Klobuchar on Obama's renewable fuel requirement: 'We couldn't have better Thanksgiving news'
WASHINGTON—Many American farmers are thankful today for an Obama administration decision to boost the amount of renewable fuels, such as made from corn and soybeans, in the country's gasoline and diesel supply.
The Wednesday, Nov. 23 announcement was a turnaround for the Environmental Protection Agency, which earlier planned to require less renewable fuel to be mixed with gas and diesel.
"During a tough time in farming and low commodity prices, we couldn't have better Thanksgiving news for our corn and soybean farmers and the thousands of people are who are in biofuels in Minnesotan," U.S. Sen. Amy Klobuchar, D-Minn., told Forum News Service.
Much of corn from Upper Midwest farms is used to make ethanol, which is blended with gasoline to raise octane and lower emissions. Similarly, soybean oil is blended with diesel fuel.
'...did the right thing.'
Klobuchar, a member of the Senate Agriculture Committee, said the EPA's announcement follows congressional intent, unlike preliminary proposals. "They did the right thing. ... Gradually, they have gotten this rule better."
President-elect Donald Trump often has said that he supports ethanol, particularly when campaigning in Iowa. However, he has not been specific about what he would do about renewable fuels.
Trump has expressed strong support for the American oil industry, which often is at odds with ethanol and biodiesel.
President Barack Obama's agriculture secretary told Bloomberg News that he thinks Trump will continue renewable fuel standards.
"There's going to be a lot of saber-rattling, but it supports too many jobs and too much rural infrastructure is set up for it," Vilsack said. "The Renewable Fuel Standard is solid."
Sen. Heidi Heitkamp, D-N.D., called the Wednesday announcement good news for her state.
"Ambitious blend levels are critical to supporting North Dakota's biofuels industry because it supports good-paying jobs, increases our energy security, and creates clean, reliable fuel," Heitkamp said.
The EPA is required by law to set fuel blending levels annually so biodiesel and ethanol producers can plan for the future, Heitkamp said, but the agency failed to do so for years.
The EPA set the target for total renewable fuel use at 19.28 billion gallons for 2017. That includes 15 billion gallons for conventional biofuel, which is mainly corn-based ethanol, and 4.28 billion gallons for the advanced biofuels mandate.
The final plan is up from the 18.8 billion gallons the agency proposed in May and marks a 6 percent increase from this year. While many anticipated an increase for the conventional fuel target, that increase alongside the boost for advanced biofuels was more than many expected.
The increase to 15 billion gallons for the conventional biofuels target marked a victory for the U.S. ethanol industry, after years of battling regulators to increase the mandates to levels laid out by Congress in 2007.
"The move will send a positive signal to investors, rippling throughout our economy and environment," said Bob Dinneen, president and chief executive officer of the Renewable Fuels Association.
In Sioux Falls, S.D., the CEO of one of the largest ethanol companies was happy.
"The grain ethanol industry is ready and able to meet its obligation under the Renewable Fuel Standard, and today's rule from the EPA reflects that reality," Jeff Broin of POET said. "I commend the EPA on holding firm to the letter of the law despite enormous pressure from oil interests."
After the announcement, shares in oil companies Tesoro, Valero Energy and HollyFrontier were down while shares of biofuels producers Green Plains and Pacific Ethanol rose.