Tricia Braid

Apr 27, 2018  |  Today's News |  Ethanol |  Legislation & Regulation

Members of the Illinois congressional delegation questioned EPA Administrator Scott Pruitt on April 26th in two hearings regarding mismanagement of the Agency and specifically, handing out waivers “like trick or treat candy” to oil refineries exempting them from their RFS obligations. IL Corn joins other dissenting voices in calling attention to the wrongfulness of the waivers Pruitt is granting as clearly, the billions of dollars in refinery profits aren’t in line with the financial hardships the waivers were designed to address.


Representative Rodney Davis (R-IL) signed a letter to Administrator Pruitt yesterday which read, in part, “…it is clear that at least three of these waivers were granted to refineries owned by a company that posted a profit of $1.5 billion last year. In addition, these waivers were issued by the EPA privately and without any public input.”


The letter went on: “Biofuel demand is estimated to be cut by as much as 1.5 million gallons as a result of these waivers.”


The demand loss due to the waivers granted by Pruitt is estimated to be equal to 2.1 million acres of corn. Net farm income is estimated to be at record low levels, and EPA is working behind closed doors to further limit demand to benefit already profiting refineries? We call foul.


Meanwhile, Senator Ted Cruz (R-TX) held a refinery rally outside the hearing in Washington. You can find a Facebook live video of the event here: https://www.facebook.com/SenatorTedCruz/videos/1595882467190714/ Fast forward to the 4 minute mark to hear the Senator’s comments claiming that the RFS is a broken regulatory system taking the jobs of tens of thousands of working men and women.


You should be clear in your understanding that Senator Cruz is correct in that there is a battle raging about the RFS, the Renewable Fuel Standard. We stand on the other side of the battle line from Senator Cruz.


Rep. John Shimkus (R-IL) temporarily shut down the hearing with a warning to protesters in the room (they were there on non-RFS issues) to act with "decorum," and said if they can't, they'd be escorted out of the building.


IL Corn feels that there are opportunities for high octane fuels in the near future. But losing the guiderails of the RFS that provide access to the fuels market is a non-starter for us.


We also take issue with the Senator’s representation of the value of RINs to corn farmers. In his Facebook live video (linked above) at approximately 6 minutes and 20 seconds, the Senator says: “The critical thing to understand is that of all of those billions of dollars going to RINs, none of it is going to corn farmers.”


Well of course it is, Senator Cruz. The value of RINs to corn farmers is reflected in the value of the price of corn that is supported by the ethanol market. Relieving oil refineries from their obligation to RINs production, should they actually be experiencing economic hardship, is within the scope of the RFS. But excusing the industry from participating in the obligations of the RFS, when the oil industry is raking in billions of dollars in profits otherwise, while claiming there is no loss to corn farmers? Well, that is just deceptive and unscrupulous.


There is opportunity within the RFS and beyond for biofuels market growth and the jobs associated with the fuels of the future, high-powered, high octane vehicles, reduced fuel prices, and cleaner air.