President Trump could meet with oil and ethanol industry officials as early as Thursday, as the White House tries to resolve complaints about the federal requirement to blend biofuels into gasoline and diesel fuel. There was no agreement during a head-to-head session with four Republican senators at the center of the dispute, so the White House will “continue having conversations,” said press secretary Sarah Sanders.
“Look, the president knows that there are a lot of differing views on this issue,” Sanders told reporters. “We’re going to continue having conversations.” Trump requested a meeting with oil and ethanol leaders after the stand-off among senators. They hashed out ideas that were rejected in recent months.
In a step that was coordinated with the White House meeting, the Senate confirmed, by voice vote, Bill Northey of Iowa to be the No. 3 USDA official. Texas Sen. Ted Cruz, who took part in the White House meeting, had blocked action on the nomination for four months as leverage in the fight over the Renewable Fuel Standard. Also at the White House were Senators Chuck Grassley and Joni Ernst of Iowa and Pat Toomey of Pennsylvania.
The oil industry has cited the bankruptcy of a Philadelphia refinery as proof that the RFS is unfair. The refinery says it went broke because of large expenditures to buy credits known as Renewable Identification Numbers (RINs). Refiners have to buy the credits to comply with the RFS if they do not blend enough ethanol. Ethanol makers say RINs are not a menace. Some critics say the poor management was the cause of the Philadelphia bankruptcy.
“No deal on RFS reform was reached at the White House meeting today,” said Grassley during a tele-conference. Grassley and Ernst said they rejected Cruz’s proposal of a price cap on RINs. A price cap or a RIN waiver would remove the incentive for refiners to buy ethanol, which would destroy the market for the renewable fuel, they said. “Iowans are not going to have the wool pulled over their eyes and we made that clear” at the White House, said Ernst.
Cruz, however, said, “I believe we are close to solving the problem.” He appeared to suggest that controls on RIN prices could be coupled with approval of year-round sale of E15, a higher gasoline-to-ethanol blend than the traditional 10 percent ethanol. At present, the EPA does not allows E15 to be sold during the summer.
After the Thursday meeting, said Cruz, “I believe we are likely to arrive upon a win-win solution that (1) 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 (2) expands the potential market for ethanol, allowing corn farmers to sell substantially more corn each year.”
Grassley said he suggested steps that included year-round E15, EPA action to keep speculators out of the RIN market and revival of a USDA program that helped pay for installation of pumps that can sell multiple grades of ethanol.
The administration gave no guarantees at the meeting that it would not intervene on its own to modify the RFS, said the senators. Except for a brief alliance in 2005, the oil industry has pushed for elimination of ethanol incentives since the home-grown fuel came into large-scale production three decades ago, said Grassley. “I would not expect Sen Cruz to back off on any subject,” he said, once the Texan has sunk his teeth into it.
“We’re going to be fighting this out,” said Ernst.
Trump won the rural vote by large margins in 2016 with a platform of tax reform, regulatory relief and support for ethanol. He quashed proposals last fall to weaken the RFS.