Critic of ethanol mandate joins renewable fuels trade group

Source: Marc Heller, E&E News reporter • Posted: Tuesday, November 29, 2016

A subsidiary of Valero Energy Corp. — one of the biggest critics of the federal ethanol mandate — is joining one of the largest trade associations fighting for the mandate’s survival.

Valero Renewable Fuels Co. LLC has joined the Renewable Fuels Association, the organizations said today, illustrating the cross-industry relationships that can shape lobbying on renewable fuels policy.

Valero Renewables owns and operates 11 corn ethanol plants in seven states and is the third largest ethanol producer in the country. Its parent company, grounded in the petroleum business and publicly traded, doesn’t support key elements of the renewable fuel standard, however, including placing the responsibility for renewable volumes on refiners rather than fuel blenders.

Both companies are based in San Antonio. In a business that puts high value on big-company memberships, Valero becomes one of the biggest names on the RFA’s dues-paying roster. Valero Renewables, like other members, will have one vote on the board of directors, an RFA spokeswoman said.

“Valero complements RFA as we advocate for continued growth and use of renewables,” said Mick Henderson, chairman and CEO of the RFA, in a news release. “Through its vast ethanol plant footprint in the United States, Valero provides countless benefits to consumers by helping to clean the air, increase energy independence and boost local economies.”

In a news release, Valero Vice President of Renewable Fuels Martin Parrish said, “Joining RFA provides a strong conduit to support our operations, especially as we cooperatively work to promote renewables, grow our ethanol market and provide opportunities to further strengthen the nation’s liquid fuel sector.”

U.S. EPA announced fuel blending levels for 2017 last week (Greenwire, Nov. 23). Industry groups are watching for signs of the incoming Trump administration’s commitment, counting on signals during the campaign that Trump supports renewable fuels despite skepticism about federal mandates of all sorts.

Although Valero wants EPA to switch the so-called point of obligation for the renewable fuel standard away from refiners, and the RFA prefers to leave the policy unchanged, the RFA isn’t about to change its position, said the association’s president and CEO, Bob Dinneen.

Valero’s lack of enthusiastic support for the expansion of E-15 fuel has irked ethanol advocates who want to see more E-15 offerings. But the company isn’t against E-15, Dinneen said. E-15 is a gasoline mix with 15 percent ethanol.

“They really want that point of obligation resolved,” Dinneen said.

While Valero Renewables is a subsidiary, it doesn’t lobby separately from its parent corporation, and Valero Energy’s lack of support for policies that would boost production of E-15 suggests Valero and the RFA may make odd partners, said a leader of one pro-ethanol organization.

“What that tells you is they’re not displacing their legacy product,” he said.