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Ethanol, Ag Groups Raise Alarm Ahead of White House Meeting on Biofuels
Administration officials will have their first White House meeting in a month on the Renewable Fuel Standard, as ethanol makers and corn growers fear an attack on the ethanol mandate. The Iowa Renewable Fuels Association said if the White House weakens the RFS, it “will be viewed as nothing less than a declaration of war on rural America and a complete abdication of [President Trump’s] repeated promises to protect the RFS.”
Oil-state senators, led by Ted Cruz of Texas, have promoted a cap on the price of RINs, the credits that refiners must buy if they don’t blend enough ethanol into gasoline to comply with the RFS. The credits are an onerous cost, according to the industry. The ethanol sector says if low-priced RINs are available, refiners will buy them instead of ethanol. The sector also says the EPA is abusing a hardship waiver intended to help small refineries stay in business.
Some agriculture and ethanol groups urged their members to use Twitter ahead of Monday’s meeting to defend ethanol in messages that include the tag #RFSWorks. “This social effort provides another opportunity for your voice to be heard,” said the National Corn Growers Association on its website.
While the Iowa RFA pointed to reports that EPA administrator Scott Pruitt would attend the meeting, it was unclear who would be at the meeting. President Trump chaired two meetings at the end of March without a consensus on alterations to the RFS. Since then, the issue has been handled at the interdepartmental level. For farm groups, Pruitt, a critic of the RFS when he was an Oklahoma state official, is the bogeyman who would weaken RFS to help the oil industry.
China’s threat of high tariffs on U.S. soybeans, corn, wheat, cotton, sorghum, and beef, coupled with its announcement of a 25% tariff on U.S. pork, could become an argument against changes to the ethanol mandate since the ethanol industry is concentrated in the Midwest, where many of those crops are grown.
Farm groups and the oil industry have fought for decades over biofuels. The RFS guarantees biofuels, mainly corn ethanol and soy-based biodiesel, a share of the U.S. fuel market. The oil industry says the gasoline market is saturated at the traditional 10% blend of ethanol into gasoline, and relief is needed. Farm groups say the solution is for EPA to approve year-round sales of E15, a higher ethanol blend. Only a small number of gas station pumps can handle higher ethanol blends.