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Neighbors Growing Together | Jun 24, 2018

White House biofuels meeting ends as battle continues

By Ed Tibbetts, Quad-City Times | Mar 01, 2018

WASHINGTON, D.C. — A White House meeting over the country’s biofuels mandate ended Tuesday with “no deal,” Sen. Chuck Grassley, R-Iowa, said, as the ongoing battle between farm and oil-producing states over the 13-year old Renewable Fuel Standard continues to rage.

On a conference call with reporters after the much-hyped meeting that included President Donald Trump, Sen. Ted Cruz, R-Texas, Grassley and Sen. Joni Ernst, R-Iowa, Ernst said the dispute over the impact of the law and its compliance system still is up in the air.

“No guarantees on anything,” Ernst said. “It’s status quo.”

Cruz, though, issued a statement saying the meeting was productive, adding, “we are close to solving the problem.”

It’s not clear what a solution might entail.

Cruz has called for a cap on the price of Renewable Identification Numbers, or RINs. Refiners say the high price of the credits, which demonstrate compliance with the renewable standard, are driving up costs. But Grassley and Ernst said Tuesday neither a cap nor a waiver of the obligation to meet the blending requirements of the law are an element of an acceptable compromise.

That “would not be a win-win,” Grassley said.

In his statement, Cruz said the elements of a solution are stopping RINs from “imposing billions in unnecessary costs” and expanding the market for ethanol.

The White House meeting came just weeks after a Pennsylvania refinery filed for bankruptcy protection, pointing a finger at the price of the RINs. Last week, Cruz joined workers at Philadelphia Energy Solutions, calling for changes to the RFS, which requires a certain amount of renewables be blended into the nation’s gasoline supply.

The biofuels industry has argued the bankruptcy is due to mismanagement, not the RFS, a charge the refinery rejects.

One development out of Tuesday’s meeting was that Cruz released his monthslong hold on Iowa Agriculture Secretary Bill Northey’s nomination to take a top post at the U.S. Department of Agriculture. Iowa Republicans had objected to the move and pressured Cruz to relent. The Texas senator said Tuesday the White House meeting was what he needed to release the hold.

Northey was swiftly confirmed on a voice vote at about the same time as the meeting was taking place. Northey will be the new undersecretary for Farm Production and Conservation at the USDA.

Grassley and Ernst said there appears to be disagreement in the Trump administration about the idea of allowing exports to count as credit toward meeting the RFS volume requirements, which appear to be an element of the talks.

That was a possibility floated last year within the Environmental Protection Agency, but it was abandoned. The biofuels industry and its supporters like Ernst and Grassley oppose such a move. But the Iowa Republicans said there is disagreement in the Trump administration over it.

There also has been discussion of putting limits on who can trade the RINs. Grassley said banning speculators wouldn’t hurt ethanol. He’s also proposed changes that would allow wider sale of E15.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said Tuesday that he believes Cruz is pushing a waiver that would “gut” biofuels demand. And he warned that granting the request would be a “complete abdication” of the president’s promise during the 2016 campaign to support the RFS.

Ethanol backers have repeatedly brought up Trump’s pledge of support. But critics of the RFS have also cited the president’s campaign pledge to support manufacturing workers, like those at the Pennsylvania refinery.

Grassley said Tuesday he believes the president is an “honest broker” in the dispute, which involve politically important states. “I don’t know that he has a definition of what’s fair, but he’s going to try to be fair,” Grassley said.

The next step appears to be a Thursday meeting that is being organized to talk further about the issue. The meeting is expected to involve stakeholders on both sides of the issue.

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