Oil-Heavy Cabinet Picks Threaten Biofuel Mandates, Says Vilsack

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By Brian Dabbs

President-elect Donald Trump’s Cabinet picks raise the threat of a renewable fuel standard overhaul, Agriculture Secretary Tom Vilsack said in a departure from his recent assurances that the biofuel mandate program will survive a Trump presidency.

“I’ve had concerns about it because there has been an ongoing effort on the part of the oil industry to get rid of the renewable fuel standard, and it’s been comprehensive,” he told The Des Moines Register Dec. 19. “They’ve attacked it from the regulatory system, they’ve attacked it in the courts and they’ve attacked it in the court of public opinion.”

Roughly a month ago, Vilsack said there will be “saber-rattling” over an overhaul, but ultimately the program is “solid.”

Oil-Friendly Nominations

Since then, Trump tapped Oklahoma Attorney General Scott Pruitt, an RFS critic who once called the program “unworkable,” as his choice to lead the Environmental Protection Agency. Environmental groups and allies on Capitol Hill continue to blast Pruitt for alleged close connections with the oil and gas industry.

Trump also said he will nominate ExxonMobil CEO Rex Tillerson, an industry magnate who has advanced oil interest for decades, as secretary of state.

The oil industry generally views the biofuel mandates as burdensome, but farm state Republicans argue that the program is an economic lifeline for rural America.

The RFS program entered into law during the George W. Bush administration, and significant modifications would require congressional action. Nearly all transportation gasoline in the U.S. today contains 10 percent ethanol. The standards are intended to decrease hydrocarbon emissions, while also reducing dependence on foreign oil, and the law calls for annual mandate increases.

New Mandates

The EPA recently announced refiners need to mix 19.28 billion gallons of renewable fuel into the U.S. gasoline and diesel supply in 2017, including up to 15 billion gallons of traditional ethanol made from corn.

In comments to The Des Moines Register, Vilsack indicated the mandates face an existential threat.

“I think people who are supportive of the renewable fuel standard should be incredibly vigilant now,” he said. Both Republican Iowa Sens. Chuck Grassley and Joni Ernst have told Bloomberg BNA they intend to argue the benefits of the RFS directly with Pruitt. Trump has not yet named an agriculture secretary pick.

Trump previously told the Iowa Renewable Fuels Association ethanol mandates should increase, but his campaign later published a fact sheet urging a cut to the biofuel blending credit system. His campaign later dropped that language from the fact sheet.

Agriculture Choice Lags Behind

The agriculture secretary slot is one of the few remaining open slots among major cabinet posts. Monte Shaw, Iowa Renewable Fuels Association executive director, echoed Vilsack’s concern over oil industry influence. Shaw indicated RFS opponents are actively mentioned on the agriculture secretary short list.

“Secretary Vilsack is certainly correct that the RFS has been under a multipronged attack by Big Oil for over a decade,” Shaw told Bloomberg BNA. “It would send a strong signal to rural America if a pro-RFS person filled one of the other top EPA leadership posts to provide some internal balance. But the fact remains that the RFS policy will be set by President-elect Trump.” Shaw said he expects Trump to instruct his Cabinet to embrace the biofuel mandate.

Bob Dinneen, president and CEO of the nationwide Renewable Fuels Association, agreed Trump’s vocal support will likely carry over into his policy agenda.

“I can understand Secretary Vilsack’s viewpoint because he has been the single most effective and ardent advocate for farmers and value added agriculture, particularly ethanol, for the past eight years and he does not, as yet, see anyone picking up that mantle in the new administration,” Dinneen told Bloomberg BNA. “But we are confident that Mr. Trump himself will continue to support ethanol generally and the RFS specifically, and that those who serve under him will follow his lead.”

To contact the reporter on this story: Brian Dabbs in Washington at bdabbs@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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