Farmers say family farms are at stake under EPA rule proposal10/31/2019 | Biodiesel, Policy, Economics
By Joseph L. Murphy, ISA director of communications
A delegation of Iowa Soybean Association farmers and staff traveled to Ypsilanti, Michigan, yesterday to provide comments at an EPA public hearing concerning proposed volumes for 2020 and biomass-based diesel volume for 2021.
The testimony was given in response to EPA Administrator Wheeler's proposal to adjust how annual renewable fuel percentages are calculated. This proposal, biofuels industry members said, will undercut 15 billion gallons of renewable fuels promised by the Trump administration on Oct. 4.
"This EPA, Administrator Wheeler and this administration are putting the petroleum industry ahead of American farmers," Morey Hill, an ISA district director from Madrid and an American Soybean Association director serving on the biodiesel committee, said. "How can you folks sit there and tell me this is the right thing for our country when folks in the Midwest and every rural economy is suffering?"
The EPA is seeking comment on the proposal, which would project the volume of gasoline and diesel exempted in 2020 due to small refinery exemptions using a three-year average of the relief recommended by the Department of Energy (DOE). This includes instances in which the DOE recommended partial exemptions. According to a statement, the EPA intends to grant partial exemptions in appropriate circumstances when adjudicating 2020 exemption petitions.
Farmers believe the EPA rule runs counter to what President Trump agreed to when he met just last month with Midwest agriculture leaders and elected officials. If left unchallenged, the rule will further gut the Renewable Fuel Standard (RFS), kill even more demand for soybeans and biodiesel and shutter additional biofuels facilities.
Hill and Ewoldt testified that farmers across the Midwest are struggling with too many headwinds that take away their hope of financial stability. Between a dwindling demand for soybeans stemming from continued tariffs in China, low commodity prices and weather occurrences that prevent farmers from planting and harvesting on time, the two farmers shared the dire need for domestic policy issues that help — not hinder — American farmers.
The current EPA proposal would account for only 770 million gallons annually in expected exemptions. The average was 1.35 billion gallons from 2016 to 2018. Grant Kimberley, executive director of the Iowa Biodiesel Board and senior director of market development for ISA, said the exemptions would cut into the earlier promised 2.43 billion gallons of biomass-based diesel to be blended into the nation's fuel supply beginning in 2020. It also doesn't account for increased volumes in 2021 and beyond.
"I'm afraid this administration has lost touch with the folks that ultimately put it in office," Robb Ewoldt, an ISA director from Davenport, testified. "To say these waivers don't destroy soybean demand and impact a farmer's bottom line is laughable. These waivers have cost me $100,000 of gross revenue this year alone. That's real money. Tell me that's not a big impact."
The uncertainty of the RFS is already impacting the state, according to Iowa Secretary of Agriculture Mike Naig. The renewable fuels industry accounts for more than $5.3 billion — or about 3% — of Iowa's GDP, Naig told EPA officials. The industry supports $2.5 billion in household income and more than 48,000 jobs in the state.
"We have too much to lose to sit idly by and watch the EPA make reckless decisions that harm thousands of Iowa families," he said. " Small rural communities in my home state, like Crawfordsville, Merrill and Sioux Center, where ethanol plants have shut down, are feeling the effects first-hand.”
Iowa is the nation's leading biodiesel-producing state, with 11 plants making about 365 million gallons in 2018. W2 Fuel in Crawfordsville, a 10-million gallon per-year biodiesel plant recently shuttered operations. Other facilities in the state and across the country are running at reduced capacity.
Roy Strom, president and CEO of W2 Fuel, also traveled to Ypsilanti to testify how the EPA's small refinery exemptions (SRE) have put him out of business.
"I had to sit down with 42 employees and tell them they were losing their jobs," Strom said during an interview after his testimony. "The continued granting of waivers is far above and beyond anything that has ever been done under the Trump administration and the EPA administrators. It has created a market condition that doesn't allow us to run. There's no way I can continue to run and make payroll."
After the hearing, a 30-day comment period opened seeking public input. It is open through Nov. 29. The EPA plans to finalize the rulemaking later this year.
“The EPA’s proposal once again pulls the rug out from under my feet and every farmer out there just trying to get by,” Hill said. “Biodiesel producers severely impacted by the lost demand these SREs create have already shuttered their doors. Each time another door closes, the future of my farm gets even more uncertain.”
ISA Public Relations Manager Katie James contributed to this story.
Contact Joseph L. Murphy at email@example.com.
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