Trump Wades Deeper Into Biofuel Debate With Second Meeting


NEW YORK, March 1 (Reuters) - U.S. President Donald Trump on Thursday has gathered rivals from the oil and corn industries for the second time this week as the administration seeks elusive common ground on reforms to the nation's controversial biofuels law.

The meetings come amid rising concern in the White House over the current state of the U.S. Renewable Fuel Standard (RFS), a law requiring refiners to mix biofuels such as corn-based ethanol into their fuel that has increasingly divided two of Trump's most important constituencies. Philadelphia Energy Solutions (PES), a refining company in the key electoral state of Pennsylvania, last month blamed the regulation for its bankruptcy.

Republican Senators Chuck Grassley and Joni Ernst of corn-producing state Iowa, along with Republican Senators Ted Cruz and Pat Toomey of refining states Texas and Pennsylvania, were in attendance on Thursday, the White House said in a statement noting the meeting had begun.

A number of companies also will be represented. Executives from refiners Valero Energy Corp, Delta Air Lines' Monroe Energy, and PBF Energy Inc will be there along with union president Ryan O'Callahan from the bankrupt PES, the sources said. The biofuel industry will be represented by officials from major producers POET and Green Plains Inc , along with others, the sources said.

Trump will be joined by U.S. Environmental Protection Agency head Scott Pruitt and Interior Secretary Ryan Zinke, sitting in for U.S. Agriculture Secretary Sonny Perdue as he attends events in California, they said.

Cruz's office and POET confirmed attendance to Reuters. Representatives for the other parties either did not respond or declined to comment.

A smaller meeting earlier this week ended with Grassley and Ernst calling White House efforts to help refiners cope with the regulation a threat to farmers and vowing to fight proposed changes.

A refining industry executive close to the discussions said he did not expect a breakthrough at Thursday's talks either.

"This must have been what it was like to be a Texan at the Alamo looking for a back door out," he said.

"Win-Win" Elusive

Under the RFS, refiners must cover the costs of blending increasing volumes of biofuels such as ethanol into the nation's gasoline and diesel each year. To prove compliance with the program, they have to acquire credits called RINs, either earning them through blending or buying them.

The price of RINs has surged in recent years, hiking costs for refiners without blending facilities.

At Tuesday's meeting, Grassley and Ernst were asked to consider accepting a proposed ceiling on RINs prices in exchange for a concession to the ethanol industry that would allow broader sales of higher-ethanol gasoline blends.

Ahead of Thursday's meeting, Grassley's office released a January letter to the EPA seeking information and reminding the agency of its previous comments on RFS. Among other things, Grassley pointed out the EPA's previous opinion that the credits costs are captured in refining margins and do not harm refiners.

The EPA never responded to the Grassley letter, the senator said.


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