Washington — An agreement brokered by the White House to reform the US biofuel mandate is a "bad deal" for ethanol producers and farmers, even though it expands sales of higher-ethanol blends, Senator Joni Ernst said Tuesday at the S&P Global Platts Energy Podium.
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Ernst, Republican-Iowa, has been at the negotiating table for several rounds of White House talks on reforming the Renewable Fuel Standard. The last session on May 8 ended with an agreement to approve year-round sales of E15, or gasoline blended with 15% ethanol, and allow ethanol exports to receive Renewable Identification Numbers.
Ernst said President Donald Trump told his chiefs of the Environmental Protection Agency and Agriculture Department at the end of the meeting to sort out the details. The administration has not announced how it plans to make the policy changes.
Ethanol credits have crashed 74% since the start of the year as Washington debates reforming the US biofuel mandate and in response to EPA's expanded use of waivers exempting small refineries from the policy.
S&P Global Platts assessed D6 ethanol RINs for 2018 compliance at 18.25 cents/RIN Monday, down 29% week on week.
Ernst said allowing US ethanol exports to earn RINs will flood the market with RINs, raise exports and invite pushback by other countries that receive a surge of US supply.
RINs are tradable credits EPA issued to track production and use of alternative transportation fuels. For corn-based ethanol, one gallon of ethanol yields one RIN.
'AS SWAMPY AS YOU GET'
Ernst said she last spoke to Trump on Thursday and urged him to consider the deal's negative impacts on farmers that helped elect him.
She added that EPA's expanded use of hardship waivers to the RFS was eroding biofuel demand, and Administrator Scott Pruitt was breaking a promise Trump made to rural America.
However, Ernst said she would not call for Pruitt's resignation or use the issue to block nominees to lower EPA offices.
"I am hopeful that the president will just recognize that Mr. Pruitt is breaking our president's promises to farmers and at some point he will say, 'It's time for you to go.' But that's up to the president to make that call. I will remain highly critical of Administrator Pruitt," Ernst said.
Ernst, who supported Pruitt's nomination, said "a number of other transgressions" have shown he misspends money and misuses his office.
"He is about as swampy as you get here in Washington, DC," Ernst said.
EPA has granted 25 hardship waivers to the RFS for 2017 compliance out of 33 applications received so far.
The RFS allows EPA to grant hardship waivers to the biofuel mandate for plants that process less than 75,000 b/d of crude. It has accelerated its use of the waivers under Pruitt, leading farm-state senators and biofuel groups to accuse him of finding a backdoor way to undermine the biofuel mandate.