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Iowa Ag secretary to EPA: ‘A deal is a deal’

Iowa Secretary of Agriculture Mike Naig was on hand at a public hearing impacting the ethanol and renewable fuels industry held by the Environmental Protection Agency on Wednesday morning.

“It’s really important that we have our voices heard here because while we’re appreciative of the White House and EPA signaling that we need to repair the damage done by the small refinery exemptions that have been granted … how they have proposed to do it in the rule is not where it needs to be and we believe it does not live up to the deal that was negotiated between Sen. (Charles) Grassley, Sen. (Joni) Ernst, Gov. (Kim) Reynolds and the White House,” he said.

The EPA heard testimony Wednesday morning in Ann Arbor, Michigan, on the supplemental rule draft it released on Oct. 15 that was meant to strengthen the Renewable Fuels Standard.

In the time since the deal negotiated by President Donald Trump with the EPA, the United States Department of Agriculture and Midwestern elected officials was announced on Oct. 4 and the EPA rule draft released 11 days later, the EPA has faced harsh criticism from the agriculture and biofuels industries. That criticism is aimed at wording in the rule draft that doesn’t match up with what was promised when the deal was originally made.

In the EPA’s rule draft, it calls for using a three-year rolling average of Department of Energy recommendations for small refinery exemptions that waive certain refineries’ obligation to blend a certain volume of biofuels like ethanol into their supply in a given year. The problem, critics say, is that the EPA isn’t obligated to adhere to DOE recommendations and hasn’t done so in several years, instead approving more SREs than the DOE recommended they do.

Regarding the deal announced on Oct. 4, biofuels industry leaders were briefed that the EPA rule would call for using a three-year rolling average of the actual exemptions it allowed in order to determine the volume of biofuels it would need to reallocate to other refineries to ensure that at least 15 billion gallons of ethanol are blended in the nation’s fuel supply each year.

Naig said there was a “wide range of folks from across the Midwest” at Wednesday’s public hearing. They were overwhelmingly pro-RFS and pro-renewable fuels, he said.

“Iowa had a strong showing and a broad representation,” he said.

On one side of the room was a panel of EPA officials who were there to listen to the comments and take notes.

“They were very engaged and very respectful and appreciative of the comments,” Naig said. “But clearly, they are not the decision-makers.”

The EPA will review the comments it receives and Naig said he expects they will have a final rule that will be published by the end of the calendar year.

Iowa Renewable Fuels Association Executive Director Monte Shaw was also at the hearing on Wednesday morning. Shaw has been a vocal critic of the rule proposed by the EPA as it is currently written.

“The market uncertainty generated by EPA’s SRE shenanigans is a cancer at the heart of the RFS,” he said. “The proposal before us today does not remove that cancer and its victims are the farmers who grow our crops and built our biofuels industry.”

During his own testimony, Naig said he had two main points he wanted to convey to the EPA officials.

“One is certainly to reiterate that we think a deal is a deal,” he said.

He said the deal that was agreed upon at the beginning of October is the deal that the EPA needs to deliver on. The EPA needs to use the data of the actual waivers it has granted when reallocating that ethanol volume.

The second thing Naig wanted to do is paint a picture of the real-life impact that the “mishandling” of the RFS can have. Four renewable fuel plants in the state of Iowa have shut down and “many more” have reduced their production.

“And what that results in is loss of jobs,” he said. “That means families are having to make some tough decisions, and it means that farmers across the state have fewer markets to sell their products to. This isn’t just words and numbers on paper – it’s impacting real Iowans, real people.”

He said that uncertainty is hurting plants like the three ethanol plants in Webster County — Valero Renewables, Cargill and POET.

“If we can restore certainty, that allows those plants to make decisions about what to do in the future,” he said. “It creates opportunities for those plants to thrive and grow and we think there’s lots of opportunity for this industry to still grow.”

It’s not too late to fix these problems with the RFS, said Shaw.

“There is still time for EPA to remove the SRE cancer,” Shaw concluded his testimony. “It is time for EPA to make it right and stick to President Trump’s deal.”

This public hearing opened up the public comment period for the EPA rule draft, which will remain open for 30 days before closing on Nov. 29. During that time, individuals can submit written comments regarding the proposed rule to the EPA for consideration.

The digital regulation docket for this rule proposal can be found at https://www.regulations.gov/docket?D=EPA-HQ-OAR-2019-0136. Public comments can be made through that site until 11:59 p.m. ET on Nov. 29.

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