As EPA grants biofuels waivers, Iowa ag braces for impact
Iowa corn growers are waiting for a promise from the Donald Trump administration as the biofuel industry experiences a round of shut-downs.
In July the president wrote on Twitter, “The farmers are going to be so happy when they see what we are doing for ethanol, not even including the E-15, year around, which is already done. It will be a giant package, get ready! At the same time I was able to save the small refineries from certain closing. Great for all!”
The “giant package” tweet came after the Environmental Protection Agency made a decision to grant 31 waivers to oil refineries. The waivers negate the requirement for oil companies to blend biofuels into the fuel supply of the nation.
The latest round of waivers granted to oil refineries during the Trump administration brings the total to 85. As a result of the waivers, nationwide biofuel plants have shut down and four billion gallons of biofuel have been destroyed, along with 1.4 billion bushels of corn and 367 million bushels of soybeans.
Corn is used in the production of ethanol and soybeans are used to make biodiesel.
“Iowa is the number one state for producing biofuels and ethanol and biodiesel plants are shutting down all over the country,” said Cassidy Walter, communications director for Iowa Renewable Fuels Association. “Iowa corn growers are upset and hurt. President Trump came to Iowa and pledged a renewable fuel standard. The EPA is going against that and granting waivers.”
On Tuesday, W2 Fuel in Crawfordsville announced the closure of the 10-million gallon biodiesel plant.
Two ethanol plants in Iowa earlier this year announced suspensions of operation:
• Plymouth Energy in Merrill suspended operation in July.
• Siouxland Energy, an 80-million gallon ethanol plant near Sioux Center ceased operation Sept. 13.
Kelly Nieuwenhuis, the board president of Siouxland Energy participated in a Thursday press call regarding the EPA’s use of waivers and the impacts felt by the corn and ethanol industries.
“The main thing is how upset farmers are with Trump, and how much destruction has been done; how much agriculture has been hurt,” Nieuwenhuis told the Times-Republican following the press call.
Nieuwenhuis said there is a federal law – the Energy Independence and Security Act of 2007 – stating 15 billion gallons of ethanol need to be blended into the nation’s fuel supply every year. The granted waivers are not meeting the 15 billion requirement.
“Our main push is they need to abide by the law,” he said. “Fifteen billion is 15 billion.”
Scott Gudbaur, grain merchandiser for Mid Iowa Cooperative in Beaman, said while the closures of the plants have not had any immediate effects on local producers, the waivers are a cause for concern.
“We have not seen an immediate problem but it’s right around the corner,” Gudbaur said. “We are all hoping that something gets better.”
According to Gudbaur, roughly 70 percent of the corn taken in by the Cooperative is sent to biofuel facilities. While that percentage across the state is a little lower, it is still more than 50.
“Historically as a state, 60 percent of Iowa corn is processed by an ethanol plant,” Walter said.
Members of the Iowa Renewable Fuels Association are eagerly waiting for the aforementioned “giant package.”
“We thought he was going to say what was coming last week,” Walter said. “We are waiting and advocating for action.”
Nieuwenhuis said producers cannot wait any longer, especially with harvest season so close.
“We can’t wait six months,” Nieuwenhuis said. “This can be done quickly and we want it in writing, not someone standing at a podium and making promises. We need news soon.”
One action the Iowa Renewable Fuels Association is pushing for is a reallocation of the waived 1.4 billion gallons of biofuel.
“Every year the EPA sets blending requirements; a proposed rule with no exemptions,” Walter said. “They have granted several exemptions in the last two years. We are looking for them to reallocate the gallons so no one is hurt by the waivers.”
Gudbaur said the reallocation would bring producers back to where they were before the waivers were granted.
Walter urged corn producers to share their stories with government representatives and also on social media, to write letters to the editor because politicians do pay attention to those.
“Make your voice heard however you can,” Walter said. “Talking to a representative will more than likely give you a response. Make your voice heard. It adds to the pressure they are feeling right now.”