Farm bill gets snarled in ethanol politics with E15 in limbo

A farm bill vote in the House got snarled in a frenzied day of political maneuvering around a push to expand America's corn ethanol market.

Farm state Republicans huddled in House Speaker Mike Johnson's office on Wednesday after a plan to consider the farm bill alongside ethanol legislation appeared to fall apart amid opposition from independent refiners. 

After hours of meetings and exchanges, sometimes with voices raised, the chamber began debate on the farm bill close to 11 p.m., with a goal of taking a vote on Thursday.

Johnson, R-La., stressed on Wednesday that a bill to allow year-round sales of higher ethanol blends, known as E15, needs more work. The bill is now expected to be taken up in two weeks, after lawmakers return from recess next week. The plan drew skepticism from Rep. Angie Craig, top Democrat on the House Agriculture Committee. 

"The fact that tonight, my friends on the other side of the aisle somehow negotiated to have E15 taken off the table, it's just unbelievable," Craig said on the House floor. "We're going to be back here in two weeks ... and I'm telling you tonight, I do not believe that we will see a vote on E15 come to this House floor. That standing down on E15 was walking away from our family farmers." 

House Agriculture Chairman Glenn "GT" Thompson, R-Pa., shot back by implying that Craig is trying to score political points in her run for a Senate seat in Minnesota. Thompson also reiterated that E15 isn't in the farm bill because the ag committee doesn't have oversight over the issue, but rather the Energy and Commerce Committee.

Energy and Commerce Chairman Brett Guthrie, R-Ky., told Agri-Pulse that work is underway on E15 and lawmakers are working on issues involving both big and small refiners.

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Ethanol groups decried the E15 delay. They argue that higher ethanol blends under the Renewable Fuel Standard are urgently needed to temper skyrocketing gasoline prices as war in the Middle East roils the global oil market. U.S. gas prices on Wednesday climbed to a new record since the beginning of the U.S. war with Iran, reaching an average nationwide price of $4.23 a gallon, according to AAA.

"We were greatly disappointed that the vote to ensure year-round availability of lower-cost E15 as a fuel option for America's drivers has been delayed yet again," Renewable Fuels Association CEO Geoff Cooper said in a statement. "This legislation is critically important for consumers, for our country's struggling farmers, and for American energy independence."

E15, a top goal of ethanol producers and corn growers and sought by President Donald Trump, has been mired in oil industry infighting. The current bill includes a provision sought by the powerful American Petroleum Institute that would sharply limit the ability of small oil refiners to apply for biofuel-blending exemptions under the Renewable Fuel Standard. Many mid-size and small refiners are fighting the bill over the attempt to revamp the the process for small refinery exemptions, or SREs.

For years, API, which represents large refiners, fiercely fought giving ethanol a greater share of America's gasoline pumps. Now they support E15, but the cost has been opposition from smaller refiners, who in January succeeded in lobbying lawmakers to stop a House bill from advancing at the last minute.

There's also a new E15 challenge from the Congressional Budget Office. The nonpartisan agency estimates the E15 bill would add billions of dollars to the U.S. deficit over the next decade. The projection stems from the SRE part of the legislation as opposed to the actual expansion of ethanol blends. 

"Any SRE reform will make this bill incredibly challenging," Bloomberg Intelligence biofuel analyst Brett Gibbs said. 

Rep. Austin Scott, R-Ga., told Agri-Pulse there are concerns that bundling E15 with the farm bill might have been a mistake.

"I’m not saying that it is. I’m saying we’re having the discussions," he said. "There’s some people that are for the farm bill that are adamantly opposed to E15, and so we’re just trying to work through those issues now.”

Another headwind for the farm bill is bipartisan opposition to a provision that critics say amounts to immunity for big farm chemical companies accused of not properly warning about health risks on their product labels. The issue is bringing together Make America Healthy Again advocates from both sides of the aisle. It's also uniting some Republicans in going against the Trump administration's support for preempting state pesticide regulations with federal law. 

"I have now been accosted by two Republican members of Congress for trying to remove pesticide liability protections," Rep. Anna Paulina Luna, R-Fla., said on social media. "Both of which claim to be 'God-fearing' Christians, but are shilling for cancer causing pesticide companies." In response, Rep. Chip Roy, R-Texas, said: "Well - we’re going to support your amendment. People can yell all they want."