No Giant Package Necessary

FROM THE NOVEMBER ISSUE: Trump Administration's promised "giant package" is not a hand-out to the U.S. ethanol industry.
By Ron Lamberty | October 14, 2019

By the time you read this, we may finally have details of the “giant package” President Donald Trump promised to farmers and ethanol producers when he tweeted, “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!”

While it takes nearly every fiber of my being to resist the low-brow comedy opportunities embedded in that tweet, there is another comedy bit I’ve been thinking of as each version of the “giant package” is leaked by the White House to find out if it will appease “the farmers.” It’s part of Chris Rock’s “Bring the Pain” comedy special from the mid-’90s, which I will paraphrase—because the show had a well-deserved TV-MA rating and I want this article to be printable. In the special, Rock talked about people wanting credit for doing things they’re supposed to do. He takes on men who defensively say, “I take care of my kids,” saying,“You’re supposed to,” and mocks the low expectations of guys who say, “I ain’t never been to jail!” asking, “What do you want, a cookie?!”

So far, reported versions of the “giant package” haven’t even included “doing [stuff] you’re supposed to do.” Taking a bunch of stuff from someone and giving part of it back is a lousy gift—regardless of the package it comes in. Contrary to oil industry and media talking point headlines portraying Trump’s attempts to fix what his EPA’s policies have destroyed as a “payoff” or “hush money,” farmers and the ethanol industry merely want the law to be enforced as written—and as practiced throughout the existence of the Renewable Fuel Standard.

The RFS says producers must make 15 billion gallons a year, and EPA is responsible for ensuring that amount of conventional biofuel is sold each year. Some of that annual renewable volume obligation (RVO) is met using credits from other forms of biofuel, or extra biofuel sold in previous years. There is no question EPA has the authority to grant small refinery exemptions (SREs)—although there is considerable debate over conditions that must be met to grant those exemptions.

There is also no question the law requires the total number of gallons in the RVO be assigned to obligated parties. When the RFS was first put in place, all small refiners were exempt, and the annual RVO was divided among obligated parties who were not exempt. That’s what’s supposed to happen each year, so unless the exempted gallons are assigned or “reallocated” to someone in the “giant package,” EPA won’t even be “taking care of their kids.”

Defenders of the Trump EPA dismantling of the RFS argue the agency is simply implementing “the system Congress designed.” Really? Congress designed a system with 36 billion gallons per year of renewables. They designed a system to force oil companies to increase their use of renewable fuel, not to use an amount they’re comfortable with. And more than anything else, Congress didn’t design the RFS as a brain teaser for weaselly oil company and EPA lawyers to get out of.

It’s not a gift or payoff for the executive branch of the U.S. government—the branch responsible for enforcing the law—to enforce the law. We’re just asking them to do what they’re supposed to do.

Author: Ron Lamberty
Senior Vice President
American Coalition for Ethanol