The pro-ethanol camp emerged from meetings with President Trump Thursday saying that the only way forward for the nation’s renewable fuel mandate is to blend more ethanol year-round, not to give oil refiners a way out from doing so.
Sen. Chuck Grassley, R-Iowa, representing the ethanol side of the debate, said even though his camp believes allowing higher blends of ethanol into the market is the best answer to solve the RFS puzzle, “no decisions were made” by the president or policymakers at the Thursday meeting.
The meeting was the second time Trump met this week with the goal of trying to work out a compromise between the renewable fuel industry and oil refiners on how to resolve concerns over the Environmental Protection Agency’s Renewable Fuel Standard.
Sens. Ted Cruz, R-Texas, and Pat Toomey, R-Pa., represented the refiners at the meeting, with a number of CEOs from Valero, PBF, and Monroe Energy. Biofuel and ethanol producer CEOs were also represented alongside the president and the Republican senators.
Cruz is floating a proposal to relieve refiners from having to buy expensive ethanol credits, or RINs, to meet the renewable fuel blending requirements under the RFS. The proposal would cap the price of RINs at 10 cents, which continued to be a nonstarter for Grassley and ethanol CEOs without more study.
“Both sides made their case and the only agreement was to look at economic studies for impact,” Grassley said. The Iowa Republican scolded EPA Administrator Scott Pruitt earlier Thursday for not answering a request for more information on Cruz’s RIN proposal and how the credits affect the refinery industry.
Bob Dinneen, the president and CEO of the ethanol lobbying group Renewable Fuels Association, said his members “continue to believe the appropriate response to unfounded concerns about Renewable Identification Number (RIN) prices is to expand ethanol use.”
That would be accomplished by allowing 15-percent ethanol blends to be sold year round, as opposed to the current national standard of 10-percent ethanol blends, which make up most of the gasoline sold in the United States.
The EPA would have to waive fuel volatility restrictions for E15 to allow the fuel to be used across all seasons. It is currently restricted from use in the summer months. Dinneen said he was pleased that the issue was given “positive attention” during the meeting, but he did not go as far as to say Trump was convinced.
Cruz has said he wants the ethanol industry to thrive by blending ethanol in gasoline. That is part of a deal he wants to work out with Trump’s help. But it would have to be matched by the pro-ethanol camp’s acceptance that RIN relief is also necessary, which may be a bridge too far.
Others said Trump embraced the idea of blending more E15 as the solution to high RIN credit prices. Monte Shaw, the head of the Iowa Renewable Fuels Association, said Trump’s business acumen showed up on Thursday.
“Trump quickly grasped how allowing the year-round sale of E15 would increase ethanol blending and the supply of RFS credits, thereby lowering their cost for refiners,” Shaw said. “While refiners continue to ask the president to abdicate his support for the RFS, today’s meeting clearly highlighted that E15 can boost biofuel use and lower RFS credit prices without destroying the RFS.”
The Fueling American Jobs Coalition, representing independent refiners affected by RINs, said the Thursday’s meeting is part of an ongoing discussion that “continues the clear forward momentum towards a durable solution.”
“We had a productive meeting today with senators on both sides, along with representatives from the unions, ethanol and refining industries, and motor fuel retailers,” Sens. Cruz and Toomey said in a joint statement. “We are making real progress, and, with the president’s leadership, we believe we can and will ultimately solve the problem.”
The senators added that they were encouraged that Trump “recognizes the importance of providing relief from crushing RINs costs and expanding the potential market for ethanol,” and are “grateful for the commitment he’s displayed to continue talks that will result in a win-win solution for both parties.”
