EPA Waives Two ND Refineries From Renewable Fuel Standards. Concerns Grow for Ethanol.

Yesterday, I reported on the absence of Governor Doug Burgum in standing up for a “key pillar of the farm economy” by not taking a stand on the renewable fuel standard (RFS). Six other farm-state Governors told President Trump to hold his ground, keep his campaign promise, and not weaken or waive RFS. Three hours after we published, Reuters reported the EPA was, in fact, allowing waivers to large oil refineries. Two of them are located in North Dakota.

Andeavor is one of the largest oil refining companies in the nation. Last year they reported $1.5 billion in net profits. Yet, the EPA under embattled Administrator Scott Pruitt granted them a “hardship waiver.” Basically, the EPA is saying it was too expensive or too difficult to produce ethanol and other biofuels for Andeavor. Really? Were they convinced it was too difficult to produce ethanol in the farm-state of North Dakota? Because of EPA policy, the agency refuses to release information about these waivers.

In response to this development, Brian Jennings, CEO of American Coalition for Ethanol released the following statement:

“The law allows a small refiner (producing less than 75,000 barrels per day) to seek an exemption from the annual blending obligation if it can prove the RFS is causing ‘disproportionate economic hardship’ on its operations. On what planet does Andeavor’s 2017 net profit of $1.5 billion constitute ‘disproportionate economic hardship’ for a “small refiner”? Refiners are reporting billion-dollar profits today while farmers are facing their fifth year of prices at or below the cost of production. Net farm income is dropping to levels not seen since the last economic disaster in rural America in the early 2000s which prompted Congress to enact the RFS in the first place. EPA’s recent waivers reduce demand for ethanol making economic conditions worse in rural America and breaking promises President Trump has made to protect the RFS. – Brian Jennings, CEO of American Coalition for Ethanol

Mandan and Dickinson are home to the two Andeavor North Dakota refineries. In September, President Trump delivered a tax speech at the Mandan refinery. The crowd was fairly enthusiastic then. I’m curious if any corn growers were in attendance and if the enthusiasm remains?

I closed yesterday’s post by wondering aloud whether or not Burgum remained silent in defending his farm constituents because the oil and gas lobby had gotten to him. Did the industry lobbyists know two of North Dakota’s oil refineries were about to be waived from RFS? Did they tell Burgum? Did Burgum pick oil interests over farm interests? Agriculture constituents should demand answers.

The farm economy has people concerned. Domestic administrative changes like the RFS coupled with the international trade war beginning with China, I understand why they’re worried. Yet, they should know they can help themselves, their bottom line, and their industry by electing people who actually show up for the fight.