Both constituencies are important to Trump’s 2020 re-election bid and both say they have been damaged by his administration’s policies, but Midwest farmers in particular have been giving Trump political headaches and — separately from the biofuels fight — have sustained economic damage from the year-long trade war with China.
Sound confusing? Well, it is, partly because the President did not offer any details beyond dangling the terms “Ethanol” and “small refineries” in a Tweet.
Trump posted a message on Twitter Thursday that said he is about to deliver a big prize, which he describes as a “giant package” to “the Farmers.” His choice of words suggested that he intends to address the RFS fight — no simple task.
He wrote:
The Farmers are going to be so happy when they see what we are doing for Ethanol, not even including the E-15, year around, which is already done. It will be a giant package, get ready! At the same time I was able to save the small refineries from certain closing. Great for all!
Might sound good to some, perhaps, but it leaves questions.
Whatever the bargain turns out to be, Trump’s moves are limited and may rely on a part of the renewable energy policy that he never discusses and that is not mentioned in the Tweet: biomass-based diesel and renewable diesel.
That is because one of the implements in EPA’s toolbox, should Trump direct the agency to improve the Midwest farm belt’s lot, would be to boost the amount of mandated biofuel blending for 2020 and 2021. “Biofuel” means more than just ethanol; it includes several forms of biodiesel, and allowing growth in that sector could very well be a necessary part of any settlement to the RFS fight. And the biodiesel industry argues it has plenty of capacity for market growth that is not being tapped.
Because ethanol often gets the lion’s share of attention in hearings and in the news media, the corn derivative seems to have become the shorthand for biofuel, much like “Coke” stands in for the entire range of carbonated beverages for people of many cultures, a kind of universal term for “soft drink.” It is unclear whether biodiesel was part of any White House discussions underlying Trump’s informal announcement about an “Ethanol” deal.
“We feel many times we are one of the forgotten pieces of the RFS,” National Biodiesel Board (NBB) CEO Donnell Rehagen said Thursday.
| “Your EPA recently proposed a rule for the 2020 RFS standards that sends a chilling signal that the market for biodiesel and renewable diesel will be capped.” –Soybean producers in letter to Trump |
Rehagen said in during a call with reporters Thursday that flat growth in the biodiesel volumes under the RFS and the recent small refinery exemptions (31 given in August by EPA to refiners, adding an estimated $1.43 billion in compliance credits — RINs — back into open trading) “represents a rollback for our market” at a time when the biodiesel industry believes government should be allowing for growth. The Iowa Soybean Association said Aug. 21 that market prices for soybeans, a biodiesel feedstock, are at multi-year lows.
The biodiesel industry has argued repeatedly, and has even sued in federal court over the issue, that it can handle growth and EPA is not giving it the market share under the RFS that the industry has proved it can absorb. On Thursday’s press call, responding to a reporter’s question about growth capacity, NBB’s Vice President of Federal Affairs Kurt Kovarik said, “Biodiesel is uniquely situated in that we’ve always produced above the volume that EPA has set; we do not have infrastructure constraints and we have no feedstock botttlenecks, so capacity to produce well beyond what the government sets” have been consistently demonstrated over the past several years.
In an Aug. 23 letter to Trump, a group of soybean producer associations from 10 Midwestern states wrote, “Your EPA recently proposed a rule for the 2020 RFS standards that sends a chilling signal that the market for biodiesel and renewable diesel will be capped. And then the agency topped that off by further rolling back those volumes through additional small refinery exemptions. More than that, EPA has proposed to ignore a Court order to restore gallons to the RFS program that it unlawfully reduced in 2016.”
Underlying all of the controversy over volumes, however, is a surfeit of small refinery exemptions under the RFS, and no discussion of the mandated volumes is complete without taking into account these waivers because, farmers and biofuel producers argue, they cancel out much, if not all, of the increased blending volumes that Congress intended to help develop biofuel markets.
For the 2018 compliance year, EPA handed out an estimated 1.43 billion gallons worth of blending waivers, and in so doing, returned $1.43 billion in RINs to refiners and other obligated parties who bought the RINs during 2018 to comply with the minimums pending the outcome of their petitions for exemptions, through 31 small refinery exemptions.
