Trump tells Wheeler to ‘make sure the small refineries are happy’

The U.S. EPA’s recent actions regarding small refinery waivers (SREs) were addressed during an Oct. 21 cabinet meeting at the White House. President Trump directed U.S. EPA Administrator Andrew Wheeler to “make sure the small refineries are happy” while USDA Secretary Sonny Perdue said farmers will be fine with the EPA’s SRE plan once they see it implemented.

The comments on ethanol and SREs were related to the supplemental notice of proposed rulemaking issued by EPA Oct. 15 that seeks comments on the agency’s plan to reallocate future Renewable Fuel Standard gallons lost to SREs. Although biofuel and ag groups initially praised an Oct. 4 announcement that the White House had brokered a deal on SREs, they later criticized the administration and called the supplemental rule a bait-and-switch.

When the White House briefed ag and biofuel groups on the deal on Oct. 3, they said the EPA would use a three-year rolling average of actual SRE waived volumes to account for future SREs in annual rulemakings to set RFS blending targets. The actual rulemaking released Oct. 15, however, proposes to use a three-year rolling average of U.S. DOE SRE recommendations rather than actual waived volumes. The rulemaking sparked outrage in the biofuel and ag industries because the EPA in recent years has largely disregarded DOE recommendations during its process to evaluate and approve or deny SRE applications. While the DOE recommended the EPA approve SREs accounting for total of 2.3 billion renewable identification numbers (RINs) for compliance years 2016-’18, the EPA has to date approved SREs accounting for 4.04 billion RINs. Two SRE applications for compliance year 2018 are still pending.

During the cabinet meeting, Trump told EPA Administrator Andrew Wheeler, “I know you are working on the small refineries—getting that straightened away so that it’s going to be terrific for the small refineries. They’ve been hurt for a long time, and we gave them waivers for this year. And that will—that’s helped them a lot. But, I want you to work on that. Make sure the small refineries are happy.”

Trump also said “and for the farmers, ethanol has now been fully approved.” He referenced discussions with Sens. Joni Ernst, R-Iowa, and Chuck Grassley, R-Iowa, and said “the whole situation with ethanol that has been going on for so long, for so many years—we have that now where its finished, approved, done and we’re getting things ready to sign.”

Trump then asked Perdue to talk about ethanol and farmers. In response, Perdue noted Trump has committed to and fulfilled his promise of making E15 year-round. “That’s what’s really needed to build infrastructure,” Perdue said. “That’s a 50 percent increase in domestic usage there, which will happen. Good for the economy, good for the air, and good for the ag farmers in that way.

“You’ve also balanced up the smaller refinery waivers with the farmers and RFS,” Perdue continued. “And once they fully understand what you’ve done here, they’ll be fine, and—as they see it implemented.”

After EPA released its Oct. 15 supplemental proposal, Rob Shaffer, chair of the American Soybean Association’s biodiesel and infrastructure committee, said, “Relying on DOE forecasts does not assure rural stakeholders, the markets, or investors that EPA is going to abide by the president’s intentions going forward and truly protect RFS volumes. ASA will be carefully reviewing the written proposal released by EPA. We are very concerned that this proposal does not fulfill the agreement reached between the White House, EPA, USDA, and biofuel stakeholders as it was announced [Oct. 4]. ASA will not support any attempt by EPA to undermine the president’s commitments, which we continue to appreciate.”

In response to the remarks from Perdue during the cabinet meeting, Trump said, “Yeah, they seem to be very happy. They deserve to be happy. They’ve gone through a lot,” in reference to farmers and discussed the ongoing trade dispute with China.

U.S. Trade Representative Robert Lighthizer said progress is being made on a trade deal with China and said the goal is to have a Phase 1 deal done by the time Trump travels to Chile in mid-November.

A transcript of the cabinet meeting is available on the White House website. The White House also uploaded a video recording of the meeting to its YouTube channel.