Third Time's Not a Charm as Trump Tries to Craft a Biofuel Fix
(Bloomberg) -- President Donald Trump found out how difficult it is to bridge the competing interests of ethanol producers and oil refiners as a third White House biofuel meeting in four days ended with no agreement on how to change U.S. policies.
Trump has been trying to address complaints from refiners who say the U.S. biofuel mandate -- the Renewable Fuel Standard -- is too costly, without alienating another key constituency: corn farmers and ethanol producers who helped elect him president.
Each side was represented in a one-hour discussion on Thursday, but they left with no breakthrough -- only a commitment to keep talking and the parameters of a potential solution, said three people familiar with the talks who asked not to be named to describe the meeting, which was closed to the press.
Participants discussed a possible policy change that would effectively cap the price of the compliance credits refiners use to prove they have fulfilled annual biofuel quotas, in exchange for an environmental waiver to allow year-round sales of E15 gasoline, containing 15 percent ethanol.
Compliance credits tracking 2018 ethanol targets plunged 13 percent to 55 cents each after the meeting, according to broker data compiled by Bloomberg.
Trump floated the idea of the Environmental Protection Agency selling ethanol waiver credits for two years at 10 cents in exchange for the E15 policy change that could expand the domestic market for ethanol.
Senator Chuck Grassley, a Republican from Iowa, the top U.S. corn growing and ethanol-producing state, tweeted after the meeting about what he called an “emerging solution.”
A “true win-win” is selling E15 year-round, a change that would lower refiners’ compliance costs while also helping farmers squeezed by low corn prices, Grassley said on Twitter.
Participants in Thursday’s gathering included the same Republican senators who met with Trump on the issue Tuesday: Ted Cruz of Texas, Pat Toomey of Pennsylvania, and Grassley and Joni Ernst of Iowa.
Economic Impacts Debated
But the focus was on 11 industry representatives who came to spell out the economic consequences of potential biofuel policy changes, including the chief executives of biofuel producers Poet, Green Plains Inc. and Renewable Energy Group Inc. and oil refiners Valero Energy Corp., PBF Energy Inc. and Delta Air Lines Inc.’s Monroe Energy LLC.
Bill Horan, a farmer with Western Iowa Energy LLC, and United Steelworkers President Ryan O’Callaghan also participated.
Tom Nimbley, chief executive of New Jersey-based refiner PBF Energy Inc., termed the conversation “productive.”
“We will continue to work with the president, senators and all stakeholders that can provide important reforms that are a win for farmers and a win for union refinery workers,” Nimbley said in an emailed statement.
But Jeff Broin, chief executive of ethanol producer Poet LLC, who also participated in Thursday’s gathering, said “nothing new was discussed.”
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