The EPA is targeting ethanol subsidies, rankling Iowa Sen. Chuck Grassley
As chairman of the Senate Judiciary Committee, one of the congressional committees investigating Russian interference in last year's election, Charles Grassley is in a better position than most other Republicans in Congress to tighten the screws on the Trump administration.
So President Donald Trump raised eyebrows when he telephoned the senior senator from Iowa at the end of August. The topic of their conservation was not Russia, Grassley's office insisted - it was ethanol.
That the president would take the time to call a senator about a provincial issue amid a high-stakes investigation of international election meddling strained the credulity of some observers.
But the Iowa congressional delegation and the Environmental Protection Agency, led by Scott Pruitt, are indeed on a collision course over an issue central to the economic viability of biofuels - and to the farmers in Iowa growing the corn and other agricultural products that go into them. Over the past few months, the EPA has proposed weakened requirements for how much renewable fuels needs to be blended into the nation's gasoline and diesel.
On Tuesday, Grassley told an audience at an Iowa biodiesel producer that the recent EPA proposals "would drastically undermine biodiesel production, and most importantly, it's contrary to statements made by then-candidate Trump and President Trump."
"Whether it's biodiesel or anything else," he said, "I believe it's a platform not just to run on, but to stand on."
Since 2005, with the wars in Iraq and Afghanistan raging and desire for energy independence from the Middle East, the federal government has mandated that transportation fuel contain a certain percentage of renewable fuel derived from corn, soybeans and other foodstuffs.
So every year, the EPA sets the Renewable Fuel Standard, which under President Barack Obama required that an increasing amount of biofuels, including ethanol, be mixed into the gasoline and diesel supply.
And in every presidential election, promises to support that program have become a staple of campaign rallies and diner visits ahead of the first-in-the-nation caucuses in Iowa.
In many ways, Trump was an unprecedented candidate who made unprecedented promises. But on this issue he was utterly conventional - conventionally supportive, that is, of biofuels.
Ahead of Iowa's GOP caucus in February 2016, Trump repeated slammed Sen. Ted Cruz, R-Texas, over his ethanol stance. Like some other Republicans from oil and gas strongholds, the senator from Texas wanted to abolish the RFS.
"He's right now for the oil," Trump told a crowd at a rally at the end of 2015. "But I understand because Big Oil pays him a lot of money. He's got to be oil, right? The oil companies give him a lot of money."
In part because of Trump's remarks, Grassley began embracing Trump long before the rest of the GOP establishment did, appearing at a rally with him in January 2016.
"We have an opportunity once again to make America great again," Grassley told a crowd in Iowa, echoing Trump's campaign slogan.
That promise to support ethanol helped Trump place second in the Iowa caucus and go on to win that and other Midwestern states in the general election, said Grant Kimberley, a corn and soybean farmer in Iowa and executive director of the Iowa Biodiesel Board.
"Rural American elected President Trump," Kimberley said, "and that was one of the key factors in the Midwest."
This year, during a campaign-style rally in Iowa, Trump reiterated that commitment to ethanol. "By the way, we're saving your ethanol industries in the state of Iowa just like I promised I would do in my campaign," Trump said. "Believe me, they are under siege, folks."
Right now, though, the biofuel industry feels as if it's under siege by the Trump administration.
At the beginning of the year, when Grassley and other Midwestern senators met separately with Pruitt and Rick Perry as they prepared to vote for them to run the EPA and the Energy Department, the pair of oil-state nominees promised - unprompted - to support ethanol.
"We had a very clear indication from them," Grassley said, "that they knew what the president has said."
In July, the EPA proposed reducing the amount of biofuel required to be blended into gasoline and diesel to 19.24 billion gallons for next year, but kept the total for conventional biofuels at current levels.
Biofuel industry groups were set on edge. So in August, Trump phoned Grassley to talk about ethanol. The president pressed the senator to tweet that Trump supported ethanol, and Grassley obliged.
"He ran on a platform of supporting ethanol and he was still for ethanol, and he wanted me to tell the people," Grassley told me in an interview earlier this week.
But then in September, the EPA truly infuriated the biofuel industry by floating the idea of bringing the proposed total even lower, and of revisiting other renewable fuel requirements for 2018 and 2019 finalized under the Obama administration.
The proposal is in line with what the oil and gas industry want (those energy producers think the RFS adds to the cost of refining petroleum and wants to see Congress rewrite the underlying 2005 law). "Until Congress acts to address the structural flaws with the RFS," Frank Macchiarola of the American Petroleum Institute wrote in a letter to the EPA earlier this year, "lowering the volume requirements in 2018 is the most effective short-term way for EPA to address the problems created by the RFS."
Yet in none of Grassley's conversations - with Pruitt, with Perry or with Trump - did the administration make specific assurances about RFS levels going forward, the senator said. "It was just pretty generic," Grassley said in the interview of meeting with Pruitt and Perry. And Grassley spoke with Trump for only about two minutes during that August phone call, he said. Grassley said he spoke with Trump again about ethanol in late September.
Earlier this month, Grassley and 37 other senators from both parties wrote a letter to Pruitt urging him to grow blending targets. Midwestern governors are now preparing their own letter, too. Iowa's two GOP senators, Grassley and Joni Ernst, along with other members, are scheduled to meet with Pruitt on Tuesday to discuss the RFS, said the senator, adding he will urge Pruitt to maintain the Obama numbers.
Grassley made a point of aiming his criticism at Pruitt, not Trump. Biofuel producers "need certainty," Grassley said, "and Pruitt's actions would bring uncertainty to an industry that needs more capital investment, and that's bad for the industry."
That perception of a divide between Trump and Pruitt is shared by some in the agriculture sector. "I think he's doing his own thing," Kimberley said of Pruitt. "Our goal is to remind the president of his promises."
The senior senator from Iowa, which got more than a third of its electricity from wind in 2016, also recently dinged Pruitt for seemingly misunderstanding tax credits for wind energy.
While traveling in Kentucky when announcing the repeal of the Clean Power Plan, Pruitt called for the elimination of wind and solar tax credits. "I would do away with these incentives that we give to wind and solar," Pruitt told an audience on Monday, even though both are scheduled to phase out over the next five years.
Grassley, who like the president likes to write his own tweets, responded to Pruitt on Twitter by noting that the wind tax credit is already on schedule to wind down:
"I think what I would have to do is assume that Pruitt didn't know anything about the phasing out of the wind energy tax credit," Grassley told me, "or he wouldn't have made that statement."
In contrast, Grassley said he was encouraged that Trump has backed away from bashing wind energy for killing birds, as Trump sometimes did during the campaign. "There's more birds killed by running into Trump Tower," Grassley said, "than there is by wind energy."
Author Information: Dino Grandoni is an energy and environmental policy reporter and the author of PowerPost's daily tipsheet on the beat, The Energy 202.