Ethanol Plant Managers Plead With Trump to Leave RFS Alone

Source: By Todd Neeley, DTN/Progressive Farmer • Posted: Thursday, March 8, 2018

Photo caption: A new study finds capping renewable identification number prices and allowing E15 year-round could hurt corn prices. (DTN file photo)

Photo caption: A new study finds capping renewable identification number prices and allowing E15 year-round could hurt corn prices. (DTN file photo)

OMAHA (DTN) — While 30 members of the United Steelworkers union and refinery representatives are in Washington to push for changes in the Renewable Fuel Standard, the managers of 150 ethanol plants across the country are pleading with President Donald Trump to leave the RFS alone.

The battle continues to rage as rumors circulate about yet another meeting at the White House possibly this week to continue talks on a potential RFS compromise. It would be the third such meeting in two weeks.

On Wednesday, ethanol plant managers urged President Trump in a letter not to cap the price of renewable identification numbers, or RINs, as doing so would lead to lost production and lost jobs in ethanol. Refiners have been calling on reform to save jobs in their industry.

Refiners, steelworkers and others are making their case with members of Congress this week to cap RIN prices.

As the back and forth continues, yet another academic study this week found that capping RINs and allowing E15 sales year-round would be a net loss for the ethanol and corn industries.

In their letter to Trump, the ethanol plant managers pushed solely for expanding E15 sales as a solution for both sides. “Refiners of all sizes are posting surging profits under the RFS — thanks, in part, to the extraordinary generosity of this administration’s tax reforms,” the managers said.

“A true win-win proposal would lift summertime restrictions on the sales of 15% ethanol blends. This minor change would support growth on all sides, generate a new supply of RINs and ease pressure on refiners. But this proposal holds no value if it becomes tied to destructive RIN caps that eliminate market access for biofuels.”

The plant managers said the administration does not have to choose between jobs in refining and jobs in ethanol, as Sen. Ted Cruz, R-Texas, has suggested.

“We’ve seen Texas Sen. Ted Cruz attempt to confuse stakeholders about the RFS, claiming that his attack on renewable identification numbers is not an attack on our jobs. Nothing could be further from the truth,” the plant managers said.

“RINs are simply a flexible and efficient system — designed with help from refiners — for tracking our product, as each gallon of biofuel makes its way to consumers. There is no way to cut, cap or eliminate RINs without cutting, capping or eliminating gallons of homegrown fuel. These gimmicks would eliminate market access for higher ethanol blends, and they are deal-killers for rural America.”

The plant managers said the ethanol industry consists of the same people the president defends.

“The men and women who make up the biofuel supply chain embody values that this administration has championed from day one — middle-class prosperity, U.S. independence, and world-class innovation,” they said.

“In fact, the department of energy reports that nearly one in five employees in our industry are military veterans, a larger share than any other energy sector. These aren’t just the workers at our plants. They are the hard-working farmers who grow the grains and cellulosic feedstocks for U.S. ethanol. They are the construction trades men and women who build biorefineries in areas of the country left behind by other manufacturing sectors. They are seafarers and truckers who ship farm crops by land and barge. And they are the manufacturing workers who create equipment and agricultural implements to harvest, transport, process and distribute America’s vast abundance of renewable energy.”


United Steelworkers union members are meeting with senators and representatives this week, making the case the RIN system threatens “thousands of family supporting, community-sustaining jobs,” USW said in a news release.

USW National Oil Bargaining Chairman Kim Nibarger said in a statement that refiners are “forced to purchase RINs at artificially inflated prices because they lack the size and infrastructure to blend ethanol into their gasoline.”

“Although the multi-billion-dollar ethanol industry and its powerful lobbyists are determined to prove otherwise,” he said, “our laws are not intended to guarantee profits for RIN traders.”

Employees from the now-bankrupt Philadelphia Energy Solutions, as well as from Monroe Energy refineries near Philadelphia, are in Washington this week, along with refinery workers from other companies.

In addition, the Fueling American Jobs Coalition, which consists of union workers, mom-and-pop gas station owners, small retailers and independent American oil refiners, announced it is airing a television ad titled, “Make the Deal,” on Fox News Wednesday, and will be placing an ad in the Washington Post.

This week, the Center for Agriculture and Rural Development at Iowa State University also released a policy brief,…, looking at the potential RFS changes. CARD said the proposed changes would be harmful to both corn and ethanol.

A possible compromise emerged last week during a meeting at the White House with officials and lawmakers representing both sides of the RFS debate. That included allowing year-round E15 sales along with a cap on D6 ethanol RIN prices between 10 cents and 20 cents.

CARD said year-round E15 sales would encourage retailers to sell the fuel, but capping the D6 RIN prices would reduce consumption of E15 and E85. In addition, the study said the effective corn ethanol mandate would fall from 15 billion gallons to about 14.3 billion gallons in 2018.

“Unless increased ethanol exports compensate for the reduced mandate, corn prices would decrease under the proposal’s D6 RIN price cap,” CARD said.