No deal reached at White House RFS meeting; follow-up set March 1

By Erin Voegele and Ron Kotrba | 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-Pennsylvania; 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, stressing 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.”

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.

Cruz said the Whitehouse meeting on “fixing the broken RINs system,” as he called it, was positive and productive.

“I commend President Trump for bringing the two sides together and for leaning in hard to find a win-win solution that benefits both Iowa farmers and blue-collar refinery workers,” Cruz said. “We made real progress, and, with the President’s leadership, I believe we are close to solving the problem. At the conclusion of the meeting, President Trump asked that we convene another White House meeting this week with representatives of the ethanol industry and with refineries facing crushing job losses under the current RINs system. After that meeting, I believe we are likely to arrive upon a win-win solution that, one, stops the RINs system from imposing billions in unnecessary costs for refineries and threatening the jobs of tens of thousands of blue-collar union workers, and two, expands the potential market for ethanol, allowing corn farmers to sell substantially more corn each year.”

When asked if they think Cruz will back off 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 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.”

Ernst stressed that the economics behind these RFS and RIN proposals are unknown. “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...”

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 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 proposals 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 said. “Iowans will not have the wool pulled over their eyes, and we made this very clear in today’s meeting.”


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