Since Trump became president, the EPA has given 85 oil refineries exemptions from blending ethanol into the gasoline they sell. That has removed 4 billion gallons of corn-based ethanol from the market, angering farmers who rely on the ethanol industry to buy nearly 40% of the corn crop produced to make the renewable fuel additive.
After months of pressure from farmers, trade groups and lawmakers and governors in farm states, Trump on Oct. 4 announced plans to require oil refineries to replace the ethanol gallons lost through the exemptions.
Farmers and lawmakers say the EPA had agreed to add waived ethanol back into the fuel supply by calculating the amount waived over a three-year period, which would add about 1.3 billion gallons (2.5 billion imperial gallons) of biofuels back into the nation's fuel supply next year. That would ensure that beginning in 2020 the government would comply with the 15 billion gallon (12.5 billion imperial gallon) standard already required under federal law. The deal would not restore the already lost biofuels, a compromise the industry was willing to make in exchange for an EPA promise to change policy going forward.
On Tuesday, the EPA released the draft rule that would use a three-year average of gallons the Energy Department recommended waiving instead of the actual waived amount, increasing biofuels blending by about 770 million gallons (641 million imperial gallons), about half of what the industry expected.
The exemptions were designed to ease the burden on small refineries that might not be able to economically blend required ethanol amounts, but the EPA under Trump has allowed exemptions for profitable larger refineries.
The exemptions have led to the closing of 20 ethanol plants nationwide, Shaw said.
"My personal perspective is that President Trump has lost a lot of support," said Kelly Nieuwenhuis, a farmer in Primghar in northwest Iowa and board president of an idled ethanol plant in Sioux Center. "Pretty much everyone I have talked to that's involved in agriculture and the biofuels industry have really lost trust and are really frustrated."
Iowa Corn Growers Association CEO Craig Floss said corn farmers are outraged.
A spokesman for the EPA said in response to an email seeking comment that the draft rule "is the text of the agreement negotiated by President Trump, USDA and EPA that was announced on October 4."
The EPA will take comments for 30 days, hold a public hearing on Oct. 30, then release a final rule.
Shaw said Trump could regain some trust by forcing the EPA to stand by the deal that was made on Oct. 4.
"I don't think it's too late to get this back on track and restore some of that confidence," he said. "But if it's finalized as it is it becomes Trump administration policy and the buck stops at the Oval Office."