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Trump Defends Refinery Waivers
USAgNet - 07/12/2019

President Donald Trump has cited his move to allow year-round sales of high-ethanol gasoline as farmers pressure him to dial back decisions to exempt oil refineries from biofuel-blending mandates, signaling the president sees the two issues as related. Agriculture advocates have told Trump that his ethanol change -- which could expand U.S. sales of the corn-based fuel -- isn't enough to offset government decisions to waive refineries from annual biofuel quotas.

Senator Joni Ernst, an Iowa Republican, said in a telephone interview Wednesday that she's spoken directly to Trump about the matter and that he's replied that "he gave the farmers" the higher blend, reports Bloomberg.

Ernst said that she and other agricultural industry advocates are urging Trump to limit the number of waivers issued. They argue that the Environmental Protection Agency has handed out exemptions to refineries too freely, undermining demand for their products and the corn and soybeans used to make them.

Under a 2007 energy law, refiners are required to blend biofuels such as ethanol, made from corn, and biodiesel, derived from soybeans, into petroleum. Federal law authorizes the Environmental Protection Agency to issue exemptions for small refineries facing a "disproportionate economic hardship."

As the 2020 presidential election heats up, Trump is caught between two key constituencies -- farmers and oil companies -- in opposite camps. Last month in Iowa, Trump was greeted and thanked by farmers during a celebration of the administration's move to allow year-round sales of so-called E15 gasoline, a mixture of 15% ethanol, compared to the widely used 10%. Still, they urged him directly -- and publicly -- to rein in the waivers.

"We are so thankful to have E15 year-round," but Trump must work with EPA to resolve the waiver process, Ernst said.

According to Bloomberg, administration officials have been clashing over how to handle the exemptions, with Agriculture Secretary Sonny Perdue pushing the EPA to reallocate past waived biofuel quotas to other refiners as part of a coming RFS "reset" regulation, said two people familiar with the matter who asked not to be named detailing private deliberations.

In the meantime, the dispute is preventing EPA action on some 38 applications from refineries seeking exemptions from 2018 biofuel-blending quotas.

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