Trump’s EPA Pick Worries Renewable Fuel Proponents

During his presidential campaign, Donald Trump promised to pick a leader for the Environmental Protection Agency who would be friendly to agricultural interests, once even saying he would appoint a farmer to head the agency.

But with his selection of Oklahoma Attorney General Scott Pruitt this week, Trump has made some of his allies in the farming and biofuel industries—who helped get him elected—a little nervous.

During his tenure as attorney general of an oil-rich state, Pruitt has railed against the Renewable Fuel Standard (RFS), the EPA-run program that requires oil refiners to blend an increasing amount of plant-based fuels into gasoline. It is the nation’s most successful—and divisive—effort to cut crude oil consumption in the nation’s cars.

The controversial requirement has transformed American agriculture, helping boost demand for corn and soybeans, the country’s two most widely grown crops. It has also become a cornerstone of the rural economy. The oil and gas industry has targeted the standard since it was first enacted in 2005, then expanded in 2007. It has led biofuels to supplant billions of gallons of petroleum in gasoline and diesel, a trend that has cut overall oil demand.

In campaigns to roll back or repeal renewable fuel requirements, the oil industry has said higher ethanol mandates could harm consumers, damage their automobiles and trigger fuel rationing and supply shortages. Pruitt, an oil industry ally, has called the program “unworkable.”

Suggestions that Trump might appoint an administrator hostile to the program surfaced in recent weeks. Carl Icahn, a top donor to the Trump campaign, was advising the president-elect as he picked his EPA leader. Icahn is a majority owner of Texas-based CVR Energy Inc., which runs two refineries that are projected to spend $200 million meeting RFS requirements.

Icahn sent a letter to current EPA administrator Gina McCarthy in August saying the program “rigged” the marketplace and threatened to bankrupt independent refineries like his, Reuters reported. “The domino effect of this will be that ‘big’ oil will sop up the bankrupt refineries, causing an oligopoly resulting in skyrocketing gasoline prices,” Icahn wrote.

The goal of the RFS was to reduce dependence on foreign oil and combat climate change. But in an unusual alliance with oil companies, environmental groups have cautioned the EPA on expanding the volume targets under the RFS. They are concerned that biofuels, particularly corn ethanol, compete with food production and drive agricultural expansion and deforestation, which can erode the climate benefit. Most groups have pushed for cellulosic ethanol—derived from the stringy fiber of plants—but development of it has lagged, making it difficult for producers to meet volume targets.

The American Farm Bureau Federation, which has staunchly backed the standard, said it was hopeful that Pruitt would ease off his position, noting that Trump has voiced support for the program.

At an event in Altoona, Iowa—the heart of ethanol country—Trump called the standard “an important tool in the mission to achieve energy independence for the U.S.,” adding, “I will do everything in my power as president to achieve that goal.”

“Mr. Pruitt, on behalf of his state, has demonstrated his willingness and ability to bring important national-scope issues into the judicial venue. This is why we are excited and optimistic in our anticipating what he will bring to the EPA,” said Dale Moore, the bureau’s director of public policy, in an email.  “Based on what we’ve heard from our Oklahoma leaders and members, Mr. Pruitt is an individual that strives to find workable solutions.”

Bob Dinneen, head of the Renewable Fuels Association, said, “It’s the Donald Trump administration, not the Scott Pruitt administration. At the end of the day, he will have to abide by the boss. Mr. Trump has repeatedly expressed his support for ethanol, and the RFS specifically.”

But other policy groups and lawmakers are more concerned.

Sen. Debbie Stabenow, (D-Mich.), ranking member of the Senate Agriculture Committee, called Pruitt a “leading proponent of dismantling” the RFS. “We were promised a farmer-friendly EPA by President-elect Trump, yet his pick for the agency wants to upend one of the most successful economic drivers in rural America,” Stabenow said in a statement.

Trump’s pledges to keep the standard, or even raise blending targets, might be in jeopardy given the Pruitt pick, an aide of Stabenow said. The EPA administrator has the authority to invoke a waiver lowering the blending requirements, something Pruitt has supported.

“That’s the chief concern,” the aide said. “Here’s someone who has applauded that waiver being invoked in the past.”

Agriculture Secretary Tom Vilsack, who has championed the RFS, has made reassuring comments about the program under a Trump administration, telling Bloomberg Markets last month, “There’s going to be a lot of saber-rattling, but it supports too many jobs and too much rural infrastructure is set up for it. The Renewable Fuel Standard is solid.”

Correction: A previous version of this story misspelled Bob Dinneen’s surname.