If EPA continues to hand out small refinery exemptions at the same rate as the past two years, it will reduce biodiesel demand by 2.54 billion gallons and cause a $7.7 billion loss for the industry, according to University of Illinois economist Scott Irwin.
| A Potential White House Deal The history of the RFS controversy suggests possible components of a White House deal would need to include: A boost in the annual volumes for 2020 for biofuels that must be blended into conventional transportation fuel under the RFS; Reversing a 500 million-gallon reduction in those volumes — known as the Renewable Volume Obligations, or RVOs — that a federal court determined EPA, under President Barack Obama, must restore because it unlawfully waived the volume from the blending mandates; Accounting for a surfeit of SREs that Trump’s EPA gave over the past two years that add up to around two and a half billion gallons of biofuels removed from the blending mandate, an important market for farmers of biofuel feedstocks like corn and soy. |
Soybean farmers are not the only group pointing out that the federal government is ignoring potential growth in the use of biodiesel. A bipartisan group of 39 U.S. senators, many of them (but not all) from the Midwest, wrote that they thought EPA did not raise the mandated 2020 volume for biomass-based diesel enough after the agency released a proposal for modest increases last summer.
“While these proposed increases are encouraging, these volumes continue to underestimate the existing potential of the biodiesel and renewable diesel industries in our states,” the senators wrote. “We believe the biodiesel industry can do more and that EPA should demonstrate more confidence in the RFS program’s ability to drive growth. Increasing biomass-based diesel and advanced biofuel volumes would encourage investment in capacity and new fuel development.” EPA did not heed their advice.
Republican Sens. Chuck Grassley and Joni Ernst of Iowa, were among the signers.
All-important Iowa — electorally speaking — sits at the heart of the debate. Not only is it a big biofuel producer and agricultural jugarnaut, it has in Grassley and Ernst two renewable energy champions in the Senate. The renewable fuels industry there accounts for nearly $5 billion of Iowa’s gross domestic product, generates more than $2.4 billion of income for Iowa households and supports almost 47,000 jobs throughout the entire Iowa economy, Gov. Kim Reynolds told EPA last year in a hearing.
Iowa’s interests encompass both the ethanol and biodiesel components of the RFS.
NBB’s Rehagen concluded, “My original point — it seems that there’s always an emphasis or connection to ethanol in the RFS. Biodiesel and renewable diesel are never thought of as much, even though we have a huge impact. We hope the President understands that biodiesel must be considered in that list, and moreover, restoring the demand under the RFS is the only thing that can help the biodiesel industry.”
As of publication of this article, there was is no word on when or how the White House may roll out the announcement of an RFS deal.
— Dan Macy
]]>An eulogy for Ren Rong, who briefly served as party secretary for the autonomous Tibet region in the early 70s, noted him as a beacon of “determination and…glorious deeds.” Somebody the “masses of all nationalities in Tibet can never forget.”
Sophie Richardson, China Editor for Human Rights Watch News, believes Tibetans will remember him for entirely different reasons.
She penned another depiction of him in an article for the rights group’s website.
Richardson notes that Rong rose to power under Mao Zedong during the Cultural Revolution, one of the most brutal periods of Communist rule in China. He later helped oversee the extension of martial law in 1970, following the violent suppression of the 1969 uprisings throughout the Tibet autonomous region. He later became Party Secretary of the region in 1971.
She writes, “Yet Rong’s and others’ rule was so heavy-handed it prompted a rare public apology by the party’s general secretary, Hu Yaobang, during a 1980 visit to the Tibetan capital, Lhasa.”
]]>But some analysts say the Chinese citizens can expect a remake of the last five years, starring President Xi Jinping.
The party boss and head of China’s growing military is all but guaranteed a second term. In the last one alone, he has encroached upon the framework of government and the lives of ordinary citizens in ways not seen in decades. He has built the party up with loyal allies and vanquished rivals through his widespread anti-corruption campaign.
He’s even developed a mild cult of personality.
In fact, Xi protégé and party leader of Beijing Cai Qi has directed his officials to consider Xi’s compiled speeches as “the most important book on your desk, your main reference work, and your source of mottoes.”
Several official government meetings have even revolved around directing the rank and file to uphold the authority and to refrain from making “improper comments” about party policy.
And new policy is expected to be unveiled at the congress under Xi’s direction. Unessential government work will remain on hold until the congress. It likely will break down as follows.
A few thousand delegates will select a 200-member central committee. That committee will then create a roughly 20-member politburo. Xi will likely run unopposed for the role of party boss — his name likely to be the only one on the ballot.
The process echoes back to China’s first Communist leader Mao Zedong, who ruled until his death in 1976. Historically, the congress has been held to give the party leader another term and to retire the politburo standing committee of about five to nine people.
But some of Xi’s supporters argue the tone of the times may call for a third term under Xi, pushing his rule well into 2027.
]]>Both sides have denied the other’s calls to pull troops back. In a last attempt, China offered to move back 328 feet instead a requested 820 feet as long as they got clearance, but the call has not been answered.
