Advocates also outlined a range of “extreme and unusual” factors impacting the stability of U.S. fuel markets, including historically low domestic fuel inventories, record exports of U.S. fuel to allies overseas, and continued inflationary pressures on fuel consumers. Protecting summer access to E15 would help relieve pressure on U.S. fuel supplies, while reducing greenhouse gas emissions, lowering evaporative emissions, and supporting America’s farmers and rural economies, they argued. 

“While a permanent solution that would allow E15 sales year-round remains an important necessity, we urge you to take action on a temporary, emergency RVP waiver as soon as possible to remedy current and expected supply challenges resulting from ongoing conflict in Ukraine,” concluded the letter. 

Source:

Perdue made stops in southern Minnesota and Iowa, where he said the Higher Blends Infrastructure Incentive Program removes obstacles to offering consumers year-round access to E15 fuel.

The USDA is rolling out the first $22 million of the $100 million in investments projected to increase ethanol demand by nearly 150 million gallons annually.

Iowa U.S. Senator Chuck Grassley celebrated the news.

“When you get cars that about 90 percent can use E15, we’re going to be selling more ethanol. And we’re going to be more profitable in the price of corn, and profitable in ethanol.”

Renewable Fuels Association CEO Geoff Cooper says the $100 million from USDA will be matched by the private sector.

USDA is initially funding projects in Iowa, Illinois, Indiana, Minnesota, Missouri, Nebraska, Ohio and Wisconsin.

Source: Brownfield Ag News

“Subject only to State approval, our important Ethanol Industry will be allowed to use the 10% Pumps for the 15% BLEND,” Trump tweeted.

The administration’s announcement followed a conversation Trump had with Sen. Joni Ernst (R-Iowa), who has been pushing for the change as she seeks re-election. Ernst, in her own tweet, welcomed the news.

But some rural voters remained wary of what they argue historically has been Trump’s backing of the oil industry at the expense of promoting alternative fuels.

Farmers are frustrated that the Trump administration is again considering dozens of requests by the oil industry for small-refinery exemptions from complying with the Renewable Fuel Standard. Last year those exemptions cut billions of gallons from the amount of ethanol and biodiesel the oil industry is required to blend into the nation’s fuel supply.

The Trump administration’s EPA in 2019 approved the sale of a 15 percent ethanol-gasoline blend known as E15 year-round. It previously had been blocked for sale in the summer in many areas where smog is an issue.

Sources: MarketWatch, Farm Progress

Based on the latest projections from the Energy Information Administration and the Food and Agriculture Policy Research Institute, the RFA study also found that pandemic-related damages in 2020 and 2021 could reach nearly $9 billion.

The study found that from March to June:

• The cumulative decline in ethanol production and consumption exceeded 1.3 billion gallons.
• Nearly 500 million fewer bushels of corn were used in ethanol production.
• Industry revenues from ethanol and co-products sales were reduced by over $3.4 billion due to the combination of reduced output and lower prices.

Based on EIA and FAPRI projections and assuming current market conditions do not deteriorate, total pandemic-related revenue losses could approach $7 billion in 2020 and $1.8 billion in 2021.

If additional travel and business restrictions are adopted by states, the losses may surpass the $10 billion estimate from RFA’s initial forward-looking analysis released in April.

“At one point in late April, more than half of the ethanol industry’s production capacity was shut down,” said RFA President and CEO Geoff Cooper. “The idling of dozens of ethanol plants reverberated throughout rural America and sent ripple impacts across the farm economy. We have seen conditions improve since the low point in April, but ethanol production and consumption remain well below pre-COVID-19 levels.”

Source: Farm Progress

“We really haven’t sold a gallon since sometime in early March,” said Mike Jerke, CEO of Southwest Iowa Renewable Energy. Jerke said all of the product is being stored.

USDA’s new $19 billion aid plan doesn’t include any money for ethanol, despite an all-out push by the industry and its allies in Congress to get a slice of the funding. Agriculture Secretary Sonny Perdue said there simply wasn’t enough money to go around with so many sectors pleading for help.

Instead, RFA President Geoff Cooper said he thinks the next major economic rescue package will include some help for ethanol producers.

“We think a fourth stimulus package is the more likely vehicle for that program,” he said.

Source: Politico

The decision is expected to follow a meeting anticipated this week that would bring together President Trump, Agriculture Secretary Sonny Perdue and EPA Administrator Andrew Wheeler.

In January, the court ruled EPA didn’t have the authority to issue small-refinery exemption extensions to three companies that were not originally granted waivers.

