Daily on Energy: One month into Trump’s ethanol plan, the battle has only just begun

Trump took criticism from farmers last month over the Environmental Protection Agency’s excessive use of the refinery exemptions, which they argue are eroding the market for ethanol, despite his easing restrictions on the sale of 15% ethanol fuels beginning June 1.

Now the administration is thinking about curtailing the EPA exemption program, which many Republicans have blasted over the last week.

Nevertheless, Iowa Republican Sen. Chuck Grassley was the first to draw battle lines when it came to his colleagues criticizing the administration’s actions to place a check on the oil refinery exemption program.

Hardship waivers given to the oil industry “should be the exception, not the rule, and they have been abused for far too long,” Grassley said earlier this week. “I would expect that the Environmental Protection Agency, with input from USDA, and any other legitimate source, will honor President Trump’s commitment to follow the law.”

But the pressure is mounting: Grassley was responding to a recent letter sent by Louisiana senator John Kennedy and a dozen other Republicans from oil-producing states. The letter threatened to block nominees to the Department of Agriculture if Secretary Sonny Perdue does not stop interfering with the EPA exemption program meant to protect small refiners from economic harm caused by the Renewable Fuel Standard.

The letter followed another, also sent by Republican senators, asking EPA Administrator Andrew Wheeler not to harm the exemption program. That letter was sent in response to Democrats prodding Wheeler to stop issuing the exemptions.

The RFS requires refiners to blend billions of gallons of corn ethanol into the nation’s fuel supply each year. The exemption program provides a safety valve to protect companies that find it economically untenable to meet the standard.

Perdue has been pressing Wheeler to roll back the exemption program, saying it has been abused over the last two years with waivers to over two dozen small refineries, many of which are owned by large multinational oil companies.

The refinery industry argues that Perdue has no jurisdiction in the matter under the law. The Clean Air Act requires that the Department of Energy consult with the EPA on issuing refinery waivers when it comes to ethanol, an industry lobbyist working the issue tells John.

The EPA has the “obligation” to allow for small refinery exemptions under the law, said the lobbyist.

The exemptions only apply to small refineries that may be struggling to comply with the ethanol standard, and it doesn’t matter if they are a subsidiary of or owned by a larger company, the source said.

Although “it makes for a good sound bite,” the company that owns the refinery “doesn’t matter,” the industry lobbyist added.

The ethanol industry says the exemptions are destroying demand for ethanol and other renewable fuels. But the refineries point out that the amount of ethanol being blended into the fuel supply has not gone down while ethanol exports have grown enormously over the last year.

New rule out soon with no surprises: The proposed blending targets for the 2020 Renewable Fuel Standard could be released by the EPA as soon as this week.

Some biofuel lobbyists had suggested the rule could address the refinery exemptions, but as of this week no one is saying that. In fact, they expect a pretty lackluster proposal that focuses on keeping the blending volumes of ethanol and other renewable fuels stable, resembling the requirements issued for the current year.

The refinery industry lobbyist has been hearing the same and also doesn’t expect any surprises in the forthcoming proposed rule.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers John Siciliano (@JohnDSiciliano) and Josh Siegel (@SiegelScribe). Email [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

Daily on Energy wishes everyone a happy Independence Day, reminding readers that we will not be publishing July 4th and 5th. We will be back in your inboxes on Monday, July 8.

EPA SUED FOR NOT PROTECTING RIVERS AND STREAMS FROM BLOOD, OIL, AND FECES: A number of prominent conservation groups are preparing to sue the EPA for failing to issue new rules to protect rivers and waterways from the runoff produced by slaughterhouses.

“Some of the world’s largest meat companies are dumping huge volumes of pollution into America’s rivers, contributing to toxic algae, dead zones and fecal bacteria that can make swimmers sick,” Environment America’s clean water director John Rumpler said Tuesday in issuing the coalition’s formal intent to sue the EPA.

The notice warns the EPA that the groups will soon file a lawsuit over its lack of action in regulating thousands of chicken, hog, and beef slaughterhouses that annually discharge massive amounts of grease, fat, blood, feces, and other waste into waterways.

The notice of intent to sue says the EPA is required under the Clean Water Act to set standards to protect waterways from the tons of wastewater these facilities create in processing animals for human consumption.

“Slaughterhouses often release toxic pollutants that impair drinking water supplies around the country,” said Earthjustice’s managing attorney Peter Lehner.

A joint press release explains that the waste the slaughterhouses produce deprive waterways of oxygen, causing algae blooms that suffocate aquatic life and turn waterways into “bacteria-laden public health hazards.”

GROUP’S LAWSUITS AGAINST TRUMP DOUBLE IN A YEAR: The Center for Biological Diversity’s lawsuits against the Trump administration have more than doubled from a year ago, rising from around 65 lawsuits in April 2018 to a whopping 136 as of last month.

The conservation group was the first to sue the Trump administration over its proposed border wall and continues to lead the pushback against the president’s environmental agenda.

“From the moment he took office, our lawyers have been working feverishly to oppose every attempt he’s made to worsen climate change, kill wildlife, endanger public health and destroy public lands,” the group’s online tracker reads.

