Trumping Obama on Biofuels

Ethanol industry advocates believe the Trump administration will be friendlier to ethanol than the previous one. This article appears in the February print edition of Ethanol Producer Magazine.
By Ann Bailey | January 25, 2017

Last fall, a few weeks before the 2016 presidential election, Renewable Fuels Association President and CEO Bob Dinneen concluded an Export Exchange session on how a new administration might affect global trade by saying that citizens really wouldn’t know any specifics until the crop was in the bin. A few months later, the majority of the crop is in the bin, but there are still a few fields left to be harvested. Voters elected Donald Trump president and Mike Pence vice president on Nov. 8, and in the ensuing weeks, Trump appointed former Texas governor Rick Perry as U.S. Energy Secretary and Oklahoma Attorney General Scott Pruitt as U.S. EPA administrator. By press time in early January, several Cabinet positions, including U.S. Agriculture Secretary, still were unfilled and many assistant secretary and administrator positions remained open.

“The whole government hasn’t come together, so we’re beginning to get it in the bin, but it’s not completely there,” Dinneen says. Though it wasn’t clear who Trump would pick to complete his administration, Dinneen is confident the new president will be friendly to ethanol.

Past Support
“He was very supportive in the campaign of ethanol, generally, and the RFS (renewable fuel standard), specifically,” Dinneen says. “He visited several plants. He kicked the tires. I think he understands what ethanol means to rural communities. I think he understands what ethanol means to consumers. I think he understands what it means in terms of adding American energy, and he’s all about American energy, so I’m optimistic.”

Besides being supportive of the RFS, Dinneen believes Trump’s plan to repeal regulations also will benefit the ethanol industry.

“We have a slew of regulations that provide no environmental benefit, that provide no consumer benefit, that just get in the way of economic growth and, even though Carl Icahn has been designated as the regulatory czar, I think that our message—that these are regulations that don’t make sense for the refiners or consumers—will resonate,” Dinneen says. “For example, our effort to secure the 1-pound waiver, to eliminate the disparity between E10 and E15 and other higher-octane blends on volatility, on regulations, may gain some traction in this administration where it did not in the previous administration.” And while it is true that Trump has not been a fan of free trade agreements, he has been “an indefatigable defender of American industry,” he says.

As such, Dinneen believes that Trump will defend American businesses, like ethanol, when there are trade disputes. “I could see, in some of our trade issues, a real advocate in the White House and someone who will stand up with us, as opposed to watching us fight some of these trade battles. Quite frankly, that will be a refreshing change.”

Ethanol Friendly
Growth Energy CEO Emily Skor also expresses confidence the new president and his administration will be advocates for ethanol.

“We would expect for President Trump to follow through on the strong support of ethanol that he expressed throughout this campaign, both in the primaries and the rest of the campaign,” Skor says. “From the start, he has been a very strong advocate of ethanol, of the renewable fuel standard, of commitment to get Americans greater access to renewable fuel because it’s good for the consumers’ pocketbooks, it’s good for America, for American jobs, for rural America. That’s what we expect from a Trump administration.”

The American Coalition for Ethanol also expects the Trump administration will be ethanol friendly, says Brian Jennings, ACE executive vice president.

“We expect the Trump administration to be supportive of ethanol, based on the strong support he demonstrated for ethanol on the campaign trail,” Jennings says. “Particularly in Iowa, Donald Trump on multiple occasions, forcefully made it clear that he is for ethanol, that he is for the renewable fuel standard, that he understands the benefits of ethanol. I know he toured one or two, maybe more, ethanol plants in Iowa while campaigning, so he got to see first-hand the technology, the innovation, the efficiency that ethanol plants showcase. We just feel very confident that support for ethanol complements what President Trump wants to focus on when it comes to supporting American jobs, supporting the American economy, providing regulatory relief to American energy. We feel like the priorities we have for ethanol complement the priorities that he has for ethanol very well.”

