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Trump orders biofuel boost in bid to temper farm state anger

Jennifer A. Dlouhy and Mario Parker, Bloomberg News on

Published in Business News

WASHINGTON -- President Donald Trump, seeking to tamp down political fallout in U.S. farm states essential to his re-election, has ordered federal agencies to shift course on relieving some oil refineries of requirements to use biofuel such as corn-based ethanol.

Trump and top cabinet leaders decided late Thursday they wouldn't make changes to just-issued waivers that allow small refineries to ignore the mandates, but agreed to start boosting biofuel-blending quotas to make up for expected exemptions beginning in 2021. The outcome was described by people familiar with the matter who asked not to be named before a formal announcement could be made.

The decision was reached after a flurry of White House meetings this week on the issue, which divides two of Trump's top political constituencies: rural Americans and the oil industry. With the move, Trump is largely siding with farmers, ethanol producers and political leaders in Iowa that have accused the president of turning his back on the industry. But the administration's shift risks blowback in Pennsylvania and other battleground states, where blue-collar refinery workers have held rallies to push for relief from U.S. biofuel quotas they say are too expensive.

Representatives of the White House press office did not have an immediate comment.

Encouraging E15

Administration officials agreed to the broad contours of a renewable fuel plan, including further moves to encourage the use of E15 gasoline containing 15% ethanol, beyond the 10% variety common across the U.S.

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Under the tentative plan, the Environmental Protection Agency will also give a 500 million gallon boost to the amount of conventional renewable fuel, such as ethanol, that must be used in 2020. A separate quota for biodiesel, typically made from soybeans, would get a 250 million gallon increase.

The EPA has drawn intense criticism for its Aug. 9 decision to exempt 31 refineries from 2018 biofuel-blending requirements. Although federal law authorizes the waivers for small refineries facing an economic hardship, the number of those exemptions has surged during the Trump administration, and biofuel producers say they are being handed out too freely.

Iowa Backlash

The backlash has been most severe in Iowa, the nation's top producer of ethanol and the corn used in its manufacture. It is also critical for Trump's re-election; the state twice voted for Barack Obama before voting to send Trump to the White House in 2016.

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