plan to account for SREs using a three-year rolling average of actual refinery exemptions granted. President Trump agreed to this plan in a September 12 Oval Office meeting with Midwestern elected officials, including Iowa’s Governor and Senators. Today, however, President Trump sided with EPA’s alternative plan which relies on using a three-year rolling average of U.S. Department of Energy (DOE) recommendations for SREs, which EPA has routinely ignored and is under no legal obligation to follow.

Shaw continued: “Under today’s rule, stated RFS levels will only be truly met if EPA adheres to DOE’s recommendations for SREs and does not grant additional SRE volumes as they have done in the past. Therefore, the market will not know for sure what the effective RFS blend levels are until after SREs are adjudicated months after a compliance year is over.”

Given the elevated impact of DOE’s recommendations going forward, today IRFA sent a letter to EPA asking the agency to shed light on the “black box” SRE review process.

“IRFA today called upon the EPA to immediately post DOE recommendations – past, present and future – on their SRE website dashboard,” stated Shaw. “Market participants must have faith in the process and must know whether or not EPA is following the DOE recommendations. Further, to prevent any entity from gaming the system, this information should be made public to all market participants at the same time. In just a few months, EPA will begin adjudicating the 2019 compliance year SREs. It will be their first opportunity to demonstrate good faith and we’ll be watching very, very closely.”

Click here to see IRFA’s full letter to the EPA.

While the focus during the past few weeks has been on accounting for SREs in the RFS rule, there were several other important provisions agreed to by President Trump during the September 12 meeting to help offset the demand destruction caused by SREs. President Trump committed the EPA to initiate a rulemaking process to streamline labeling and remove other barriers to the sale of E15. He also directed USDA to consider infrastructure projects to facilitate consumer access to higher biofuel blends.

“Accounting for SREs was just one facet of the deal President Trump made with our elected champions,” added Shaw. “And even as we believe today’s announcement falls short of a true SRE fix, we fully expect President Trump to live up to the remaining promises made on September 12. IRFA intends to work with our elected champions to ensure there is expeditious implementation of President Trump’s ‘giant package’ that includes improvements in E15 regulations and infrastructure funding.”

Shaw called upon all Iowans to thank the state’s elected officials for leading the effort to restore integrity to the RFS and to repair the economic harm done by SREs.

“While it was a multistate effort, Iowa’s elected officials were continuously at the forefront of the fight,” Shaw concluded. “Their dedication and effort during this fight was a credit to the hard work ethic made famous by the farmers they were supporting. This battle is over, but the war continues. And Iowans won’t stop fighting until the RFS is fully enforced and every consumer from coast to coast has access to ethanol and biodiesel blends.”

The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 43 ethanol refineries capable of producing over 4.5 billion gallons annually – including 34 million gallons of annual cellulosic ethanol production capacity – and 11 biodiesel facilities with the capacity to produce nearly 400 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: www.IowaRFA.org.

U.S. Representative Abby Finkenauer told the Dubuque Telegraph-Herald, “I cannot overstate how disrespectful it feels to watch other leaders in our state continue to make excuses for this administration and this president, putting it all solely on the EPA when it is this president’s EPA,” adding, “These are decisions that have come down from the top. This president has not been a friend to renewable fuels.” She also called out Grassley on Twitter.
Statement from Representative Dave Loebsack (IA-02), December 19:

Washington, D.C. – Congressman Dave Loebsack, co-chair of the House Biofuels Caucus, released the following statement after the Environmental Protection Agency (EPA) issued its final rule for 2020 Renewable Fuel Standard (RFS) blending requirements. The final rule does nothing to address the misuse of Small Refinery Exemptions (SREs) and reneges on the President’s promise made to Iowa farmers in September to account for SREs using actual waived gallons, not DOE recommendations.

“The final RFS rule set forth by the EPA by is another slap in the face to Iowa’s farmers and ethanol producers. It does nothing to stop the vast misuse of the small refinery exemptions, which only serves to erode the RFS and destroy demand for clean, renewable fuel, like ethanol. From Trump’s Twitter Trade War to his continuing to side with big oil over our farmers, this is just another in a long list of attacks on our rural communities by this administration. I will continue to stand up for our farmers and producers and fight to restore the integrity of the RFS.”

Background

Representative Loebsack has been a longtime supporter of the RFS, ethanol and the biofuels industry. He has been leading the way in the House to increase oversight and transparency of the Small Refinery Exemption that the Administration has used to undermine the RFS, hurting our farmers and rural communities, while propping up Big Oil. As co-chair of the House Biofuels Caucus, Loebsack helped lead the opposition of the excessive use of the SRE, including this August when the President and EPA granted 31 new waivers. As a member of the House Energy and Commerce Committee, Loebsack secured an oversight hearing this fall examining the Trump Administration’s abuse of SREs and considering legislation he helped introduce, H.R. 3006, the Renewable Fuel Standard Integrity Act, which would help bring greater transparency to the use of SREs.

Statement from Representative Cindy Axne (IA-03), December 19:

“The EPA’s announcement today is unacceptable, but sadly not unexpected. After years of abuse of small refinery exemptions, this administration had a chance to do right by farmers, but instead it doubled down on undermining the RFS and hurting Iowa.

Iowa farmers and producers have taken it on the chin this year, with ongoing uncertainty and escalating tariffs from this administration’s trade war. Now is not the time to be undermining the foundation of our state’s economy. Iowans deserve better.”

  • Other objective attained

    I think Grassley and the other two are just making lemonade out of the lemons they have been handed. This decision offers yet another opportunity to bash the EPA. They are always happy to do that. Since the Endangered Species Act first got in the way of resource exploiters, the EPA has been in their cross hairs. After Trump is gone, the long campaign to discredit the EPA will keep returning dividends.

    • That last sentence is so true...

      …and the anti-EPA campaign is part of the larger campaign to discredit science and discredit reality itself.

      As just one example, it has been pointed out many times that the massive flooding of the Missouri River this year was not caused by Army Corps management, because so much of the water came from tributaries of the river that the Corps does not control. But that reality hasn’t stopped the political campaign to blame endangered species and the Corps for the flooding, and to pretend that if we just finish pushing the river’s endangered species into extinction, we’ll be able to farm the flood plain happily ever after. Because climate change is a Chinese conspiracy.

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