No deal reached at White House RFS meeting

By Erin Voegele | February 27, 2018

No deal on Renewable Fuel Standard reform was reached during a Feb. 27 meeting at the White House. President Trump has requested to meet with representatives of the biofuel and oil industries on March 1 to continue the conversation on possible RFS reform.

On Feb. 27, Sens. Chuck Grassley, R-Iowa; Joni Ernst, R-Iowa; Ted Cruz, R-Texas; and Pat Toomey, R-Pa.; met with Trump at the White House to discuss the RFS. Agriculture Secretary Sonny Perdue and EPA Administrator Scott Pruitt were also in attendance.

According to Grassley, no deal on RFS reform was reached during the meeting. “I think that’s pretty significant,” he said. He also stressed that no assurances or commitments were made. “Sen. Ernst and I attended the meeting because we are always willing to meet with our colleagues and engage in good faith discussion on any topic, especially when the president is involved,” he continued.

Ernst said that the conversation at the White House was very similar to previous meetings with Sen. Cruz. Grassley said that at those past meetings, there seemed to be no proposal, other than freezing the price of renewable identification numbers (RINs).

Cruz has been pushing for RFS reform, blaming the recent bankruptcy of Philadelphia Energy Solutions on the biofuels program and the price of RINs. On Feb. 21, Cruz spoke at a rally against the RFS held at PES. Grassley has spoken out against the claims made by Cruz and PES, and recently released analysis showing that financial difficulties experienced by PES are primarily the result of changes in its available feedstock and management decisions, not the RFS.

When asked if they think Cruz will back off of the RFS issue now that the White House meeting has taken place, both Grassley and Ernst said no. “I wouldn’t expect Sen. Cruz to back off on an any position he has on any subject,” Grassley said.

“I think that this is an issue that the industry has fought for many, many years now,” Ernst added. I anticipate that we’ll see the same coming from the oil refiners moving into the future. We support our biofuels. I know Cruz supports his Big Oil. We’re going to be fighting this out.”

When asked about proposed plans to allow RINs to be generated for exported volumes of ethanol, Grassley stressed he thinks that proposal would be harmful to the ethanol industry. He also indicated that there seems to be some dispute within the Trump administration over what would be potentially harmful or beneficial about allowing RINs to be generated for exported volumes of ethanol.

Ernst also said there seems to be a lot of disagreement over the issue. She also stressed that we currently don’t know what some of the economics behind these RFS and RIN proposals would be. “We haven’t seen anything,” she said. “So, to randomly agree on any proposal at this point is premature because we don’t know what would be helpful for the industry, what would be harmful for the industry. So, we’ve pushed back a little bit on that, but again there is dissension amongst the ranks, even when it comes to exports.”

Grassley did offer a few examples of what he views as “win, win” proposals. He said he supports additional transparency in RIN trading. “Sen. Cruz has talked a lot about wall street speculators driving up these certificate prices,” he said. “EPA has the authority to ban these speculators from the RFS. Doing so wouldn’t hurt ethanol or oil.” Grassley also said he supports making E15 available year round and re-upping a USDA program that helps incentivize the installation of E85 pumps as gas stations.

Grassley also said he and Ernst have made it clear that a cap on RIN prices or a waiver credit for RINs would not be a win-win solution. Rather, those proposals would “undercut demand for ethanol and undermine the integrity of the RFS. Farm jobs and blue collar energy production jobs would be lost as a result.”

Ernst stressed that she and Grassley have made it clear that they will not support any change to the RFS that will harm the biofuels industry. RINs reform and proposal over export RINs would undermine the ethanol and biodiesel industries, she said. “The bottom line is these changes will come at the expense of farmers in Iowa and across the heartland,” Ernst continued. “Iowans will not have the wool pulled over their eyes, and we made this very clear in today’s meeting.”

Several representatives of the biofuels industry have spoken out in support of the commitment Grassley and Ernst have shown to the industry and the RFS.

“We are grateful to our Senate champions, Sens. Grassley and Ernst, for continuing to stand up for the biofuels industry and against any proposal that would lead to a loss of jobs across America’s heartland,” said Emily Skor, CEO of Growth Energy.

“Everything Sen. Cruz has offered would gut the Renewable Fuel Standard and halt expansion of homegrown biofuels here in the US,” said Kyle Gilley, senior vice president of external affairs and communications at Poet. “It is unfortunate that Midwest farmers—suffering from an ag crisis today—are being put in this tenuous position based on the bogus narrative being stoked by Sen. Cruz.”

“A solution exists to both lower RIN prices and expand biofuels use,” Gilley continued. “Relief from outdated Reid Vapor Pressure regulations would give U.S. drivers greater access to high-octane E15 and increase the number of RINs available to refiners.

“Senator Cruz is working with administration allies to unravel the regulatory framework of the Renewable Fuel Standard,” Gilley said. “Our environment, air quality, economy and family farms across America are at risk because of their reckless actions. The RFS works. Any efforts to alter its framework to benefit fossil fuel companies will only hurt rural communities and farmers.”