Corn Growers, Oil Refiners At Odds Over Ethanol Waivers

Sep 5, 2019

The Trump administration is caught in the middle of growing tension between farmers and the oil industry.

In a move to help corn growers, President Trump vowed to allow year-round sales of 15 percent ethanol blended fuel, over the more common 10 percent blend. E15 is usually reserved for the wintertime.

But then the U.S. Environmental Protection Agency granted dozens of waivers — including 31 in the last month alone — allowing oil refineries to avoid using more biofuel, like corn ethanol. Those waivers are supposed to go to small refineries experiencing a “financial hardship.”

Rod Weinzierl, with the Illinois Corn Growers Association, said that’s not always the case.

“The controversy is around ExxonMobil, Chevron … some of the very large oil companies who happen to have a small refinery also being granted the waiver, when they are still very profitable as an overall company,” Weinzierl said.

In order to qualify for a waiver, refineries undergo a financial assessment by the Department of Energy, which then makes a recommendation to the EPA. Weinzierl said in some instances, the EPA is acting against the recommendation of the DoE. In other cases, the grounds for “financial hardship” are unclear.

Oil producers and retailers, on the other hand, argue that higher ethanol blended fuel isn’t a viable option for everyone.

Bill Fleischli, with the Illinois Petroleum Marketers Association, said selling E15 requires special infrastructure that can cost thousands of dollars. Others say it’s bad for engines.

But Weinzierl said it’s more sustainable in the long run — both environmentally and fiscally.

“You’re not going to pay for it in a year, but over time, you would pay for it,” Weinzierl said. “There’s other reasons that are preventing certain players in the oil industry to not move towards it, because then they’re using a product that they did not produce.”

During a visit to Illinois last week, USDA secretary Sonny Perdue told farmers President Trump would take action to keep his promise to ethanol producers. It’s not yet clear how or when.

At least 16 ethanol producers have closed since the EPA started issuing waivers, including Center Ethanol near East St. Louis.