Ethanol producers are preparing for major action at the federal level in the months ahead, both in terms of litigation against Trump administration actions on the nation’s renewable fuel mandate and lobbying to finalize rules regarding the ethanol mandate.
“You know, 2019 is going to be a crazy year,” said Monte Shaw, the president of the Iowa Renewable Fuels Association, speaking to the Washington Examiner in an interview ahead of a regional ethanol summit he is hosting in Des Moines on Tuesday.
The craziness Shaw referenced pertains to the number of lawsuits that are both anticipated and pending over the Environmental Protection Agency’s Renewable Fuel Standard program, as well as the agency’s new actions to boost the amount of ethanol sold year-round in the nation’s gasoline supply.
Shaw warned the Trump EPA that “it will be war” if it refuses to follow a court order that directed the agency to add 500 million gallons of ethanol to its annual targets to make up for actions taken by the Obama administration that lowered the annual requirements.
The renewable fuel program requires oil refiners to blend billions of gallons of ethanol and other biofuels into the nation’s fuel supply each year. But the EPA’s implementation of the program since 2016 has prompted lawsuits from Shaw’s industry and farmers, which seek to stop EPA from lowering the annual targets and harming their market.
A federal appeals court had ruled in favor of the farmers, saying EPA illegally reduced the biofuel mandate for two consecutive years under the Obama administration and must now make up for it.
The industry wants EPA to include a half-billion gallons that were removed from the annual targets in 2016 in a rulemaking. EPA has said it will fulfill the court order in what it calls a “reset rule” that could be proposed by the end of the week.
The industry, though, is fearful that the agency might find a way not to make up the difference. Shaw warned that it would be “pitchforks and torches time” if EPA didn’t include the missing mandated biofuels in the reset rule.
Separately, the industry is aiming to push the administration to advance the “RVP rule,” which will allow 15-percent ethanol fuel blends to be sold year-round. The rule is a key part of a deal President Trump made with the industry and corn farmers to support a market for ethanol.
Shaw expects the rule to be delayed by court challenges leveled by refiners and the oil industry, but is eager to see the agency roll it out to speed up the process.
The E15 RVP rule — RVP standing for Reid vapor pressure — is part of what the administration has called its “win-win” plan for ethanol producers and refiners, although the refiners oppose the idea of blending higher amounts of ethanol into the gasoline supply.
Meanwhile, the ethanol industry is also worried about what EPA acting chief Andrew Wheeler does with the refinery waiver program, which has been used to exempt dozens of refiners from having to blend ethanol. The ethanol industry says the actions have destroyed demand and it is currently suing the Trump EPA over its broad interpretation of the law in issuing the waivers under former EPA Administrator Scott Pruitt.
