By JORDAN STRICKLER

Kentucky Correspondent

WASHINGTON, D.C. — President Trump directly authorized the U.S. EPA to approve Renewable Fuel Standard (RFS) waivers for 31 of 38 small refinery applications, according to an August 16 Reuters report.

Although waivers were fewer than in previous years and this marked an increase in the number of petitions rejected, the decision to provide waivers from the country's biofuel mandate have infuriated ethanol and corn interest groups.

“For the duration of his campaign and presidency, Donald Trump has declared his support and appreciation for American farmers and ranchers, frequently calling them ‘great patriots,’” said National Farmers Union President Roger Johnson. “But it has become abundantly clear that he is talking out of both sides of his mouth.

“He may say he loves farmers, but his actions say otherwise – in the past two-and-a-half years, his administration has destroyed our reputation as a reliable trading partner, and his EPA has sabotaged the American biofuels industry in order to line the pockets of oil executives. Together, these efforts have destroyed our markets and threatened our very livelihoods.”

A few days after the announcement, Trump spoke at Shell's new soon-to-be completed Pennsylvania Petrochemicals Complex about growth in the oil and natural gas industries, saying, “This would have never happened without me and us."

The waivers exempt an estimated 1.43 billion gallons of renewable fuel, which is second only to the 1.8 billion gallons exempted in 2017. Under the federal Clean Air Act, small refiners producing fewer than 75,000 barrels per day are eligible to apply for a waiver if complying with the RFS would cause the facility disproportionate economic hardship.

Some facilities which reportedly received waivers were owned by well-known large oil companies. "There is simply no legal or economic justification for more handouts to oil giants like Exxon and Chevron – especially when those exemptions come at the expense of families facing the worst rural downturn in modern memory," said Brooke Coleman, executive director of the Advanced Biofuels Business Council.

"The Bureau of Economic Analysis reports that farm income is down 49 percent since the end of 2018. Biofuel plants across the Farm Belt are closing their doors."

This brings the number to 85 for the number of waivers EPA has granted for the 2016, 2017, and 2018 RFS compliance years. These come at a bad time for farmers, with farm income projected to be at $69.4 billion for the year.

If accurate, this would be the third time since 2015 that income will not exceed $70 billion. This is far below levels earlier this decade, when a seven-year commodity boom propelled income to a record $123.4 billion.

Biodiesel is also feeling the pinch. Last month, EPA announced that biomass-based diesel and advanced biofuel volumes for 2021 will remain unchanged. A University of Illinois study stated the damage to the U.S. biodiesel and renewable diesel industry could reach $7.7 billion, or 2.54 billion gallons, said Kurt Kovarik, vice president of Federal Affairs for the National Biodiesel Board.

"President Trump is bowing to oil industry pressure and allowing his EPA to dismantle the Renewable Fuel Standard program, force U.S. biodiesel producers out of business, and undermine the farm economy," he said. "EPA and administration personnel are well aware that the ongoing spree of Big Oil exemptions destroy demand for biodiesel and render the RFS program meaningless. Biodiesel producers are already shutting down facilities and laying off workers, due to loss of demand.”

Recently, the Advanced Biofuels Assoc. sued to block the EPA from granting ethanol waivers; however, the U.S. Court of Appeals for the District of Columbia denied the group’s request for a temporary injunction.

Some applaud the waivers. “I am glad the EPA recognized that exemptions from the Renewable Fuel Standard are necessary for small refineries to compete,” said U.S. Sen. Mike Enzi (R-Wyo.). “The energy industry is essential to Wyoming’s economy and our nation’s energy independence. This decision to grant waivers for refineries that would otherwise see severe economic harm is good for workers in Wyoming and across the country.”

Last month, Enzi joined a letter led by fellow Wyoming Sen. John Barrasso asking Trump to prohibit Secretary of Agriculture Sonny Perdue from influencing or interfering with the decision-making process over petitions for hardship relief from small refineries.

CountryMark, an Indianapolis-based farmer-owned crude and oil refinery cooperative that markets renewable fuel, including ethanol and biodiesel blends, received a waiver for 2017. That year, the company said the RFS compliance cost was its third-highest expense, totaling $19.2 million.

Matt Smorch, vice president of Refining and Logistics at CountryMark, said the waivers are actually good for agriculture. “CountryMark believes renewable fuels are good for farmers and the U.S. economy. CountryMark has not made any changes in our continued support of renewable fuels since receiving the small refiner exemption.

“In fact, year-over-year, our purchase volumes of both ethanol and biodiesel have increased, due in part to blend incentives offered to CountryMark member customers.”

As a refiner of both gasoline and diesel products, the co-op is an obligated party under the RFS, which means it generates Renewable Identification Numbers when purchasing and blending ethanol and biodiesel. In 2018, the company’s renewable fuel purchases included more than 20 million gallons of ethanol and more than 5 million gallons of biodiesel.

“The small-refinery exemption was put into law to protect refineries that operate primarily in rural communities across the country,” said Smorch. “Essentially, the small refinery exemption is about protecting local jobs.  Comparing our RFS compliance cost in 2017 to our net income shows the economic impact was truly disproportionate for our small refinery.”