Ethanol Blog

Uncertainty Remains in Quest for Year-Round E15

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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The continued government shutdown is raising questions about the timing of EPA's E15 rule. (DTN file photo by Jim Patrico)

President Donald Trump made a grand E15 announcement in Iowa way back on Oct. 9.

So it's understandable why ethanol and agriculture interests are up in arms with the idea that a government shutdown may derail the completion of a rule ahead of the summer driving season.

Here we are, three months later with the EPA's doors closed and not a single employee working on the E15 rule.

The clock ticks.

Think of it -- the EPA was expected to release a proposal in February long before the shutdown. When you add in a public comment period, certainly to include many thousands of comments, the agency only had maybe three weeks' worth of wiggle room to complete the rule before June 1 -- in a perfect, non-shutdown world.

A prolonged shutdown could mean the rule might be completed sometime during the driving season. Problem is, no one has a clue how long the shutdown will last.

Neither Trump nor House Democrats are budging.

The frustration for ethanol and agriculture is that had the agency released a proposed rule prior to the shutdown, it could have saved additional angst for a farm economy already struggling with low farm income and trade issues, and an ethanol sector hit hard by low ethanol prices and negative margins.

EPA Acting Administrator Andrew Wheeler told a Senate committee on Wednesday that approval of year-round E15 still is on track for the summer driving season. In addition, Wheeler continues to stand by the notion that EPA is bound by law to consider and issue small refinery waivers to the Renewable Fuel Standard.

During his administrator confirmation hearing before the Senate Committee on Environment and Public Works, Wheeler did say his agency would consider each waiver request individually and not issue blanket approvals.

The EPA granted 48 waivers in 2016 and 2017, totaling an estimated 2.25 billion gallons of biofuels not blended. Currently the EPA has 22 such requests to consider for 2018.

While lawmakers such as Sen. Charles Grassley, R-Iowa, believe Wheeler understands the plight of the ethanol industry in losing biofuels gallons to waivers, Wheeler continued to say on Wednesday that EPA has lost three court cases related to waivers and is bound by those cases.

Renewable Fuels Association President and Chief Executive Officer Geoff Cooper said in a statement that Wheeler's comments were both encouraging and disappointing.

"We were encouraged to hear Acting EPA Administrator Wheeler commit to completing the year-round E15 regulatory fix before the summer driving season begins, but we are disappointed that there was no commitment to repair the significant damage to the ethanol industry caused by his predecessor's issuance of RFS compliance bailouts to highly profitable oil refiners," Cooper said.

"America's ethanol producers and farmers continue to suffer as a consequence of former Administrator (Scott) Pruitt's actions."

In addition, Cooper said the already-compressed timeline to complete the E15 rule should be cause for the agency to separate the E15 rule from an expected Renewable Identification Number, or RIN, reform package, in order to expedite E15.

American Coalition for Ethanol Chief Executive Officer Brian Jennings said the EPA has let an opportunity on E15 slip away.

"We appreciate that Acting Administrator Wheeler assured the senators that EPA is 'still on schedule' for issuing a final rule allowing year-round E15 sales in time for this summer's driving season, but his caveat of if the government is back up and running in a 'reasonable length of time' is no excuse for a delay," Jennings said in a statement.

"It's been more than three months since President Trump directed EPA to lift Reid vapor pressure restrictions on E15, so why didn't EPA set rulemaking wheels in motion in November, December, or January?"

Fair points.

Despite Wheeler's attempt to comfort farmers and ethanol producers that E15 remains on track, what we have now is more doubt thrust into the agriculture and ethanol industries at a time when uncertainty abounds.

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

Follow me on Twitter @toddneeleyDTN

(TN)

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