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DAVID KRUSE

Trump silent on RFS

October 27, 2017
Farm News

President Trump has said a lot of things about a lot of things. He also let it be known that it is what he says, not his cabinet members or administration officials, that is to be taken as the official word. What Secretary of State Tillerson said about negotiating with North Korea did not matter. Trump's word was final and he gave it without hesitation on everything from taking a knee at NFL games to how little he thinks of the Puerto Rican work ethic.

Relative to the ag sector it was not what he said recently, but what he didn't say that is ringing in my ears. What President Trump did not tweet was, "Scott Pruitt/EPA will leave the RFS intact. . . I strongly support ethanol! #" I was there at the Iowa Renewable Fuels Association Summit to watch Donald Trump stand up in front of the ethanol industry when he wanted their votes in Iowa and strongly express his support for ethanol and biofuel.

The Branstad's, father Terry and son Eric, cheered the loudest and Governor Branstad was rewarded with the Ambassadorship to China while Eric joined the campaign and then the Trump administration. Imagine the consternation then when elected president, Trump then appointed anti-RFS petroleum refinery owner Carl Icahn, his advisor on deregulation, OK Attorney General and oil industry representative anti-RFS zealot, Scott Pruitt to head EPA and Rick Perry who attempted to get a waiver to have Texas exempted from the RFS as TX Governor, as head of DOE. That was a trifecta of ethanol/RFS opponents appointed to the positions that would regulate and execute the RFS. I likened it to putting three foxes in the chicken house and I predicted that there would eventually be dead chickens, regardless of what the wolf in the White House said about his support of ethanol.

By and large the ethanol industry is Republican with the executive director of the IRFA, Monte Shaw, having run for the GOP nomination for Congress. I asked Shaw what he thought about the Trump appointments and like other sector Republicans including Senator Chuck Grassley, he expressed concern but also confidence in relying on President Trump's promise to support the industry. That was not enough to reduce my skepticism or gain confidence that if given the chance to eat a chicken, that a fox can resist his natural urge to do so.

The industry has been pushing EPA for the same vapor waiver for E-15 that E-10 has for summer use. It was not forthcoming from the Obama Administration but the industry felt that the waiver should be approved given Trump's support for ethanol. Don't hold your breath. . . Pruitt will never approve the waiver. Scott Pruitt has worked for petroleum/fossil fuel energy industry interests for many years to the point of letting them use his letterhead as OK Attorney General. That is why Carl Icahn, who wanted his obligation to comply with the RFS by blending biofuel or buying RINs eliminated by EPA, recommended Pruitt for the job.

Pruitt recently announced that they were rolling back the already set biodiesel volumetric RFS target, shocking the biodiesel industry sending the soyoil market into a tailspin. He also announced that they planned to assign RINs to exported ethanol which was not previously counted under the RFS which will effectively dilute the incentive to blend ethanol by expanding the supply of RINs. Instead of expanding ethanol demand, this could reduce domestic consumption by over a billion gallons. The fox was very busy in the RFS hen house.

IA Senator Chuck Grassley rushed to the Senate floor to give a speech denouncing the EPA action against the biofuel industry calling Trump's purported support for biofuel against Pruitt's actions "bait and switch". Grassley demanded a meeting with Pruitt but the fact that he had to have this argument means that he is in a position of weakness having been lied to in his Senate office or so he claimed.

While Trump immediately rolled back comments of other administration officials that he didn't agree with on other issues his lack of a statement on Pruitt's EPA plans to undermine the RFS must mean he is not the big RFS supporter that he had promised to get votes. He has not stopped the fox in the EPA chicken house from going after the chickens. These were only a couple anti-biofuel actions taken by Pruitt. There are more in other ways such as rolling back CAFE fuel standards which currently support ethanol octane demand. Donald either is incompetently managing his EPA subordinate to implement the RFS policy that he wants or Pruitt thinks he has the green light to go after it every way that he can. Someday after he leaves government Scott Pruitt will be rewarded with board seats and stock options from petroleum companies for all the good work he is doing for them today undermining the RFS for them as EPA administrator. That is how this works.

If Trump was going to box the foxes ears for going after the RFS chickens, he should have done it already as his silence on Pruitt's actions only suggests he is either not paying any attention or Pruitt is doing what the boss wants. . . neither of which is good for our future.

Circling back to biofuel. . .Scott Pruitt said that he was going to roll back the RFS and President Trump has been radio silent for days now after. Where is this pro-ethanol grand poohbah that the ag industry voted for? Yeah, I am angry. So, we get rid of WOTUS . . . like I will even notice. . .while ag interests in labor, trade and biofuel policy get run over. Tweet something Donald!

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.

 
 

 

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