The largest of the ethanol trade groups, the Renewable Fuels Association, is out in the cold for supporting a change in the program that gives biofuels a share of the U.S. gasoline market. Fuels America, an agribusiness coalition “committed to protecting America’s Renewable Fuels Standard (RFS),” severed ties with RFA, while the second-largest ethanol group, Growth Energy, said the RFA was doing the dirty work of the oil industry.
The disarray suggested the ethanol industry is less unified than thought, despite record production in 2016 and the backing of President Trump in the bureaucratic fighting over the RFS, which is set annually by the EPA, and the perennial efforts of Big Oil to weaken or repeal RFS in Congress.
“RFA’s only objective is to expand market opportunities for ethanol,” said the group’s chief executive Bob Dinneen after the dust-up. “We will continue to work toward that goal, while continuing to protect the integrity of the RFS.” The RFA took heat for agreeing to a package that would have allowed year-round sale of E15, a higher blend of ethanol than the traditional 10 percent, while absolving refiners of responsibility for meeting targets for ethanol use. Dinneen says he was told the change in “point of obligation” would be part of an executive order so he asked for larger sales of E15. The White House quashed talk of an executive order, however.
“RFA’s largest member is an oil refiner, which would profit directly from this change,” said Growth Energy, referring to arcane but financially important “point of obligation” debate. “RFA does not represent a majority of the biofuels industry.”
Growth Energy was pointing to Valero Renewable Fuels, part of Valero Energy Corp, the world’s largest independent petroleum refiner. Valero is one of the four largest ethanol producers in the country, with 17 plants and a capacity of 1.4 billion gallons a year. Overall, RFA has 50 members and Growth Energy has 41, including POET, the second-largest ethanol producer, with 27 plants with a capacity of 1.6 billion gallons, and Green Plains, with 17 plants and annual capacity of 1.46 billion gallons a year.
The largest ethanol producer, ADM, with eight plants capable of a total 1.7 billion gallons a year, is not listed as a member of RFA or Growth Energy. It is among two dozen members of the Fuels America coalition. Other members include Monsanto, DuPont, Novozymes, the National Corn Growers Association and the Association of Equipment Makers.
Fuels America fingered Carl Icahn, an adviser to the White House and owner of a refiner, as the trouble maker. It said Icahn “sought to mislead biofuel advocates into accepting rewrites to the RFS in exchange for changes to outdated EPA regulations that limit summertime sales of ethanol … Despite our opposition, the Renewable Fuels Association (RFA) has elected to lend its support to Mr. Icahn’s efforts,” said the group, so it “has resolved to sever ties” with the RFA.