Klobuchar says Trump administration "gut punched" renewable fuels industry

By Adam Brewster

/ CBS News

Minnesota Senator and Democratic presidential candidate Amy Klobuchar said the Trump administration has "gut punched" the renewable fuels industry — and farmers in the Midwest — with recent waivers for small refineries that let them avoid blending biofuels, such as ethanol, into gasoline. "It's bad for Iowa, it's bad for the Midwest and it's another example of him not keeping his promise," Klobuchar said.

Earlier this month, the Environmental Protection Agency granted 31 small refinery exemption waivers, meaning the refineries don't have to comply with federally required levels of biofuels blended into gasoline.

Klobuchar denounced the decision alongside former Iowa Governor and U.S. Secretary of Agriculture Tom Vilsack and former National Corn Growers Association President Pam Johnson on the steps of the Iowa State Capitol on Tuesday afternoon.

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The waivers set off a flurry of criticism from the renewable fuels industry and farmers.

According to the EPA, a waiver is granted if a refinery can demonstrate that it would suffer "disproportionate economic hardship" from complying with biofuel blending standards. But Klobuchar said it's now partly being used to help major oil companies.

"Instead of the narrow focus that it was supposed to have, which was used in the past for small refineries, now it's moved to Chevron and Exxon and major, major oil companies," Klobuchar said. If elected, Klobuchar added, she would review the process being used to grant waivers, acknowledging some may be needed.

During the first three rounds of waivers granted by the Trump administration, 85 small refinery waivers have been granted, exempting over 4 billion gallons of biofuels from being blended in, according to EPA data. During final three rounds under President Obama's administration, 23 waivers were granted and 690 million gallons were exempted.

The ethanol industry contributed $46 billion to the nation's gross domestic product in 2018, according to the Renewable Fuels Association. Ethanol supporters say it provides cleaner fuel, reduces greenhouse gas emissions from cars and paves the way for more efficient fuels in the future. Critics of the industry say ethanol production isn't cost effective, leads to greater greenhouse gas emissions overall, and is bad for the environment.

Also on Tuesday, Iowa Governor Kim Reynolds, a Republican, said she is pushing the Trump administration to restore ethanol demand lost from the waivers. Reynolds said she has calls scheduled with Energy Secretary Rick Perry and Vice President Pence and has already spoken with President Trump, EPA Administrator Andrew Wheeler and Agriculture Secretary Sonny Perdue.

"I'm just not sure that he fully understood maybe the ramifications of what that means. I would say that he has a pretty good idea now of what those ramifications entail," Reynolds said of her recent call with Mr. Trump, according to the Des Moines Register.

Reuters has reported the Trump administration is considering ramping up biofuel blending quotas in response to backlash to the small refinery waivers. The White House didn't comment on those discussions.

In June, Mr. Trump visited Council Bluffs, Iowa, to discuss a new EPA rule that allows E15, which is gasoline blended with 15% ethanol, to be sold year-round. That move that was cheered by the industry.

"It's been a goal of the industry for some time to see that happen," said Mike Jerke, CEO of Southwest Iowa Renewable Energy, a company where Mr. Trump touted the rule change in June. Jerke said the president delivered on that promise for the ethanol industry, but that his record is mixed.

"It was clear in both the one-on-one sessions and in the public remarks that one thing that could undo the good that E15 was bringing to the farmers and to the ethanol industry would be the allowance of additional small refinery exemptions," Jerke said. "Actions speak louder than words."

The ethanol refinery waivers and the president's trade disputes are testing the patience of some farmers, said Curt Mether, a corn and soybean farmer from Logan, Iowa, who is also president of the Iowa Corn Growers Association. He said the agriculture economy is "really bad," partly due to the president's policies, which is contributing to farmers' "mental fatigue" after a wet spring and late planting season.

"You get the trade negotiations that are hard on their attitudes or their minds. And then you also get these refinery waivers," Mether said. "They're just beating you down again and again."

Mether voted for Mr. Trump in 2016, but is still deciding whether he we will support the president again in 2020. He said that if he does, it won't be because of economic policies, but because of the president's conservative stance on other issues.

"A lot of farmers that are along my line of thinking that voted for him last time, they could just not vote this time." Mether said. "They probably won't vote for his opponent, but they might not vote for him."

First published on August 28, 2019 / 9:00 AM

© 2019 CBS Interactive Inc. All Rights Reserved.

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