A top Democrat who has both refiners and renewable fuel producers in his state told President Trump Friday that he must deal with market manipulation as he tries to solve the growing concerns over the nation’s ethanol mandate.
Sen. Tom Carper of Delaware, the top Democrat on the Environment and Public Works Committee, told Trump in a letter that one problem that both sides see as a concern is “market manipulation” in the ethanol credit trading market.
“It’s clear that market manipulation in the RIN market is occurring, and it is causing market volatility and price spikes. It must be addressed in any solution,” Carper wrote.
Renewable Identification Number credits, or RINs, must be bought by independent refiners that don’t have the infrastructure to blend ethanol into gasoline, required under the Environmental Protection Agency’s Renewable Fuel Standard. Trump has been trying to address the high cost of RINs, after the largest refiner on the East Coast, Philadelphia Energy Solutions, filed for bankruptcy protection, blaming the hundreds of millions of dollars it had to spend on the credits.
Carper is no fan of Trump’s energy and environmental agenda, and he had tried to block the confirmation of EPA Administrator Scott Pruitt. But Friday’s letter may mark an attempt to mend fences with the administration.
On the RIN problem, Carper agrees with Pruitt. The EPA chief recently suggested going after market speculators who are driving up the cost of the credits.
Carper, in his letter, praised Trump for attempting to solve the issue with a number of meetings in recent weeks to discuss concerns from both sides. “I appreciate your efforts to bring biofuel and refinery stakeholders together,” Carper wrote.
In those White House meetings, Republican senators have led the discussions, with no Democratic lawmakers in attendance. Carper’s letter could indicate that he wants to be part of the discussion.
His letter offers a detailed blueprint for what Trump could do to address market manipulation.
He wants the president to direct the EPA “to be more transparent” by providing trading data to market participants from a RIN tracking program that the agency maintains, called the Moderated Transaction System. EPA does not regulate the market, but collects data on how many RINs are available and who is generating them.
But Carper wants the EPA to go farther and become more of a cop on the beat. He recommended that Trump also direct the agency to collect “better data to detect and prevent RIN market manipulation,” according to the letter.
He also wants Trump to direct the Commodity Futures Trading Commission, the watchdog for some financial markets, and the Federal Trade Commission to work with the EPA to help monitor RIN market behavior.
