Policy

Ethanol Lobbying Is Up, and It Seems to Be Paying Off

Biofuels groups are spending more this year, and they may soon have summer E15 to show for it

Sen. Chuck Grassley, R-Iowa, holds an ear of corn in 2008. As industry groups have lobbied the Trump administration to rethink the Renewable Fuel Standard, lawmakers in the corn belt have applied pressure too. (CQ Roll Call file photo)

Biofuel groups upped their spending on lobbying this year as they pressured lawmakers and the Trump administration on issues related to the Renewable Fuel Standard, which sets minimum volumes of biofuels to be used to power cars and trucks.

Some of those efforts appear to be paying off for now, as the Trump administration has proposed to allow year-round sales of gasoline containing 15 percent ethanol, or E15, which is currently prohibited between June and September. The EPA had argued previously that E15 contributes more to summer smog than the more commonly sold gasoline with 10 percent ethanol.

According to lobbying disclosures filed with the Senate Office of Public Records, major biofuels groups spent more in the first three quarters of this year than in the same period in 2017 on issues relating to the RFS.

The Renewable Fuels Association spent $1.19 million in that period, up from $908,000 in 2017.

The group, which declined to comment for this article, has been at the forefront of pushing for both E15 and against the EPA issuing waivers to refiners that could not profitably produce the ethanol-blended fuels.

The EPA can temporarily exempt some small refineries from their renewable fuel obligations if they can demonstrate that having to blend biofuels into gasoline is causing them financial hardship. The waivers free the companies from having to blend the biofuels or buy tradable credits used to track compliance with the RFS.

Under former EPA Administrator Scott Pruitt, several large refiners — including San Antonio, Texas-based Andeavor, which is owned by Marathon Oil — were granted such waivers, angering biofuel groups and their congressional backers.

The groups and their congressional supporters, led by Iowa Republican Sens. Charles E. Grassley and Joni Ernst, have sustained pressure on the administration for much of this year, meeting with President Donald Trump at the White House and reminding him of his campaign promise to support corn growers and ethanol producers. The EPA now intends to propose a rule by February on E15 and finalize the rulemaking in May, according to the Unified Agenda, which outlines the administration’s regulatory priorities.

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In a call with reporters on Oct. 25, RFA President and CEO Geoff Cooper said he was optimistic that the EPA can complete rulemaking in the ambitious timeline it has set.

“We are certainly hopeful that it will be done, but it’s certainly going to take the pedal to the metal if that’s going to be done,” Cooper said in the call that also included an engineering and auto industry expert to counter oil industry arguments that E15 is damaging to some engines.

The Advanced Biofuels Association spent $320,000 from Q1 to Q3, up from $270,000 in the same period last year, and is on pace to surpass the $360,000 it spent overall in 2017.

Growth Energy, another biofuels trade group, spent $1.37 million between January and September, up from the $1.14 in the same period last year, the public records show. While spending during the third quarter alone was $5,000 less than the $405,000 in Q3 2017, this year’s overall spending has already exceeded the $1.35 million the group spent last year.

“Growth Energy is continuing to make sure that Congress and the administration understand our members’ perspective on top issues, such as protecting the RFS, year-round E15, and the harmful impact of the EPA’s excessive granting of small refinery waivers,” spokeswoman Leigh Claffey said in an email.

The groups lobbied on a number of RFS-related bills, including HR 1311 by Nebraska Republican Rep. Adrian Smith, and the related S 517 by Sen. Deb Fischer, that would ease limits on E15. The groups also pushed against bills like HR 1315 by GOP Rep. Bob Goodlatte of Virginia, which would reduce the volume of biofuels mixed in transportation fuels, and HR 1314, which would repeal the RFS program.

New plant

Sioux Falls, South Dakota,-based biofuels producer POET LLC spent $1.47 million on lobbying from January to September this year, up from $1.28 million in the same period in 2007. It spent $720,000 in the third quarter, up from $580,000 in the same period last year. The company said after Trump’s decision to support year-round E15 sales that it would build a new biofuel plant in Shelbyville, Indiana.

“This is the right project in the right location at the right time,” POET CEO Jeff Broin said in an Oct. 26 news release, although the company declined to comment on its lobbying activity. “Farmers desperately need the income boost from this new market for grain, and President Trump’s recent announcement of year-round E15 sales has the biofuels industry poised for new growth and prosperity.”

Even as the biofuels industry pushes for higher ethanol blends, some Democrats in Congress who once supported the RFS now worry about environmental harm as wildlands are converted to corn and soybean farms. They're joined by oil patch lawmakers like Senate Environment and Public Works Chairman John Barrasso of Wyoming and Sen. James M. Inhofe of Oklahoma who have taken the side of the oil industry, which has called for a repeal or overhaul of the RFS.

The competing views in Congress could complicate any passage of RFS legislation. And the leading oil trade group, American Petroleum Institute, has vowed to sue the Trump administration if it writes a rule to lift the summer ban on E15 sales.

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The White House has not made a decision yet on the hardship waivers, although the EPA has taken steps to increase transparency on the exemptions after calls from opponents that it was shrouded in secrecy. Biofuel backers say the waivers hinder demand for their products and are sometimes given to refineries that cannot demonstrate that they are financially struggling.

“There is really demand destruction from those waivers,” Paul Winters, a spokesman for the National Biodiesel Board, said of one the group’s top lobbying issues, which also includes a push for a now-expired biofuels tax credit.

Winters said demand for about 300 million gallons of biodiesel has been lost because of the waivers, which were intended for struggling refiners.

“We are going to continue to ask our congressional champions to echo our message,” Winters said.

American Fuel and Petrochemical Manufacturers, a trade association that represents refiners and has spent less this year so far on lobbying, did not directly talk about the group’s strategy but said the decision to lift E15 restriction is unlawful and would add to problems surrounding RFS.

“AFPM has been very clear that we believe the President’s proposal to waive the rules for E15 is unlawful,” AFPM President and CEO Chet Thompson said in an emailed response. “We are certainly considering our options to counter this proposal and continue to push for reform of the RFS that works for all stakeholders.”

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