Groups slam EPA claim that SREs don’t damage ethanol demand

By Erin Voegele | August 21, 2019

The Renewable Fuels Association and Growth Energy have spoken out to slam the U.S. EPA’s Aug. 20 claim that there is “zero evidence” of demand destruction for ethanol associated with the agency’s treatment of small refinery exemptions (SREs).

Reuters published an article Aug. 20 quoting an EPA spokesman as stating “there is zero evidence that EPA’s congressionally mandated small refinery exemption program...has had any negative impact on domestic corn ethanol producers.”

The RFA and Growth Energy were quick to release statements disputing the agency’s claims.

“To suggest that there is ‘zero evidence’ of ethanol and corn demand destruction from small refinery waivers is as insulting as it is absurd,” said Geoff Cooper, president and CEO of the RFA. “On the same day that EPA made this asinine assertion, two more ethanol plants announced they are idling production. At least 15 ethanol plants have now shut down or idled since EPA began its refiner bailout bonanza last year, and more than 2,500 jobs have already been affected. Ethanol production and demand continue to slide, prices continue to sink, and margins continue to bleed red. Meanwhile, the waivers are eroding corn demand, with USDA cutting its estimate of corn use for ethanol by 225 million bushels—equivalent to erasing demand for the entire Michigan corn crop. Farm bankruptcies and debt are on the rise, and farm income is plunging. Yet, EPA pretends nothing is wrong. Rome is burning, while EPA plays Nero’s fiddle.”

“The latest reports say President Trump ‘felt misled’ about the EPA’s most recent batch of small refinery exemptions,” said Emily Skor, CEO of Growth Energy. “That’s hardly a surprise. The EPA spent months trying to paper over the devastating impact these refinery handouts have had on farm communities and rural workers in America’s biofuel sector. They can’t hide the simple fact that dozens of biofuel plants have cut production, and ethanol consumption fell for the first time in 20 years in the wake of these exemptions. Closures in Iowa, Illinois, Kansas, Minnesota, Florida, Virginia, Texas, Pennsylvania, Missouri and Nebraska are only the beginning.

Just today, the world’s largest ethanol producer closed a major plant in Indiana and cut production across seven states,” Skor continued. “Hundreds of millions of gallons of production are offline, and hundreds of millions of bushels of grain are falling in value, just as farmers face the worst economic conditions in a generation.

“The Renewable Fuel Standard creates an incentive that opens the market to biofuel blends, including the E15 that President Trump personally embraced,” Skor added. “These exemptions destroy that incentive, pure and simple. You cannot carve billions of gallons from America’s biofuel targets and still keep this administration’s promises to farm families. EPA needs to account for these lost gallons immediately and start repairing the damage before more rural communities lose hope for a comeback.”