RFS Politics Ignite

OMAHA (DTN) -- With concerns about the Renewable Fuels Standard bubbling over, the president of the United States and the administrator of the U.S. Environmental Protection Agency reached out to Iowa Gov. Kim Reynolds on Wednesday morning to reassure her the RFS is safe.

President Donald Trump reiterated his support for the RFS during a rally in Iowa last summer. He did so again on the phone with Reynolds on Wednesday morning, the governor told reporters during a news conference in Pella, Iowa, on Wednesday afternoon.

"I take him at his word," Reynolds said. "But again, we're going to continue to push for the answer we're looking for. Because this is so important, we are not going to stop. When I talked to the president, he reiterated his commitment to the Renewable Fuel Standard. He made it clear he stood with the Renewable Fuel Standard."

Reynolds said she also spoke to EPA Administrator Scott Pruitt by phone on Wednesday, garnering similar support from him on the RFS.

"I certainly felt like I had the opportunity to make my case," she said. "He (Pruitt) reached out to me. They are feeling the pressure."

The EPA announced in a notice a proposal to further reduce the renewable volume blend requirements for advanced biofuels, biomass-based diesel volumes for 2018 and 2019, and the total renewable fuel volumes in the RFS.

EPA also is reportedly considering a proposal from Valero Energy to leave renewable identification numbers, or RINs, attached to U.S. ethanol gallons produced in the U.S. and exported. Currently, the credits are removed from exported gallons. The biofuels industry is concerned that doing so would flood the market with RINs and harm domestic biofuel producers.

Reynolds said she made it clear to Trump and Pruitt that the RFS is important in rural America at a time when agriculture commodity prices are depressed and jobs are on the line.

"This market access is crucial right now," she said. "The stated purpose of the Renewable Fuel Standard is to drive innovation. I appreciate the accessibility of the EPA."

MEETING IN WASHINGTON

Reynolds said she will travel to Washington, D.C., next week to meet with Vice President Mike Pence and Pruitt to continue to make the case for increasing biofuel volumes in the RFS.

"Iowans understand the importance of maintaining a robust Renewable Fuel Standard," she said.

When asked whether Trump or Pruitt indicated which direction EPA is leaning, she said, "Neither came out and said there wouldn't be cuts."

The public comment period closes on Thursday on a proposal that could lead to further cuts in the Renewable Fuel Standard. Comments can be submitted at http://bit.ly/….

Monte Shaw, executive director of the Iowa Renewable Fuels Association, also spoke briefly during the news conference on Wednesday. He said Iowa ethanol plants are slated to expand production capacity by about 600 million gallons in 2018. The capacity has the potential to create about 11,000 new jobs, he said.

"We do feel a little threatened right now," Shaw said. "Up to this point, we've been very concerned. We trusted in President Trump's commitment to renewable fuels. It felt like EPA was saying we're going to put a giant sign over rural America -- closed for business. President Trump has a decision to make. We need to see the final numbers. We need to see the actual results."

AGENCY NOMINEES ON HOLD

The Associated Press reported that Sen. Charles Grassley, R-Iowa, had threatened to put EPA nominees on hold in an attempt to encourage the agency to change course on the RFS proposals.

On Wednesday, the Senate Committee on Environment and Public Works committee postponed indefinitely a committee business meeting to consider a number of various nominees to federal agencies.

That list includes Michael Dourson, nominee to serve as the assistant administrator for EPA's Office of Chemical Safety and Pollution Prevention; Matthew Leopold, nominee to be assistant administrator for the EPA's Office of General Counsel; David Ross, nominee to be assistant administrator for the EPA Office of Water; and William Wehrum, nominee to be assistant administrator for EPA's Office of Air and Regulation.

Wehrum, who is a former EPA official and attorney who has represented petroleum interests, has drawn concern from Sen. Joni Ernst, R-Iowa, who is a member of the EPW committee. While appearing before the committee, Wehrum was asked about whether he supports the RFS. He indicated he would implement the RFS according to the law.

"When he appeared before the committee, I questioned him about how he will uphold the spirit and the letter of this law (RFS)," Ernst said in a statement Wednesday.

"Following his confirmation hearing, I expressed concern with the answers he gave, and told the committee I wasn't comfortable supporting him at that time due to his answers and recent actions by the EPA which had the potential to weaken or undermine the RFS. Over the last few weeks, my staff and I have had many conversations with the White House and Administrator Pruitt where I expressed my concerns."

On Monday, Reynolds, along with Kansas Gov. Sam Brownback, Missouri Gov. Eric Greitens and South Dakota Gov. Dennis Daugaard, sent a letter to Trump. The full letter can be found at http://bit.ly/….

"Two weeks ago, the EPA requested comment on whether it should further reduce the total, advanced and biomass-based diesel volumes beyond the recently proposed (and ill-advised) cuts to the 2018-19 RFS volumes," the letter said.

"This action is concerning and runs counter to the president's repeated commitment to the RFS and rural America. The stated purpose of the RFS is to grow demand for biofuels, to push the industry to innovate, and I encourage the EPA to remember that when finalizing the volume levels."

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

Follow him on Twitter @toddneeleyDTN

(AG/CZ)

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