The ruling applied to about one-third of all small refineries in the country, meaning EPA is faced with either appealing the ruling or applying it nationally. An appeal from the White House would be asking the 10th Circuit for a hearing before all judges in the 10th Circuit.

In a joint statement from the National Corn Growers Association, the Renewable Fuels Association, and seven other groups, biofuel advocates called on Trump to stand with rural America in implementing changes as a result of the ruling.

The court ruling said that the EPA “exceeded its statutory authority in granting those petitions because there was nothing for the agency to ‘extend.’ Further, one of the EPA’s reasons for granting the petitions was to address disproportionate economic hardship caused by something other than compliance with the renewable fuels mandate. That, too, was beyond the agency’s statutory authority.”

EPA has taken heat on how it defines “hardship” when it granted waivers. The ethanol industry and others have maintained the waivers were not designed for oil companies that report billions of dollars in profits.

Sources: Progressive Farmer, Politico

“EPA’s proposal does not ensure sufficiently accurate projections for waived
gallons and, therefore, will continue to shortchange the RFS when waivers are granted,” NCGA President Kevin Ross wrote.

The conclusion of the comments period kicks off a review that is expected to result in a final rule this winter, the EPA said. The proposed rule would use a three-year average of Department of Energy (DOE) recommended waivers rather than address the impact of waived renewable fuel gallons based on exemptions granted, NCGA said. By using DOE recommendations,
not actual waived gallons, EPA’s proposal to redistribute any future waived
gallons is half of what President Trump committed to farm-state senators.

Former Iowa governor and current ambassador to China Terry Branstad
met with Trump recently to lay out the industry’s concerns. Sen. Chuck Grassley (R-Iowa) has also been consulted.

Sources: NCGA, Politico

Farmers expressed outrage in late summer after the EPA announced it was granting 31 waivers to small refineries, exempting them from blending ethanol into gasoline. They were reassured this month when the administration said it would require other larger refineries to add those exempted gallons into their fuels.

But last week, the EPA released the fine print, and the proposed rule would call on those larger refineries to add ethanol based on projections rather than the actual number of gallons exempted. This is angering ethanol groups that had praised the policy a week earlier.

“President Trump made a commitment to farmers and instructed the EPA to follow the law,” said National Corn Growers Association President Kevin Ross, “but this proposal appears to come up short again.”

Geoff Cooper, president and CEO with the Renewable Fuels Association, said that “if the Oct. 4 announcement from EPA was a big step forward, today’s supplemental proposal is a step backward.”

The Iowa Corn Growers Association said in a statement that it was “outraged the Environmental Protection Agency did not implement the details that were presented and outlined by the president only eleven days ago.”

Ethanol producers worry there will be a disconnect between the actual number of gallons of ethanol that are not blended into the fuel supply after the EPA doles out waivers and the number of gallons the government projects will be exempted.

The proposal faces a 30-day comment period, and the EPA expects to finalize a new policy by the end of the year.

Neil Caskey, vice president of communications for the NCGA, will speak at the Marketing & Distribution Convention in in St. Louis next month. He will discuss the state of the ag industry and what’s ahead.

Source: The Hill

Trump said in June during a visit to Iowa that he would review a national program granting the waivers, but farmers say that the EPA’s decision to grant 31 exemptions to small refineries across the country showed the president sided more with the fuel plants than corn growers.

Lynn Chrisp, president of the National Corn Growers Association, said in a letter to President Trump that news of the exemptions “sent shockwaves through the corn industry and put us back on our heels.”

Chrisp cited the closure of an ethanol plant in Minnesota and steps taken by the nation’s largest ethanol producer, which include idling a plant in Indiana and reducing production at half of its other plants, as indicators of the damage.

“Corn farmers are wrestling with a perfect storm of poor weather and market disruptions due to ongoing trade disputes, Chrisp wrote. “The announcement of more waivers granted to refineries has pushed farmers beyond their limits. We appreciate your efforts to remove the barrier to year-round sales of E15, but you should know these waivers completely undermine the growth potential for higher blends of ethanol.”

The letter called for immediate and impactful change.

“We have heard news reports about waiting until 2021 to redistribute exempted gallons,” it said. “You should know 2021 will be too late. Plants are closing. Jobs are being lost in rural America. We need these changes to take effect for the coming year, putting meaning back in the RFS now instead of waiting until 2021.”

The EPA argues it is following the process for giving waivers to those plants that would face financial hardship by being forced to add ethanol to their fuel.

Trump did not offer details of his plan for biofuels but tweeted this: “The Farmers are going to be so happy when they see what we are doing for Ethanol,” he wrote. “It will be a giant package, get ready! At the same time I was able to save the small refineries from certain closing. Great for all!”
Sources: The Hill, NCGA