Trump Told Iowa He'd Save Ethanol. His EPA Chief Has Other Ideas

(Bloomberg) -- As he sought votes during last year's Iowa caucuses, candidate Donald Trump courted farmers with praise for ethanol and promises that he would boost the home-grown fuel.

Now those farmers and other biofuel supporters say the people President Trump has put in charge of the issue in Washington are instead boosting their fossil-fuel rivals.

"This seems like a bait-and-switch," Iowa's senior Republican senator, Chuck Grassley, said on the Senate floor this week. "Big Oil and oil refineries are prevailing, despite assurances to the contrary."

The issue is politically precarious for Trump, as it pits the oil industry against Midwest voters who helped elect him. Trump repeatedly vowed to "protect" ethanol. But he loaded his cabinet with allies of the oil industry, which views the Renewable Fuel Standard that mandates biofuel use as costly and burdensome.

Ethanol producers are most vexed by Scott Pruitt, the head of the Environmental Protection Agency. His agency has pursued a series of changes that would help the oil industry at the expense of ethanol.

"The White House needs to rein in the EPA before the agency tramples the president's rural base – and his promises to voters," said Brooke Coleman, executive director of the Advanced Biofuels Business Council. "I would be surprised if those in the White House realize the depth of his attacks on the Renewable Fuel Standard."

Pruitt hails from oil-rich Oklahoma. Backing refiners and oil producers could aid any future political campaign in his home state, including a possible bid for the Senate seat that would open up if Republican Jim Inhofe retires in 2020. Pruitt has not announced plans to seek that seat or any other political office. While serving as Oklahoma's attorney general, Pruitt dubbed the quotas "unworkable" and a "flawed program."

Now at the EPA, Pruitt has gone "rogue," said Michael McAdams, president of the Advanced Biofuels Association.

"His job is to implement the vision of the president who says he supports biofuels," he said. Pruitt's actions don't "support biofuels in any shape or form."

Representatives of Pruitt declined to respond to questions about his ties to the oil industry. "EPA is currently seeking input from all stakeholders involved. Nothing has been finalized at this time," the agency said in a statement.

Despite the president's high-profile pledges of support, the intricate details of biofuel policy are being decided by administration officials with no allegiance to the sector, said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

For instance, Trump's Energy Secretary is Rick Perry, who as Texas governor asked the EPA to waive half of the conventional renewable fuel quota in 2008. And Trump's Agriculture Department is led by Sonny Perdue, who previously was governor of Georgia, the nation's top poultry producer. Livestock producers have linked arms with the oil industry to fight the biofuel mandate, arguing it drives up feed costs.

Trump also tapped billionaire refinery owner Carl Icahn, a critic of the biofuel mandate, as special adviser on regulations. Icahn has since left that role.

In the latest policy move, the EPA this week issued a notice opening the door to potential reductions in annual quotas for biodiesel and ethanol. The action followed heavy lobbying by oil industry leaders seeking lower biofuel targets.


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