Ethanol Blog

Reynolds, Naig Call on Wheeler to Reallocate Waived Ethanol Gallons

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Iowa Gov. Kim Reynolds and Iowa Secretary of Agriculture have asked EPA Administrator Andrew Wheeler to reallocate gallons lost to small-refinery waivers. (DTN file photo)

Iowa Gov. Kim Reynolds and Iowa Secretary of Agriculture Mike Naig asked EPA Administrator Andrew Wheeler to reallocate ethanol gallons lost to small-refinery waivers to the Renewable Fuel Standard and to increase transparency in the program, in a letter sent to Wheeler on Wednesday.

As President Donald Trump's administration reportedly considers its options in response to a rural backlash to Trump ordering the approval of 31 new waivers for 2018, POET announced this week it is idling production at a 92-million-gallon ethanol plant in Indiana and has cut production at half of its 28 plants.

In addition, there are calls for an investigation into EPA's change of course in issuing waivers under the Trump administration. Since 2016, Trump's EPA has granted 85 small-refinery waivers totaling 4.03 billion ethanol-equivalent gallons not blended with gasoline.

In the letter to Wheeler, https://governor.iowa.gov/…, Reynolds and Naig said the latest round of waivers issued was a "clear violation of the president's commitments to Iowa farmers and renewable energy producers across the Heartland."

They said in the letter the "damage from these exemptions has piled up year after year and gallon after gallon. Over the last three years, the agency has undercut more than 4 billion gallons of homegrown energy, without transparency or accountability, even for so-called small-refinery exemptions offered to oil giants like Exxon and Chevron."

The letter said the loss of the ethanol markets has "taken a devastating toll on rural families facing one of the toughest years on record. Ethanol consumption fell for the first time in 20 years, commodity markets are depressed, and many biofuel plants, including several in Iowa, have already slowed or halted production."

Though required by law to do so, the EPA has not reallocated waived gallons to other obligated parties to the RFS since at least 2016.

"We understand the agency is also working on a draft reset of the RFS, which could emerge any time this year," the letter said. "That rule will ultimately raise or lower the bar for growth in homegrown energy for 2021 and all future years. This could block pathways for the adoption of advanced and cellulosic biofuels that transform farm waste into new rural revenue streams.

"To date, EPA has offered no assurances that the reset will address Iowa's concerns on exemptions or long-term growth. That's unacceptable. The EPA must repair the damage, reallocate lost gallons, and deliver on the economic opportunities President Trump promised to families in America's heartland.

"We call on the EPA to bring transparency to the small-refinery waiver exemption process and to immediately reallocate the gallons that have been lost due to the waivers that have already been granted. We extend an open invitation to join us in Iowa soon to see firsthand the devastating impact these exemptions are having on farm families, biofuels producers and rural communities."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

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MPETERSON1261855553
8/21/2019 | 6:11 PM CDT
Why did corn belt senators vote to confirm wheeler they knew he was anti ethanol