This week Siouxland Energy Cooperative, in Sioux Center, Iowa, announced it will idle ethanol production. The company is pointing the finger at small refinery exemptions (SREs) to the Renewable Fuel Standard (RFS) recently provided to oil refineries by the Trump administration.
“The administration’s actions unfairly benefit the oil industry at the expense of our local farmers and if not addressed soon, will impact the livelihoods of many,” said Kevin Neiuwenhuis, president of the board for the plant in a recent press release.
Siouxland has 385 farmer members and can produce up to 90 million gallons of ethanol annually. At full capacity the company can process 58,000 bu. of corn a day, resulting in 168,000 gallons of ethanol.
“We look forward to the administration properly addressing these issues so that Siouxland Energy can resume ethanol production and its purchase of corn from local farmers and generally contribute to the local and global economy,” Nieuwenhuis said.
SREs allow oil refineries to forgo the blending requirements required by the Renewable Fuel Act. In early August the Trump administration granted 31 additional SRE waivers. Six additional waiver requests were either withdrawn or denied.
“The vast majority of these exemptions are not justified under the law,” said Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw in a press release. “Since this news began to leak this afternoon, RFS credit prices have freefallen to nearly zero, destroying much of the incentive to blend an incremental gallon of ethanol.”
Over the past three years SRE exemptions have squelched about four billion gallons of ethanol production, according to recent estimates. Farmers and farm organizations are asking to see those gallons reallocated.
“I don’t think anyone in the industry assumes we’ll get the 4.1 billion back, but it would be nice,” says Jon Doggett, CEO of National Corn Growers Association. “The administration said they have no plans to reallocate.”
Doggett says he’s seen a change of attitude in some of their farmer members toward President Trump as a result of SREs and trade war issues.
“One of our farmer leaders said last week ‘I’m happy to be a patriot, but I don’t want to be a martyr,” Doggett says. “When the SRE announcement was made it was noticeable very quickly we had gone from comments [that we were] too critical of him to less than a week later [farmers] asked why we weren’t being harder on him [President Trump].”