- The Washington Times - Tuesday, October 3, 2017

The ethanol industry Tuesday launched a highly coordinated effort to drive a wedge between President Trump and Environmental Protection Agency Administrator Scott Pruitt charging that the president risks selling out the rural Midwestern voters who helped propel him to the White House if he doesn’t step in and stop proposed EPA rules that would punish the biofuels sector and reward oil refiners.

The agency is weighing changes to the federal Renewable Fuel Standard (RFS), the federal program that requires the blending of ethanol with gasoline. The most detrimental, biofuels advocates say, is a plan to potentially allow exported ethanol to count toward annual quotas mandated by Congress.

Right now, only ethanol that is used in the U.S. counts toward the yearly threshold. Allowing exports into the equation would make compliance with the RFS cheaper for oil refiners, many of whom reportedly have pressed Mr. Pruitt and other officials to make the adjustment.

The EPA also is considering several other changes, including reducing the amount of cellulosic biofuels that must be used each year.

An agency spokesperson said Tuesday that nothing is final and that the potential changes are still open to public comment, but the ethanol sector — which feared from the early days of the administration that Mr. Pruitt, a biofuels critic dating back to his days as Oklahoma attorney general, would pursue such moves — is striking back hard.

They’ve zeroed in on Mr. Trump’s unwavering support for the ethanol industry, which he reiterated throughout his 2016 campaign and since coming to office. The changes his administration is eyeing, they argue, would run counter to his promises and would greatly harm economies in Iowa, Indiana, and other red states that have seen economic booms thanks to ethanol.

“The White House needs to rein in the EPA before the agency tramples the president’s rural base — and his promises to voters,” said Brooke Coleman, executive director of the Advanced Biofuels Business Council.

Mr. Coleman and other critics have zeroed in on the fact that the export policy change seemingly would greatly benefit Carl Icahn, the billionaire and former Trump adviser who owns CVR Energy, an oil refining company. Mr. Icahn had pressed the administration to make the change, and some Democratic lawmakers even called for an FBI investigation of his lobbying efforts.

The technical change deals with “renewable identification numbers,” or RINs. Each gallon of blended fuel is assigned a RIN, and companies such as CVR Energy that lack the infrastructure to blend themselves must buy RIN credits, the price of which fluctuates.

Allowing exports into the mix would dump at least one million more RINs into the market, ethanol industry leaders say, driving down the price and saving refiners huge amounts of money.

“It’s a handout worth millions for someone like Carl Icahn, but it violates the law and could spark an immediate trade backlash. Farmers and biofuel producers would be hurt most, but the entire fuel supply chain would take a hit, including consumers,” Mr. Coleman continued.

At a more fundamental level, ethanol backers say that twisting the RFS to count ethanol exports betrays the spirit of the law. Passed by Congress and signed into law by President George W. Bush in 2007, the RFS was sold as a national security measure and a step toward true American energy independence.

In a letter to Mr. Trump on Tuesday, a host of ethanol groups said the actions currently under discussion at the EPA would weaken the RFS and render the president’s commitment to the industry little more than lip service.

“If the proposed changes are finalized, EPA’s actions would cause severe harm to our industry, undermining your efforts to drive economic growth and secure America’s status as the global leader in biofuel production. We urge you to act quickly to continue to grow the RFS, and we would look forward to working with you and your staff to do so,” reads a portion of the letter, signed by the Renewable Fuels Association, the National Corn Growers Association and other organizations.

Emily Skor, CEO of the biofuels trade group Growth Energy, said Tuesday that the distance between Mr. Trump’s campaign rhetoric and the actions of his EPA is growing.

“I think there is a gap and frankly there shouldn’t be one … It’s not a trend line that’s particularly encouraging,” she said.

For its part, the administration says it’s committed to working with the industry as it finalizes its RFS policy.

EPA is currently seeking input from all stakeholders involved. Nothing has been finalized at this time,” an EPA spokesperson said.

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