Senator Grassley and Governor Reynolds Growing Impatient for Biofuels Deal with Trump Administration

This week, Sen. Chuck Grassley (R-IA) expressed his frustration with the Trump Administration over its delay to produce a biofuels package that would assist biofuel producers. Speaking to reporters this week, Sen. Grassley stated, “This agreement we have with the White House, it’s 15 billion gallons, why isn't that the end of it? Let's either do our job or get off the pot. Let's call this thing to an end. We ought to have this paper from the EPA yesterday.”

Grassley was referring to the potential deal brokered between midwestern senators and the Trump Administration two weeks ago after Vice President Mike Pence met with Sen. Grassley and other midwestern senators to discuss the issue of small refinery exemptions (SRE’s) and what the administration can do to help farmers. According to reports, the potential deal would include a limit to the number of SRE’s that EPA issues, an increase in the volumes of biofuels that must be blended into gasoline to 15 billion gallons and efforts to boost the spread of E15.

Sen. Grassley said that the delay is “hurting the president more in Iowa than even the China debate,” referring to the trade war with China that is hurting rural farmers. He added, “I think farmers have patience with China, the negotiations going on with China. They know China has been cheating. What they don't understand is, they're promised 15 billion gallons of ethanol to be used but get 13.6 [billion gallons].” On Tuesday, an Iowa biodiesel plant, W2 Fuel, announced that it would be shutting down. Iowa Gov. Kim Reynolds (R-IA) responded to the news saying that the SRE’s are hurting farmers in the state and something must be done to assist them. Gov. Reynolds attended the meeting with Sen. Grassley and other midwestern senators two weeks ago.

The administration is taking this action in order to shore up support among farmers who are angry over falling crop prices from stagnant ethanol blending volume and loss of market share due to the recent increase in SRE’s and the ongoing trade war with China. However, the Trump Administration’s plan is unlikely to satisfy renewable fuel producers because the higher blending volumes are not enough to offset the 4.2 billion gallons of renewable fuel lost to SRE’s. The plan’s expected unveiling could happen as soon as October 1.