Major U.S. oil lobbies split over biofuel waiver debate

Source: By Stephanie Kelly, Reuters • Posted: Sunday, March 8, 2020

NEW YORK (Reuters) – U.S. oil industry associations were split on Friday over the Trump administration’s approach to biofuel policies, a rare public fracturing for the groups that more often find themselves at odds with corn growers than each other.

A major trade association representing smaller refiners welcomed the Trump Administration’s plan to appeal a federal court ruling that would curtail exemptions given to small refiners from blending biofuels into gasoline. By contrast, one of the largest U.S. oil and gas lobby groups, the American Petroleum Institute (API), criticized the move to appeal.

U.S. biofuels laws require refiners to blend billions of gallons of biofuels such as ethanol into the nation’s fuel supply, or buy the credits from those that do, but refiners that claim hardship can be exempted. In the last two years, the Trump Administration increased the number of waivers to more than 30, angering ethanol producers in the nation’s Farm Belt.

In January, the 10th U.S. Circuit Court of Appeals ruled that the U.S. Environmental Protection Agency overstepped its authority in granting some waivers because the law requires them to take the form of “extensions” after the year 2010, and none of the refineries had received them in the previous year.

After the court ruling, the administration initially planned to scale back the waiver program. However, oil-state senators including Senator Ted Cruz of Texas pushed the White House to appeal the ruling, saying the program is essential to keeping refineries afloat.

API said on Friday the Trump administration should apply the court decision nationwide, which would cut back the waivers, saying the exemptions “end up distorting the marketplace and resulting in unnecessary costs for refiners and ultimately consumers,” said Frank Macchiarola, API’s senior vice president of policy, economics and regulatory affairs.

Meanwhile, the American Fuel and Petrochemical Manufacturers (AFPM) said it would welcome the appeal.

“If left unchallenged, the case would eviscerate the hardship relief program Congress designed to protect the nation’s small refineries and the communities and thousands of jobs they support,” said Chet Thompson, President and CEO of AFPM.

API represents more integrated oil companies, while AFPM represents more merchant refiners.

Biofuels groups and farmers are also unhappy about the decision to appeal the ruling.

“To say we are frustrated and disappointed is an understatement,” said Jim Greif, president of the Iowa Corn Growers Association. “We need market assurances and access rather than the continued fight we are faced with.”

Reporting by Stephanie Kelly; Editing by Chris Reese