Biofuel groups send letter to Trump defending ethanol credits

Source: BY MIRANDA GREEN , The Hill • Posted: Thursday, March 8, 2018

The leaders of 150 American biofuel companies sent a letter to President Trump on Wednesday urging him to support the current Renewable Fuel Standard (RFS) and the supplemental use of ethanol credits.

The letter from the groups warns Trump that changes to the RFS and the Renewable Identification Number (RIN) system would negatively impact ethanol and biofuel producers.

“Like hundreds of thousands of others across the country, our jobs and those of our coworkers depend on the RFS, which ensures that American-made biofuels cannot be locked out of the marketplace by monopolies at the fuel pump,” the letter read.

The companies called out Sen. Ted Cruz (R-Texas), who has played a key role in the debate over whether to make changes to the current RFS and supported the position of oil and natural gas industries in a recent meeting with the president.

“We’ve seen Texas Senator Ted Cruz attempt to confuse stakeholders about the RFS, claiming that his attack on Renewable Identification Numbers (RINs) is not an attack on our jobs. Nothing could be further from the truth,” the letter said.

“There is no way to cut, cap, or eliminate RINs without cutting, capping, or eliminating gallons of homegrown fuel.”

Cruz and Sen. Pat Toomey (R-Pa.) voiced support for the fossil fuel industry at a White House meeting with the president last week. Cruz specifically argued in favor of a cap on the RIN system, which he argued would keep prices on biofuel credits down.

Sens. Joni Ernst (R) and Chuck Grassley (R), who represent the farm state of Iowa, spoke in support of the biofuel industry and against a cap.

Despite the highly publicized meeting between the four GOP senators, Trump, Environmental Protection Agency (EPA) Administrator Scott Pruitt and Agriculture Secretary Perdue, no agreement was reached.

In their letter Wednesday, the biofuel groups echoed similar arguments as Grassley and Ernst, arguing it was false to blame the bankruptcy of one company — Philadelphia Energy Solutions — on the success of the RIN system.

Philadelphia Energy Solutions owns the largest East Coast refinery and announced bankruptcy in January.

“To justify regulatory handouts for an entire sector, Senator Cruz has attempted to hijack a conversation about one mismanaged refinery. But there is no truth behind the notion that this White House must choose between rural jobs and strong refining revenues,” the groups stated in their letter.

Instead, the biofuel companies floated another “win-win” approach for Trump to consider: lifting a rule that prevents the sale of a certain ethanol blend in summer months. The current sale is restricted due to its negative effects on air quality during warmer months.

“A true win-win proposal would lift summertime restrictions on the sales of 15 percent ethanol blends. This minor change would support growth on all sides, generate a new supply of RINs, and ease pressure on refiners,” the letter states.

But they argue that their request would not work hand-in-hand with Cruz’s position.

“This proposal holds no value if it becomes tied to destructive RIN caps that eliminate market access for biofuels.”