Their goal is to protect the indefensibly high number of oil industry handouts that have been ravaging the rural economy. That’s because President Trump has vowed to support American farmers during one of the worst agricultural downturns in modern history, and refiners fear competition from a low-carbon fuel that costs less than gasoline. For communities in Wisconsin, home to 64,793 farms and zero oil wells, it’s a fight that will make or break the rural recovery.
In the past, oil companies could block retailers from offering higher ethanol blends. They controlled the supply chain between fuel makers and retailers. The Renewable Fuel Standard changed the game in 2005, setting annual targets for biofuel blending to increase our energy independence and protect the air we breathe. More recently, the Trump Administration updated a decades-old fuel regulation to allow retailers the option to offer 15% ethanol blends (E15) all year-round. Wisconsin retailers like Kwik Trip offer the blend at various locations, alongside traditional options, allowing consumers to select a fuel that’s better for their cars, their families and their wallets.
Biofuel blends like E15 help reduce emissions, boost octane and hold down fuel costs. As analysts at GasBuddy noted, “The year-round approval of E15 will mean another outlet for corn growers, and lower prices for consumers that want to fill up with E15, which is generally offered 5 to 10 cents per gallon lower than E10 gasoline." And the latest USDA analysis demonstrates that homegrown biofuels are cleaner than petroleum and could offer a carbon reduction of 70% or more by 2022.
In Wisconsin, the nation’s seventh-largest biofuel producer, access to higher ethanol blends also means that more motorists can support farm income and rural manufacturing workers at the state’s nine ethanol plants. But those benefits are now being threatened by special “hardship” exemptions granted to some of the nation’s largest and most profitable refining companies. These Environmental Protection Agency handouts allow oil companies to sidestep the RFS and lock homegrown biofuels out of the marketplace.
Over the past two years, these special exemptions have quadrupled in number, destroying demand for more than 2.6 billion gallons of biofuel — the market for nearly a billion bushels of U.S. grain. Legally, exemptions may be granted to small refineries facing “disproportionate economic hardship,” but EPA bureaucrats are reportedly approving them for refineries owned by large companies like Exxon and Chevron. We don’t even know all the recipients, because the agency has hidden the process from public view.
For rural families, it’s hard to imagine a worse time to come under attack by Washington bureaucrats. Farm income has been spiraling downward, exports are down, and flooding has demolished hopes for the next harvest in many communities. Across the heartland, 200 ethanol plants are under incredible strain. Many have already idled production due to historically low margins, driven lower by EPA mismanagement.
Oil companies justify the abuse by arguing that exemptions don’t impact ethanol demand, yet consumption fell in 2018 for the first time in 20 years. Meanwhile, the EPA often ignored analysis from the Department of Energy, which found no economic justification for many of the exemptions.
According to U.S. Agriculture Secretary Sonny Perdue, President Trump recently told regulators, “We have got to take care of our farmers … How in the world does Exxon Mobil qualify as a small refiner?” That’s the same question Midwest champions like Wisconsin’s U.S. Sen. Tammy Baldwin have been asking for months. That’s why Growth Energy launched a new ad campaign that gives a voice to those in rural communities who are most impacted by the EPA’s failure to follow the law.
We know the president is listening, and clearly, it’s time for the White House to demand the EPA end its corrosive policies.
~Emily Skor is the CEO of Growth Energy, the nation’s largest association of ethanol advocate and producers.
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