The dispute began in June when India’s military moved into the region to stop a Chinese construction crew meant to establish a road that India argues would give the Chinese military too much access than they are willing to allow.
“It is a logjam, there is no movement at all now,” said a source with knowledge of the talks in an interview with Reuters.
Meanwhile, Chinese state media has been warning of an escalation to the standoff, which now marks the most hostile instance the two countries have faced since their bloody border clash in the 1980s.
“If the Narendra Modi government continues ignoring the warning coming from a situation spiraling out of control, countermeasures from China will be unavoidable,” read a report by the Global Times.
The year thus far has not been a good one for relations between China and India, which remains perturbed by Beijing’s growing ties to its rival Pakistan. Furthermore, India refused to take part in Chinese President Xi Jinping’s proposed Belt and Road initiative to connect Asia and open up the doors for trade beyond. China has warned New Delhi to be weary of a Western military alliance with the United States and Japan. Prime Minister Narendra Modi has drawn closer to both.
]]>“One thing we’re seeing is a tactical adjustment on Beijing’s part to Trump,” says John Delury, associate professor of Chinese studies at Yonsei University in Seoul in an interview with CNBC. “There’s a kind of game here where Beijing is playing along to a certain extent, almost to call Trump’s bluff, and to get the Americans to recognize they have the key in their hand to unlock the problem.
“The key is not military. When you start to look carefully at the military options, they are horrific, just given the economic vulnerabilities of everyone in this neighborhood. The key the U.S. has is diplomacy.”
Following the North’s missile test in February, China officially decided to cut coal imports. Moreover, Chinese state-run media is beginning to report thoughts of cutting oil shipments. Today, two thirds of North Korea’s trade are with China giving Beijing immense leverage. And many analysts believe the country is finally moving forward to test it.
At least two-thirds of North Korea’s trade is with China, giving Beijing tremendous leverage over the state. Recent reports indicate that Chinese authorities are beginning to test that power.
“Clearly the Chinese regime is losing patience with North Korea,” says Michael Hirson, Asia director at consulting firm Eurasia Group. “We’re seeing some incremental steps that the Chinese may be in favor of doing more.”
]]>Speaking on condition of anonymity, a senior Administration official told NBC news that Secretary of State Rex Tillerson would finalize the meeting during his official trip throughout Asia, which includes a stop in China on March 19.
The Trump and Xi meeting will follow a series of official sessions executed to ease relations between the two countries following President Trump’s fierce criticism of China. During his pull-no-punches campaign, Trump accused Beijing of engaging in unfair business practices, manipulating currency, and militarizing the South China Sea, which remains a contested region between China and her neighbors – many of whom are U.S. allies.
Security interests and economic ties were among topics discussed between China’s State Councilor Yang Jiechi and officials in Washington including Trump and Tillerson.
Beyond Trump’s comments, the president was also angered China after taking an official phone call from Taiwan President Tsai Ing-Wen, technically breaking decades-long tradition of non-official relations with Taiwan. Trump took it a step further by declaring the U.S. can always walk away from the One-China policy, which maintains Taiwan is under Chinese control. Trump later assured the U.S. would respect the doctrine during a phone call with Xi last month.
]]>The same, however, cannot be said of the second-highest figure in Tibetan Buddhism, the 11th Panchen Lama. Rather than be a voice of wisdom, he has become yet another face of Chinese Communist propaganda.
China, officially, is an atheist nation. However the Party, ignoring the religious and cultural significance of Tibetan Buddhism, decided it was best to select a new Penchant Lama. And so it did just that: in 1995 in an effort to win the support of Tibetans – a failed quest, I might add – the CCP named Gyaltsen Norbu as the 11th Panchen Lama.
The Panchen Lama, who is believed to spend most of his time in Beijing rather than in Tibet, met with head of the United Front Work Department Sun Chunlan Friday where he vowed to uphold the “glorious tradition” of patriotism, state-run news agency Xinhua News reported.
Xinhua paraphrased him as saying, “[he will] resolutely endorse comrade Xi Jinping as the core of the Communist Party, endorse socialism with Chinese characteristics and continue the glorious tradition of Panchen Lamas in the history of loving the country and loving religion.”
The irony, as you can see, is incredible. But unfortunately this statement is no Alec Baldwin-plays-Trump-on-SNL scenario; it’s not a joke story. No, this young man actually is the second-highest figure in Tibetan Buddhism, his young mind warped by China’s overbearing authoritarian government.
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Now, the government of the African island nation of Sao Tome and Principle have cut official ties with Taipei. Any government wishing to establish diplomatic relations with China must support the One China policy and shun Taiwan. This notion is recognized by the United States and other world powers.