The Flip Side
Still, Jennings does have some concerns about the appointments of Pruitt and Perry, he says. “I don’t think there’s any other way to describe it,” Jennings says. “As governor of Texas, Rick Perry was a strong opponent of the renewable fuel standard. He petitioned EPA to waive the RFS. As attorney general of Oklahoma, Scott Pruitt filed a friend of the court brief supporting the American Petroleum Institute and the American Grocery Manufacturers Association and others in their efforts to overturn EPA’s approval of E15. It ultimately failed. Scott Pruitt, also, as attorney general of Oklahoma called the RFS ‘unworkable,’” Jennings says.

But Tom Buchanan, Oklahoma Farm Bureau president doesn’t believe that ethanol supporters have to worry about Pruitt.

“The first thing that I would want the rest of the nation to know about (former) Attorney General Scott Pruitt of Oklahoma is that he is a very fair man and equitable in his decisions that I have seen come down.” Although, Oklahoma does not have a lot of corn acres, the state’s Farm Bureau understands the significance of the RFS to corn farmers and ethanol producers across the United States, Buchanan says.  “I would also want people to understand that President Trump has said that he believes in the renewable fuel standard and will be a supporter of that, and I should tell you, as a nominee to the EPA, I believe that Scott Pruitt will follow the wishes of President Trump.

“(Former) Attorney General Scott Pruitt has shown in Oklahoma not to be an interpreter of statutes, but to implement statutes and to defend statutes and states’ rights, and I look for that same thing to occur when he goes to (Washington) D.C. as administrator of the EPA,” Buchanan says. I look for a complete turnaround for agriculture and what the nation has seen from administrators who want to interpret and put their own slant or an administration’s slant on their program, on the EPA implementation of statutes, to one that will be an EPA administrator who absolutely implements the intent of the Congressional legislation, not his own interpretation,” Buchanan says. “What I’ve seen the EPA do in the recent past is to pick winners and losers in the energy industry and that is not what I believe a Scott Pruitt administrator of EPA will do.”   

Jennings acknowledges that Trump has expressed support for ethanol, but history has shown that things could change once he assumes office, he says, and that means that the industry needs to be proactive.

Advocating for Ethanol
“It doesn’t take a lot of memory to remember that, as a senator, Barack Obama was an enthusiastic supporter of ethanol and the anticipation was, once he became president, we would see his administration provide enthusiastic support for ethanol,” Jennings says. “However, his two EPA administrators, Lisa Davis, the first, and Gina McCarthy, the current and longer-serving, have not been enthusiastic supporters of ethanol. In fact, it can be argued, despite the fact that Barack Obama supported ethanol on the campaign trail, it was his EPA that took RFS off track for a two- to three-year period by reducing the volumes below what Congress had called for in the statute, by buying into the oil company blend-wall myth and by artificially holding back how much ethanol American consumers could use,” Jennings says.

That’s why he believes the ethanol industry should make sure the administration carries out his vision and publicly supports ethanol. The American Coalition for Ethanol issued a call to action in December asking its members to contact their U.S. senators. “Every cabinet position requires a confirmation vote in the U.S. Senate,” Jennings says. “Scott Pruitt needs 51 votes in the U.S. Senate before he can lead the EPA. We’ve called on our senators, because they will be meeting with Scott Pruitt for coffee or lunch or on a one-on-one basis, to get to know him before they vote for or against his confirmation. We’ve encouraged senators to do their jobs and that is, to vet Scott Pruitt carefully, to ask him about his past opposition to the RFS, his past opposition to E15, to ask him whether he will stand with President Trump to now be for the renewable fuel standard, to now be for E15.”

Skor believes that it is important that the ethanol industry work with the incoming administration and get down to specifics.

“We need to sit down and make sure the people who are implementing the policies understand what Trump means when he says, ‘I want to be supportive of greater access to renewable fuels and we want to have a strong renewable fuels standard,’” Skor says. “What does that mean exactly, when you get to the nitty gritty details? It’s up to us sit down and have an ongoing conversation of what that means and how do we work together to make sure that the policies reflect the priorities of President Trump. I think the confirmation hearings are a very important part of that process and we look forward those hearings in the weeks ahead,” she says.

Author: Ann Bailey
Associate Editor, Ethanol Producer Magazine
701-738-4976
abailey@bbinternational.com