Washington Announces That an Exemption From a Requirement May Eventually Require Somebody Else to Meet the Requirement
DES MOINES, IOWA – American corn farmers have welcomed the EPA’s latest Renewable Fuel Standard proposal, under which oil refiners may discover that receiving an exemption does not necessarily make the underlying renewable fuel obligation disappear forever.
The EPA’s proposed reallocation of small-refinery exemptions addresses 770 million additional renewable fuel credits beyond the agency’s previous estimate for 2025.
The proposed approach would preserve planned renewable fuel demand by adjusting compliance obligations for 2026 and 2027.
To farmers, the issue involves markets for corn, ethanol and agricultural products.
To Washington, it involves a deeply philosophical question.
When the government grants an exemption from its own rule, does the rule still exist?
The National Exemption Industry
For generations, Americans have understood that rules occasionally contain exceptions.
Washington has perfected this concept by creating regulations, establishing exemptions, measuring the exemptions, recalculating the regulations and then holding hearings to determine whether the exemptions require additional regulations.
It is an extraordinary administrative achievement.
A satirical government analyst compared the system to a restaurant.
“Imagine ordering 100 hamburgers, exempting 30 customers from eating them, then requiring the remaining customers to account for the uneaten hamburgers.”
A farmer asked why anyone would operate a restaurant that way.
The analyst explained that the restaurant was federally funded.
Corn Growers Discover the Magic of Predictability
The EPA’s proposal follows 2025 decisions exempting approximately 1.76 billion renewable fuel compliance credits associated with 29 small refineries.
That exceeded the agency’s earlier estimate by 770 million credits.
The new proposal would address the difference, either distributing the additional amount across 2026 and 2027 or placing it entirely in 2027.
The measure remains proposed, not final.
Corn farmers want predictable biofuel policies because demand for ethanol supports an important agricultural market.
They do not particularly care whether the government expresses that demand using algebra, interpretive dance or a ceremonial presidential corn cob.
They simply prefer knowing the rules before planting.
Refineries Request an Exemption From the Exemption Discussion
An entirely satirical delegation of petroleum executives appeared before Congress requesting relief from complicated federal fuel requirements.
“We support renewable energy,” explained spokesman Chester Octane, a fictional industry representative.
“We simply object to any renewable energy that requires us to do anything.”
The committee expressed sympathy.
An Iowa farmer then requested similar treatment.
“Could I get an exemption from fertilizer prices?”
No.
“Interest payments?”
No.
“Property taxes?”
Certainly not.
“Could my crops be exempt from drought?”
The committee recommended contacting the National Weather Service.
Economists Calculate the Great Energy Compromise
Renewable fuel policy involves competing interests.
Farmers seek markets for crops.
Refiners seek manageable compliance costs.
Motorists want affordable fuel.
Environmental regulators consider statutory fuel requirements and their effects.
A sound policy must acknowledge these interests without pretending one industry’s costs disappear simply because another industry receives relief.
A satirical poll of 500 corn farmers found that 86% supported stable renewable fuel demand.
The other 14% requested that policymakers first define the word “stable.”
One farmer pointed out that Washington’s definition of certainty seemed to change every election cycle.
The Cornfield’s Final Verdict
The EPA proposal offers a mechanism intended to protect previously established renewable fuel volumes from being undermined by excess compliance credits.
It does not guarantee higher corn prices, cheaper gasoline or immediate increases in ethanol production.
Those outcomes depend on market conditions and the final regulatory design.
But the larger agricultural lesson is familiar.
Farmers cannot make long-term decisions using short-term political improvisation.
A fictional Iowa corn grower summarized the situation.
“I plant in April, harvest in October and hope somebody wants the crop.”
He examined the latest federal rule.
“Meanwhile, Washington plants exemptions, harvests confusion and somehow always gets paid.”
A congressional committee announced it would investigate his arithmetic.
The farmer returned to work.
The corn was already growing.
Last Updated on April 25, 2023 by Alan Nafzger