China welcomed Sao Tome’s move and congratulated the island nation for getting “back onto the correct path of the One China principle.”
The shift comes a little more than a week after president-elect Donald J. Trump pulled away from traditional diplomatic policy and said the U.S. does not have to recognize the One China Principle. No stranger to controversy, Trump also shocked media pundits across the nation after becoming the first U.S. soon-to-be president to have official communications with a Taiwanese authority, after he said he accepted a congratulatory phone call from Taiwan President Tsai Ing-wen.
Taiwanese Foreign Minister David Lee says that Sao Tome was demanding “an astronomical amount of financial help.” He provided no further details on the topic but added, “We think the Beijing government should not use Sao Tome’s financing black hole … as an opportunity to push its ‘One China’ principle”
“This behavior is not helpful to a smooth cross-strait relationship.”
]]>On Saturday, China made its response. And spun its own version, too. A statement was made by China’s Defense Ministry spokesperson Yang Yujun, who said, “In order to prevent the device from causing harm to the safety of navigation and personnel of passing vessels, the Chinese naval lifeboat verified and examined the device in a professional and responsible manner,” according to a translation from state-run media Xinhua News.
The statement took a bitter turn, accusing the US of choosing to “dramatize” the situation:
“The Chinese side has decided to hand over it to the US in an appropriate manner. Both sides have been maintaining communication on the issue. The US side’s unilateral move to dramatize the issue in the process is inappropriate, and not conductive to its settlement. We regret that,” it read.
In a sort of international game of “he-says-she-says”, China is claiming the above, being that they confiscated the American drone to ‘prevent harm’ for passing boats in the area and to examine the device. Washington, however, says that the Chinese vessel was following the American ship, and that the origin of the UUV was not in question.
An NPR article published Friday explained the Pentagon’s version:
“The Bowditch was retrieving one vehicle when a Chinese warship pulled up, put a small boat in the water and retrieved the second UUV, officials told reporters.
“The U.S. sent radio messages requesting that the drone be returned, the Pentagon statement said, but the Chinese ship merely acknowledged the messages and ignored the request.
“No shots were fired by either vehicle, officials said, and the Chinese ship left with a final message that it was returning to normal operations — and with the drone.”
The drone-snatching incident occurred shortly after an American think tank released detailed satellite photos showing China’s increase in military presence on artificial islands the meganation built in the disputed maritime region.
The revealing images were brought to light by the Asia Maritime Transparency Initiative.
AMTI’s director Greg Poling sat down for an interview with NPR’s Scott Simon Saturday. Responding to a question regarding any military or strategic interest the drone may have, Poling said, “The real interest, I suppose, would be if there was some advanced technology on this drone — and we’re not going to know that, of course. The Pentagon won’t tell you exactly what sensors were on it, whatnot — and the Chinese wanted to reverse-engineer it.”
“But even by Beijing’s own maps, this was [in] international waters,” Poling told NPR.
Washington says that USNS Bowditch – which according to the US Navy’s Military Sealift Command is a twenty-year-old ship that has “an all-civilian crew of civil service mariners and scientific support personnel” – was conducting ocean research when the Chinese warship overtook it.
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The former Secretary is known for paving the road for Richard Nixon’s historic visit to China in 1972. That moment opened dialogue at a time when relations were tense and uncertain. Fast forward to 2016, and the countries are again at those crossroads.
Trump rose to victory on a heated campaign where China was one of his many targets. He accused Beijing of manipulating currency and threatened to impose a 45% import tariff on the country. But beyond handling the business relations between the world’s two largest economies, the billionaire real-estate mogul will also have to navigate the diplomatic waters of China’s ambitions in the South China Sea.
Nonetheless, Xi expressed to Kissinger that he hopes the two nations can move forward and strengthen relations.
“The presidential election has taken place in the United States and we are now in the key moment. We, on the Chinese side, are watching the situation very closely. Now it is in the transition period,” Xi told Kissinger in front of a group of reporters.
“Overall, we hope to see the China-US relationship moving ahead in a sustained and stable manner.”
As for Trump’s threats on China, Kissinger believes not much will come out of it. In an interview with CNN’s Fareed Zakaria, Kissinger said: “One should not insist on nailing him into positions that he had taken in the campaign, of which he doesn’t insist,” Kissinger said in the interview. “If he insists on them, then of course … disagreements will become expressed.”
Nonetheless, Kissinger expressed admiration for the president-elect, whom he recently met in New York. He called him the “most unique” president-elect in his lifetime, who had “no obligation to any particular group because he has become president based on his own strategy”.
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