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Senators Press USDA for Biofuel Infrastructure Grant Flexibility
USAgNet - 07/16/2020

U.S. Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) are pressing U.S. Department of Agriculture (USDA) Secretary Sonny Perdue to allow businesses that have received grants under the Higher Blends Infrastructure Incentive Program (HBIIP) to use grant funds to cover project costs incurred any time in 2020--before or after their grant agreements are signed.

Right now, funds from HBIIP cannot be used to reimburse expenses that are incurred on qualified projects before a grant agreement is signed. Farmers and businesses in Minnesota and other cold weather states are worried that they will not be able to promptly receive funding and begin construction before cold weather and frozen ground halts their ability to complete projects.

"Our state has proven to be a valuable partner in utilizing USDA cost-share programs to aid in the adoption of infrastructure upgrades that deliver higher blends of biofuels to consumers," the senators wrote.

"Under the original Biofuels Infrastructure Partnership (BIP), the combined federal, state, and matching funds provided investments of $14 million in new biofuels infrastructure in the state, where we now exceed 350 retail stations selling E15," the senators continued. "These efforts have had an enormous impact in driving investment, increasing demand for clean energy, and providing consumers with more low-emission, environmentally friendly fuel choices when they fill up at the pump. Last year, sales of E15 in Minnesota tripled in volume from 2017 and exceeded 70 million gallons."

"With an application window that is set to close on August 13, the effectiveness of the HBIIP in Minnesota and other cold weather states may be limited unless additional flexibility is granted," the senators continued. "We urge you to modify the program to allow grant funds to cover costs incurred during the 2020 calendar year."

For years, Klobuchar and Smith have been leaders in the fight to strengthen the RFS to support American jobs and decrease dependence on foreign oil.

Klobuchar has led several letters urging the Administration to cease issuing small refinery waivers and reject changes to the RFS that would upend stability and predictability for small businesses and rural communities.

In June, Klobuchar led a bipartisan letter joined by Smith, with Senators Joni Ernst (R-IA), Tammy Duckworth (D-IL), and Chuck Grassley (R-IA) urging the Environmental Protection Agency (EPA) to reject petitions for Small Refinery Exemptions (SREs) under the Renewable Fuel Standard (RFS) for past compliance years.

At a Senate Agriculture hearing in June, Klobuchar highlighted the urgent need to help farmers identify conservation techniques that would have the greatest benefit for the climate and farmers' bottom lines. In December 2019, Klobuchar led a public comment letter to EPA Administrator Andrew Wheeler expressing concern over the proposed supplemental rule establishing the Renewable Fuel Standard's (RFS) 2020 Renewable Volume Obligations and 2021 Biomass-Based Diesel Volumes. The senators argued that the proposed rule--which determines how much biofuel is required to be blended into our transportation fuel supply on an annual basis--fails to adequately account for the waivers, including those given to big oil companies. In October 2019, Klobuchar sent a letter, joined by Smith, to U.S. Department of Agriculture Secretary Sonny Perdue asking the agency to document the impact of small refinery waivers on farm income, commodity prices, and renewable fuel usage.

In May, Klobuchar and Senator Chuck Grassley (R-IA) introduced bipartisan legislation to support biofuel producers that are feeling economic hardship from fuel demand and ethanol price declines as a result of the coronavirus pandemic. The Renewable Fuel Feedstock Reimbursement Act will require the U.S. Department of Agriculture (USDA) to reimburse biofuel producers for their feedstock purchases from January 1, 2020 through March 31, 2020 through the Commodity Credit Corporation.

As a senior member of the Senate Agriculture Committee Klobuchar successfully pushed for key climate provisions in the 2018 Farm Bill, including provisions to increase acres in the Conservation Reserve Program (CRP) by 3 million acres, invest in renewable energy programs including the Rural Energy for America Program (REAP), protect native prairies by fixing a loophole in the "Sodsaver" program, and improve the use of conservation data so that farmers are able to make better choices about conservation practices that benefit their yields and the environment - based on her Agriculture Data Act with Senator Thune.

Smith has fought for a strong RFS both in Washington and during her time as Lieutenant Governor of Minnesota. In October, Smith pressed U.S. Deputy Secretary of Agriculture Stephen Censky about Trump Administration policies which have limited the amounts of renewable fuels that are blended into the nation's gasoline supply at a Senate Agriculture Committee hearing. Sen. Smith also led a 2019 letter pressing EPA Administrator Andrew Wheeler to stop abusing oil refinery waivers, pointing out that the granting of waivers had increased by 370 percent compared to the previous administration, with "small refinery" waivers going to large oil companies for the first time. In November, Smith joined several colleagues in submitting testimony for the Congressional Record calling for an end to waiver abuse. Smith is also a cosponsor of the bipartisan Consumer and Fuel Retailer Choice Act. In March of this year, as the coronavirus caused ethanol prices to drop to record lows, Smith pushed President Trump to support the Renewable Fuel Standard (RFS), pressure that helped lead to the U.S. Environmental Protection Agency (EPA) not to appeal a unanimous decision by the U.S. Court of Appeals concerning small refinery exemptions. In May, Smith led a bipartisan letter signed by 22 of her colleagues pushing back on calls by oil state governors and senators to suspend the RFS during the COVID crisis.

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