Farm industry leaders speak out against SREs

By Matt Thompson | September 26, 2019

Ag industry leaders from Iowa and Ohio say there is no question small refinery exemptions (SREs) issued by U.S. EPA have hurt not only ethanol producers, but farmers as well. Four farmers from the two states took part in a media call Sept. 26 to address the impact SREs have had on their industries.

Kelly Nieuwenhuis, president of the board at Siouxland Energy, member of the Iowa Corn Growers Association, and an Iowa farmer, said the 31 SREs announced in early August “knocked the wind out of the sails, and losses started to mount pretty quickly.” Siouxland is one of several ethanol plants that have announced production cutbacks in recent weeks. Nieuwenhuis said Siouxland Energy made the decision to idle production based in part on the issuance of those SREs. “We decided to not run our plant off of a cliff, and idle it for now, and hope we get some good news from the Trump administration to reallocate gallons.”

Nieuwenhuis and the call’s other participants were clear about what needs to happen to help the ag and biofuels industries alike. “We need the SREs to be reallocated in the 2020 year, without anything else taken away from it,” said Daryl Haack, board member of Little Sioux Corn Processors, treasurer of the Iowa Renewable Fuels Association and Iowa corn farmer.

Ron Heck, secretary of the National Biodiesel Board and Iowa soybean farmer, said the SREs have had an impact on biodiesel facilities as well. “Hundreds of millions of gallons of biodiesel have been waived since 2016 and has sent shock waves across our industry,” he said. “Biodiesel plants are shutting down across the country, not just in Iowa, but in many other states.”

The impacts of the exemptions are also felt in rural communities, said John Linder, incoming first vice president of the National Corn Growers Association and Ohio corn farmer. “Ethanol is a solid market for corn and it is a value-add market which brings a great deal of value beyond just selling grain,” he said. When we make ethanol and coproducts, that becomes economic value to Ohio. … If you can’t value add through ethanol, then you’ve robbed Ohio of some of its opportunity.”

Haack said in recent discussions he’s had with fellow board member about SREs, support for president Trump could be impacted by how exemptions are handled. “They were not real sure how they were going to vote in the coming election,” he said. “They were thinking maybe not voting for the current president, and that’s a concern that he needs to be feeling, the rest of the Senators and Representatives need to be feeling. That this is going to be a problem that farmers and the ethanol industry leaders are noticing and they’re thinking about changes.”

The growers also addressed this disconnect between EPA’s claim that the SREs have not resulted in demand destruction for ethanol. “[Administrator] Wheeler’s comments about overproduction are so off-base and so out of line, they highlight how badly [President Donald] Trump needs to intervene with the EPA,” Heck said. “They simply don’t understand it.”

He added, “This is real. We’re not making this up. These aren’t idle complaints. This is just the situation. The law, the renewable fuel obligation, is not being enforced by the EPA and that needs to change.”