Donnelle Eller | Des Moines Register

Kelsey Kremer, kkremer@dmreg.com

Angry and disappointed, Iowa farmers, renewable fuel producers and congressional leaders said Thursday the Trump administration failed to keep the president's promise to restore ethanol and biodiesel demand lost through waivers to the oil industry.

Iowa leaders said a final rule the U.S. Environmental Protection Agency released Thursday hurts farmers, who have struggled with low corn and soybean prices, dragged down farther by ongoing U.S. trade wars with China and other countries.

"Apparently President Trump doesn’t care about his promise to Iowa’s farmers," said Jim Greif, a Monticello farmer who is the Iowa Corn Growers Association board president.

The EPA determines annually how much ethanol and biodiesel should be blended into the nation's fuel supply under a federal mandate called the Renewable Fuel Standard. Waivers granted to some refineries on a hardship basis reduce how much is blended each year.

Renewable fuels advocates had pushed the EPA to use a three-year rolling average of the actual number of gallons waived for refineries. Elected Iowa leaders say that’s the deal they reached when they met with Trump and his administration in September. But the EPA rule released Thursday will use an average of the gallons that the Energy Department recommends waiving, which has been significantly less.

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Tim Bardole, who farms near Rippey, said the EPA "places the oil industry ahead of soybean farmers."

"It was a missed opportunity to bring additional certainty and profitability to Iowa agriculture and the nation’s soybean growers," said Bardole, the Iowa Soybean Association board president.

Kelsey Kremer/The Register

Since taking office, the Trump administration has granted 85 waivers to oil refineries, freeing them from using 4 billion gallons of renewable fuel. The exemptions have killed demand for 1.4 billion bushels of corn used to make ethanol, industry officials say.

Ethanol is made from corn and biodiesel from soybeans. The state's farmers grow the most corn nationally, and Iowa is the second-largest U.S. soybean producer.

Dozens of U.S. ethanol and biodiesel plants have scaled back production or shuttered, either temporarily or permanently, citing the impact of small refinery waivers for the oil industry. At least two plants in Iowa have closed.

A senior EPA official said Thursday that the president is upholding his promise to farmers and will require that 15 billion gallons of ethanol is blended next year by closely following the energy department's recommendations.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the EPA has granted exemptions liberally since 2016, ignoring the energy department's recommendations. "And there's nothing in this rule that requires them to follow them," Shaw said.

The EPA rule garnered bipartisan criticism from Iowa's elected leaders Thursday.

Gov. Kim Reynolds said EPA’s actions "continue to disappoint and it’s understandable why they have lost credibility with the people of Iowa.”

“While we agree on the end goal of 15 billion gallons, this final rule allows those numbers to be too easily disregarded," said Reynolds, a Republican. "And even more important, it’s already negatively impacting the lives of Iowans as biofuels plants are closing and our farmers are losing an important market."

"After years of abuse of small refinery exemptions, this administration had a chance to do right by farmers, but instead it doubled down on undermining the RFS and hurting Iowa," said U.S. Rep. Cindy Axne, a Democrat.

U.S. Sen. Grassley, R-Iowa, said the EPA is "playing games and not helping President Trump with farmers."

"An agreement was reached on September 12 in an Oval Office meeting between several Midwest leaders, President Trump and other members of his administration. This does not reflect what we agreed to in that meeting," Grassley said.

His fellow Republican U.S. senator from Iowa, Joni Ernst, said the EPA "had an opportunity to restore the broken trust of farmers and to follow through on the president’s commitment, but it appears they’ve missed the mark — again."

The difference between the recommended gallons and actual exemptions is large: The energy department, which provides an initial review of small refinery exemption requests, recommended granting an average of 770 million gallons in waivers since 2016, while the EPA has actually granted an average of 1.4 billion gallons.

Grassley said EPA Administrator Andrew Wheeler "has put the president in a bad situation by not following the law as intended by Congress and as the president has promised to uphold."

Kelsey Kremer/The Register

"Simply requiring that the three-year rolling average be based on hard data and actual waived gallons rather than Department of Energy recommendations and EPA discretion would solve this problem and ensure the renewable volume obligations are met," Grassley said.

Shaw said the president “turned his back on certainty for farmers.”

“We are essentially being told to trust the EPA to uphold the RFS in the future, even though for the past three years the EPA has routinely undermined the program," Shaw said.

"Every farmer and biofuel supporter I have talked to is deeply disappointed, frustrated, and quite frankly angry. I don’t think the White House truly understands the depth of discontent in farm country,” he said.

The Trump administration said in an Oct. 4 announcement that the president had made a deal with Republicans, including Grassley, Ernst and Reynolds, to increase renewable fuel demand.

Although the proposed EPA rule didn't reflect the deal, Republican leaders said they had to trust the president would deliver on his promise. Lawmakers, farmers and renewable fuel leaders have lobbied heavily for changes in EPA's final rule, meeting as recently as Tuesday with administration leaders in the White House.

Democratic and Republican congressional leaders said they will be watching EPA.

"Administrator Wheeler should know: This is not the end," Ernst said. "We will keep holding EPA’s feet to the fire to ensure they truly uphold the RFS, the law, as intended and fully implement the other critical aspects of this rule."

Shaw said if the EPA and the Trump administration "back tracks or reneges" on their commitment to follow the energy department's recommendations, "lots of people out here in the Midwest will go nuclear."

Ethanol is something of a weak spot for the president. Just over half of Republicans who do not plan to caucus for Democrats in 2020 approve of his handling of ethanol policy, a Des Moines Register/CNN/Mediacom Iowa Poll last month showed.

Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com or 515-284-8457.