Trump White House seeks to assuage farmer unrest over biofuel policy:
sources
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[August 21, 2019]
By Jarrett Renshaw and Humeyra Pamuk
NEW YORK/WASHINGTON (Reuters) - President
Donald Trump's administration has been scrambling to stem the tide of
rising anger in Farm Belt states after its decision this month to allow
numerous oil refiners to mix less ethanol into their gasoline, sources
told Reuters on Tuesday.
Trump held a two-hour meeting on Monday with members of his Cabinet
after hearing blowback from farmers after the decision to grant
exemptions from the nation's biofuel laws to 31 refineries, two sources
familiar with the discussions said. Trump's re-election campaign team
also took notice of Democratic presidential candidates seizing on the
unrest, the sources said.
Iowa, the nation's largest producer of corn and ethanol, is a swing
state won by Democrat Barack Obama in consecutive elections before Trump
rode to victory in 2016 in part by promising to support ethanol.
It was unclear what actions Trump would be able to take to appease angry
farmers. Reversing the 2018 waivers was floated as an option but quickly
knocked down, the sources said, but the administration was trying to
find other ways to boost ethanol demand.
![](http://archives.lincolndailynews.com/2019/Aug/21/images/ads/current/LPL_small%201.gif)
Refiners are required to blend biofuels into the nation's gasoline pool
or buy credits to fund those refiners who can. News of the meeting sent
the compliance credits soaring by 50% on Tuesday before pairing gains.
Corn farmers and ethanol producers lobbied to cut dramatically the
number of exemptions from these rules, which have hit a record under the
Trump administration.
Farmers bearing the brunt of Trump's trade war with China say his
support of the hardship waivers has destroyed ethanol demand.
"For the first time in my life I’ll vote for a Democrat, for Joe Biden,
because Trump will have lied to us about supporting ethanol,” Mark
Marquis, CEO of Illinois ethanol producer Marquis Energy, said in an
interview on Tuesday. “I feel misled and lied to, quite frankly.”
Refiners, especially smaller companies, have argued the biofuel laws are
costly and burdensome. Trump's expansion of the waiver program has saved
the oil industry billions of dollars in compliance costs. On Tuesday,
the U.S. Environmental Protection Agency said in a statement there was
"zero evidence" the refinery waivers have hurt demand for ethanol, which
biofuel producers dispute.
The nation's largest ethanol producer, POET, announced on Tuesday it was
cutting production at its plants and blamed the hardship waivers for the
move.
“POET made strategic decisions to support President Trump’s goal of
boosting the farm economy," POET President and COO Jeff Lautt said.
"However, these goals are contradicted by bailouts to oil companies."
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U.S. and Iowa state flags are seen next to a corn field in Grand
Mound, Iowa, United States, in this August 16, 2015 file photo.
REUTERS/Jim Young/Files/File Photo
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'SCREWING THE FARMER'
Monday's meeting included representatives from the U.S. Departments
of Energy and Agriculture, as well as the EPA, the sources said. The
White House declined to comment.
One option advocated by the biofuel industry is to raise the annual
amount of ethanol required to be blended into the nation's fuel
pool, or to add back the waived volume onto the annual consumption
mandate that the EPA had proposed to set at 15 billion gallons for
2020. No proposals were agreed upon.
Prior to Trump's election, just a few smaller refineries were
granted relief from this requirement. Trump's administration has
vastly expanded those waivers, including granting relief to
facilities run by major oil companies Exxon Mobil Corp <XOM.N> and
Chevron Corp <CVX.N>. Trump personally directed the EPA to grant the
most recent waivers, sources told Reuters.
"Not only is the government not keeping its word, but it's also
screwing the farmer when we have low prices for (corn),” said Iowa
Senator Chuck Grassley, a Republican, on a weekly conference call to
discuss agricultural issues.
The EPA granted the exemptions just as Democratic candidates hoping
to challenge Trump in 2020 visited the Iowa State Fair, where they
sought to position themselves as fighters for ethanol.
Kelly Nieuwenhuis, a third-generation corn and soybean farmer from
O'Brien County, Iowa, said he voted for Trump in 2016 but his
support for the president is waning.
![](http://archives.lincolndailynews.com/2019/Aug/21/images/ads/current/pestcontrol_bch_termites.png)
“I have talked to a bunch of farmers in the past few days, and they
are fed up. They are not going to vote for Elizabeth Warren, but
they said they are not going to vote for Trump, so they will sit
this out,” Nieuwenhuis said in an interview on Monday.
Trump delivered on a change long-sought by the biofuel community to
lift a summer ban on higher ethanol blends of gasoline, but farmers
and ethanol producers say the refining exemptions have negated any
benefits from that move.
(Reporting by Jarrett Renshaw in New York and Humeyra Pamuk in
Washington; Additional reporting by Stephanie Kelly and Chris
Prentice in New York; Editing by Dan Grebler and Matthew Lewis)
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