The Trump White House seeks to appease farmers' turmoil over biofuels policy: sources

NEW YORK / WASHINGTON (Reuters) – The administration of President Donald Trump is trying to curb the rise of anger in Farm Belt states after a decision this month to allow many oil refiners to mix less from ethanol to their gasoline, Reuters reported on Tuesday.

Trump held a two-hour meeting Monday with members of his cabinet after hearing farmers' criticism following the decision to grant derogations to national biofuel laws at 31 refineries, two sources told of the talks. . The campaign team for Trump's re-election also took note of the fact that Democratic presidential candidates are seizing the turmoil, the sources said.

Iowa, the country's largest corn and ethanol producer, is a winning state won by Democrat Barack Obama following successive elections, before Trump wins in 2016 by pledging support for ethanol.

It was unclear what measures Trump could take to appease angry farmers. The reversal of the 2018 waivers was a feasible option, but was quickly abandoned, the sources said, but the administration was looking for other ways to boost demand for ethanol.

Refiners are required to mix biofuels with the country's gasoline pool or to acquire credits to finance refiners who can. The news of the meeting boosted compliance credits by 50% on Tuesday before match gains.

Corn producers and ethanol producers have lobbied to drastically reduce the number of exemptions to these rules, which have reached a record under the Trump administration.

Farmers most affected by the trade war between Trump and China have stated that their support for the lifting of the waiver has destroyed the demand for ethanol.

"For the first time in my life, I will be voting for a Democrat, for Joe Biden, because Trump will have lied to us about support for ethanol," said Mark Marquis, CEO of Ethanol's producer of ethanol. Illinois, Marquis Energy, in an interview. "Frankly, I feel cheated and lied."

Refiners, especially small businesses, have argued that biofuel laws are expensive and burdensome. The extension of Trump's exemption program has saved the oil industry billions of dollars in compliance costs. The US Environmental Protection Agency said in a statement Tuesday that there is "no evidence" that the refinery's derogations have hurt demand for ethanol, which is being challenged by biofuel producers .

POET, the largest producer of ethanol in the country, announced Tuesday a reduction in production in its factories and attributed this derogation to derogations for difficult conditions.

"POET has made strategic decisions to support President Trump's goal of boosting the agricultural economy," said POET President and Chief Operating Officer Jeff Lautt. "However, these goals are contradicted by the rescue of the oil companies."

"CRIVER THE FARMER"

Monday's meeting brought together representatives of the US Departments of Energy and Agriculture, as well as the EPA, the sources said. The White House declined to comment.

One option advocated by the biofuels industry is to increase the annual amount of ethanol to be blended into the country's fuel tank or to restore the canceled volume in the annual consumption mandate that the EPA had proposed to set at 15 billion gallons by 2020. No proposals have been accepted.

Prior to Trump's election, only a few smaller refineries were exempted from this requirement. The Trump administration has significantly extended these exemptions, including granting relief to facilities managed by major oil companies Exxon Mobil Corp. (XOM.N) and Chevron Corp (CVX.NTrump has personally asked the EPA to grant the most recent waivers, sources told Reuters.

"Not only does the government not keep its word, but it also hurts the farmer when maize prices are low," said Iowa Senator Chuck Grassley, Republican, at a news conference. weekly conference call devoted to agricultural issues.

The EPA granted the exemptions just as Democratic candidates hoping to challenge Trump in 2020 went to the Iowa State Fair, where they sought to position themselves as ethanol fighters.

Kelly Nieuwenhuis, a third-generation corn and soybean farmer from O'Brien County, Iowa, said she voted for Trump in 2016, but her support for the president is in decline.

"I've been talking to a group of farmers these past few days and they're fed up. They are not going to vote for Elizabeth Warren, but they said they would not vote for Trump, so they will move on, "Nieuwenhuis said in an interview Monday.

Trump has implemented a long-desired change by the biofuels community, which involves lifting the summer ban on ethanol-based gasoline blends, but farmers and producers of the same kind of fuel can not afford it. ethanol claim that the refining exemptions have nullified all the benefits of this decision.