SIOUX FALLS, S.D. (KSFY) - A policy reversal from The White House has South Dakota farmers and biofuel producers resting a little easier because it clears the way for future ethanol production nationwide.
At a time when the farm economy is having a tough time because of the ongoing trade war with China, this change comes as welcome news.
South Dakota farmers say this 180-degree change from the White House is a new reason to feel good about ethanol's future.
"What this announcement brings when implemented is greater certainty about what the future holds for renewable fuels for farmers here in South Dakota," South Dakota Senator John Thune said.
40 percent of South Dakota’s corn supply goes into ethanol production so it's big business for corn producers in the state. Senator Thune said this new deal restores integrity to the renewable fuel standard that was undermined by small refinery exemptions the Trump White House had approved.
Those exemptions meant qualifying refineries didn't have to work with ethanol because of the cost involved.
"And unfortunately the EPA notwithstanding sometimes I think the best intentions of the white house has not been so good at following through on the president’s commitment and promise to the ethanol industry and corn farmers across the country," Senator Thune said.
Thune has openly criticized the EPA’s use of exemptions which have waived billions of gallons of biofuel blending.
"Many of the recipients have not been small refineries. They’ve been companies like Exxon and Chevron so it's been very misused," Senator Thune said.
Leaders have been encouraging the administration to put in place a clear understanding to enforce the law which is blending 15 billion gallons of ethanol every year adding more options and lower prices at the pump.
Poet CEO Jeff Broin said his company has seen many negative effects from the waivers as well.
"Poet has also seen that we've slowed production at some of our facilities. We closed one facility in Indiana and so we are decreasing our ethanol production," Broin said.
Broin has spoken with other farmers about the new ethanol production plan and says while they're upset about the obstacles they've been through they're hopeful this new proposal will help.
"I’ve heard that they're feeling better. They’re waiting to see what comes out of this package," Broin said.
Thune said all of this ties into national security and energy security because without ethanol the U.S. could have a dangerous dependence on oil-producing, Middle Eastern countries.
While the White House is reversing course on ethanol, it is not backing away from the small refinery exemptions that have already been issued.
Right now it's unclear what will be specifically done to return ethanol usage levels to their previous levels.