DEMOCRATS WANT ANSWERS ABOUT TRUMP USING NATIONAL PARK FEES FOR JULY 4TH CELEBRATION: Democrats are seeking an explanation from the administration for its decision to divert $2.5 million in National Park Service funds from entrance and recreation fees to help pay for Trump’s Fourth of July celebration.

Democrats criticized the move, reported by the Washington Post, because it seemingly contradicts a push by the Trump administration and lawmakers of both parties to address a serious maintenance backlog in national parks.

“The National Park Service has a maintenance backlog of nearly $12 billion. These fees are supposed to be used to help reduce this backlog,” Virginia Sen. Mark Warner said in a Twitter post. New Mexico Sen. Tom Udall called the decision “beyond the pale.”

“The American people pay these entrance fees to make improvements at our national parks — not to boost President Trump’s campaign,” Udall said on Twitter.

The office of West Virginia Sen. Joe Manchin, the top Democrat on the Energy and Natural Resources Committee, has reached out to the Interior Department to ask about the “criteria” used to make the decision, spokeswoman Sam Runyon told Josh.

Vice President Mike Pence and Interior Secretary David Bernhardt traveled last month to Yellowstone National Park, which has $500 million in maintenance needs, to press Congress to pass legislation paying for repairs and maintenance in national parks with money the government collects from the development of energy on public lands.

Bipartisan lawmakers in the House and Senate have introduced legislation to spend energy production revenues on park repairs. The House Natural Resources Committee last week easily passed a version of the bill introduced by top Republican Rob Bishop of Utah and Derek Kilmer of Washington.

DEMOCRATS TOUT THEIR COAL TRANSITION PLANS AS WYOMING MINES CLOSE: Democrats running for president say the closing of two coal mines in Wyoming this week shows the importance of helping fossil-fuel-dependent communities as they transition to cleaner sources of energy.

“Again and again, coal giants go bankrupt and leave hardworking people high and dry,” Washington Gov. Jay Inslee said in a Twitter post Tuesday. “We cannot abandon these workers — we need a just transition that leaves no one behind.”

Inslee was responding to the news that the Eagle Butte and Belle Ayr coal mines in Wyoming closed Monday after the operator of the mines, Blackjewel LLC, filed for bankruptcy.

The sudden closure resulted in 700 coal miners losing their jobs. The closed coal mines were the fourth- and sixth-largest in the United States; Wyoming is the country’s top coal-producing state. But Blackjewel is the fifth coal producer in Wyoming to file for bankruptcy in recent years, according to the Billings Gazette.

Democrats propose plans to help coal workers: Inslee is among a few presidential candidates who have emphasized helping coal-dependent communities as part of their plans to rapidly transition off fossil fuels.

He has proposed creating a “G.I. Bill” of benefits for affected coal workers and communities that would include guarantees for health insurance and pension benefits, as well as funds for career training. Similarly, Joe Biden as part of his climate change plan vowed to establish a “Task Force on Coal and Power Plant Communities” to help fossil fuel workers find cleaner energy jobs.

Beto O’Rourke has also proposed providing “development grants” to support the pensions and health care benefits “owed to those in the coal industry.”

HOUSE LAWMAKERS INTRODUCE BIPARTISAN BILL TO BOOST CARBON CAPTURE: A bipartisan group of House lawmakers introduced a bill Tuesday authorizing hundreds of millions of dollars to expand research and development of carbon capture technologies for coal and natural gas plants.

Carbon capture has emerged as a response to climate change that has bipartisan support, seen as vital to limiting emissions to a level necessary to meet international goals.

Sponsors of the new bill include Reps. Marc Veasey, D-Texas, David Schweikert, R-Ariz., Conor Lamb, D-Pa., Lizzie Fletcher, D-Texas, and Eddie Bernice Johnson, D-Texas.

The Fossil Energy Research and Development Act is similar to the EFFECT Act introduced in the Senate in April by Manchin and Alaska Republican Lisa Murkowski, the chairwoman of the Energy and Natural Resources Committee.

The House legislation would boost funding for carbon capture research and development and direct new research efforts within the government focused on developing new carbon capture technologies.

The Rundown

Politico Trump team weighs giving China a get-out-of-jail free card on Iran oil sanctions

Time The Trump administration protested when Kenya halted a coal-fired power plant

New York Times Climate change denialists dubbed auto makers the ‘opposition’ in fight over Trump’s emissions rollback

The Oregonian Oregon Gov. Kate Brown says she’s ‘not backing down’ on climate change agenda after failed cap-and-trade bill

Washington Post Moody’s Analytics says climate change could cost $69 trillion by 2100

Calendar

THURSDAY | July 4

Independence Day.

MONDAY | July 8

All day, Denver. The Energy Department’s Advanced Research Projects Agency – Energy, or ARPA-E, holds its annual Innovation Summit, July 8-10.

9 a.m., 1030 15th St. NW. The Atlantic Council hosts the International Energy Agency’s 13th meeting of the Gas and Oil Technology Collaboration Program. July 8-9. The meeting will focus on efforts by government, academia, and industry to explore the role of low-carbon oil and gas in meeting the challenges of growing energy demand.