President Joe Biden and his administration have been proving time and again they’re not following the damaging economic policies of Donald Trump. That’s good for farmers.
The Environmental Protection Agency recently denied a petition by an oil refinery seeking an exemption from its obligations to mix cleaner-burning ethanol with its petroleum. It was the first denial of a new petition under the Biden administration, which has also recently reversed three exemptions approved by the Trump administration. Some 15 other petitioners have withdrawn their requests.
Those companies likely see the Biden administration following the letter of the law as part of the Clean Air Act and also a 10th Circuit Court ruling setting the parameters for exemptions.
When the Trump administration took over, it doubled and, in some years, quadrupled exemptions and the amount of gallons of ethanol refiners no longer had to blend.
“Our industry lost more than 4 billion gallons of demand due to the previous administration’s rampant abuse of the SRE program, and we are pleased to see that the days of EPA-induced demand destruction appear to be behind us,” said Renewable Fuels Association President and CEO Geoff Cooper in a statement.
The waivers were granted in large volumes during the Trump administration and farmers made those waivers an election issue.
In August 2019, Trump issued 31 waivers that sent shock waves through the ethanol industry closing 18 plants, including the Corn Plus plant in Winnebago. Local Republicans and Democrats joined together in letters urging Trump to end the waivers, with little significant change of policy.
The waivers are an exemption to the Renewable Fuels Standard which was approved on a bipartisan vote in Congress in 2005 and requires oil companies and refiners to blend a certain level of renewable fuels to their refined oil products. The law was designed to reduce greenhouse gases as emissions from things like ethanol are lower than gasoline.
The RFS gives farmers another market for their corn and reduces the reliance on direct government payments. The ethanol industry was built by farmers and for farmers. Many have risked their own money to build plants and produce ethanol.
But Trump and his EPA consistently undercut farmers by granting waivers to the oil industry. When the courts ruled the administration grossly exceeded its authority over the waivers, the administration did an end run, offering more retroactive waivers and leaving uncertainty about setting a new Renewable Fuels Standard.
Last fall the EPA did deny 54 waivers, but critics called that election year window dressing. Trump had previously approved 85 waivers, a number four times the annual average. That action had reduced ethanol production by 4 billion gallons and reduced corn needed to produce the ethanol by 1.4 billion bushels.
While additional waivers were rejected toward the end of the Trump’s presidency, a few hours before the inauguration of President Joe Biden, Trump’s EPA administrator Andrew Wheeler approved three more waivers for unidentified oil companies, according to a release by Sen. Amy Klobuchar’s office at the time.
And as the RFA notes, there are 65 exemptions pending. We would urge the Biden administration to follow court rules and the intent of Congress to deny those waivers.
Trump was no friend of farmers, given his ethanol policy and his tariff policies that severely curtailed soybean exports to China. Fortunately, Biden seems to realize the value of farmers and the products like ethanol that support farm income.
Farmers can be confident Biden will follow the law and the spirit of the Renewable Fuels Standard.