South Dakota is leading the way in energy independence. I’ve always said the greatest improvements in our environment and conservation won’t come in the form of a “green new deal” or the latest trend on the internet — it will come from U.S. innovation. The biofuels industry in South Dakota, along with the efforts of famers, has proven innovation can move the needle in the right direction.
According to a recent USDA report, greenhouse gas emissions from corn-based ethanol are about 39 percent lower than gasoline. The report goes on to say new technology at ethanol biorefineries and the on-farm conservation practices happening today could reduce greenhouse gas emissions even further. The study projects that with improvements, a reduction of over 70 percent in lifecycle emissions is possible by 2022.
To me, that equates to a win for those who care about conservation and a win for those who want the private sector driving change. However, recent policy changes in Washington threaten this continued success. This past month, the Environmental Protection Agency (EPA) approved 31 Small Refinery Exemption (SRE) waivers that will exempt certain oil refineries from blending the legally required amounts of ethanol in their gasoline. This is the same ethanol that provides all the benefits I just listed above — lower emissions, lower prices at the pump, and cleaner air.
These waivers are traditionally awarded to small U.S. refineries in financial strife. However, following the pattern of most government programs, this waiver has been abused by oil refineries throughout the country. Congress implemented the Renewable Fuel Standard (RFS) for a reason and oil refineries should follow the rules like others in the industry.
This action directly contradicts a decision by the D.C. Circuit Court which directed the EPA to reallocate 500 million gallons of ethanol that were lost in the blending process because of waivers in previous years. Because these waivers were granted, blending will slow, and demand in the ethanol industry is slated to decline by over 3 billion gallons. This demand destruction continues to cause pain for producers and Main Streets across South Dakota.
Rules and transparency matter, which is why I introduced the Renewable Fuel Standard Integrity Act with Ag Committee Chairman Peterson. Our legislation will ensure transparency in the RFS waiver process and allow the EPA to reallocate any lost ethanol gallons awarded through Small Refinery Exemptions. Congress and the Courts agree — the EPA is clearly circumventing the intent of the waiver program of the Renewable Fuel Standard. It’s time we step in to close this loophole and preserve congressional intent.
Earlier this year, President Trump cut red tape to allow year-round E15 sales, but this past week’s actions by the EPA are a step in the wrong direction and potentially negate benefits additional E15 market access offers. I believe we must do everything we can to honor our commitments to home-grown renewable energy, giving farmers and Rural America a much-needed boost.