As published in Morning Consult
By Emily Skor
December 4, 2018
It’s been a tough year for rural America. Inclement weather disrupted the harvest in many areas, and trade disputes placed international shipments on hold. Our farmers need certainty and market access for their products, and history shows that homegrown biofuels such as ethanol can deliver.
In fact, the Renewable Fuel Standard has been one of our country’s great success stories. It provides motorists with more affordable choices at the pump, keeps the air clean, and drives demand for our corn farmers, who harvest the feedstock for renewable biofuel.
Each year, under the RFS, the Environmental Protection Agency is responsible for showing how it will grow America’s use of renewable biofuels. RFS targets are called renewable volume obligations, and they ensure that petroleum interests can’t squeeze out their renewable, low-carbon competition. The final 2019 RVO numbers were set last week, providing a market for 19.92 billion gallons of biofuel, including 15 billion gallons of conventional biofuels.
Unfortunately, those numbers don’t tell the whole story. Under federal law, the EPA may provide special “economic hardship” exemptions to “small” refiners facing unique circumstances. Most importantly, however, the refiners must face “disproportionate economic hardship” in order to qualify for the exemption.
On Nov. 20, it was revealed that the previous EPA administrator, Scott Pruitt, granted one of those handouts to a familiar oil giant, Chevron Corp. In 2017, Chevron reported a net income of $9.2 billion. By any measure, it’s hard to imagine how anyone could define “small” or “disproportionate economic hardship” to include a company generating $9.2 billion in net income.
But this is only the most recent example. Over the last two years, the agency has granted dozens of exemptions under the RFS to some of the most profitable refiners in the country, destroying demand for 2.25 billion gallons of American-made ethanol.
This fall, the University of Missouri’s Food and Agricultural Policy Research Institute released a study showing that, if the EPA continues to follow recent practices on refinery exemptions, the market for U.S. corn will shrink by an additional 1.5 billion bushels between 2018 and 2023, helping drive farmers into bankruptcy and drying up businesses in rural America.
It’s important to recognize that the 2019 RVO numbers released last week hold strong promise, with a commitment to traditional biofuels and 418 million gallons of cellulosic biofuels. But the latest EPA rule is also a missed opportunity to correctly account for billions of gallons of biofuels lost to unwarranted refinery exemptions. Until these are addressed properly, we’re still taking two steps back for every step forward.
Acting EPA Administrator Andrew Wheeler has a valuable opportunity to chart a new course for biofuels and rural America. To reverse the damage done by his predecessor, Wheeler must follow the law and reallocate lost gallons, ensuring the targets set by Congress are actually met. This would give farmers the boost they need to keep the rural economy moving.
Emily Skor is CEO of Growth Energy.
For more information, please contact Director of Communications Leigh Claffey.
WASHINGTON, D.C. – Today, Growth Energy CEO Emily Skor submitted written comments on the Internal Revenue Service’s (IRS) proposed regulations under section 45Q, a performance-based tax credit for carbon capture projects. In her letter, Skor called on the agency to offer credit for carbon dioxide captured for food and beverage purposes, which would promote investment […]
This week in our “Conversations with Biofuels Champions” summer video series, our CEO Emily Skor visited with one of our top champs in the House of Representatives: U.S. Congresswoman Cheri Bustos of Illinois. Born in Springfield, Illinois, Congresswoman Cheri Bustos comes from a long line of farmers and teachers and a deep appreciation for being […]
CEO @GrowthEnergy tells IRS how #ethanol plants can lead the way on #carbon capture https://t.co/xiHAipVJpI
As @RepCheri Bustos says here, the biofuels industry has a cascading effect on agriculture — it promotes strong supply chains and multiplies rural economic output. Abuse of the Renewable Fuel Standard through refinery exemptions only serves to harm the ag economy. https://t.co/pvW7P4yZ4F
The future of fuel — increased engine performance, lowering our carbon footprint, and eliminating toxic fuel additives — is already here. At @EESI's Clean Energy Expo, Growth Energy SVP of Regulatory Affairs Chris Bliley laid out the benefits that expanding ethanol can bring. https://t.co/aW5v9A4prB
In a letter to the IRS, GE CEO @EmilySkor proposes applying the 45Q performance based carbon tax credit to carbon capture projects at ethanol plants as a way to incentivize and expand their further use. Biofuel producers are ready to do more! See the letter here: https://t.co/MtEDPF0jKy