Perdue: White House may punt RFS debate to Congress

Source: By Helena Bottemiller Evich and Eric Wolff, Politico • Posted: Wednesday, March 21, 2018

The White House is considering whether Congress is better suited to find a solution in the long-running dispute between the ethanol industry and some oil interests over the price of biofuel credits, Agriculture Secretary Sonny Perdue said Tuesday.

“I think the White House is trying to determine whether they need to make a call on a decision or allow Congress to go back and fix it,” Perdue told reporters at the National Press Club. “We’ve had some members of Congress call and say, ‘We’ve been working on this — let us have it.'”

Sen. John Cornyn (R-Texas) and Rep. John Shimkus (R-Ill.) have been toiling for over a year on a bill to overhaul the Renewable Fuel Standard. The bill is the most likely vehicle for the fixes Perdue referenced.

A meeting between Perdue and EPA Administrator Scott Pruitt had been scheduled for Tuesday, but Perdue suggested it had been pushed off.

“Not this week,” he said.

Still, an administration-led effort to develop a package of remedies remains in full swing. President Donald Trump has been in four meetings to settle the dispute, which has pitted Midwestern senators against Sen. Ted Cruz (R-Texas) and Sen. Pat Toomey(R-Pa.).

The list of options under discussion includes granting a Clean Air Act waiver to allow year-round sale of gasoline blended with 15 percent ethanol. Another possibility that may help out refineries would be finding a way to lower the cost of biofuel credits known as Renewable Identification Numbers. Refiners can buy RINs if they can’t blend enough biofuels into the gas they sell.

One idea to cut refiners’ costs that has been floated is to multiply the number of RINs available on the market. Another would be to set a cap on the prices of those biofuel credits. The biofuel industry prefers the RINs multiplier idea and adamantly opposed the cap on prices, even if the cap is triggered only by certain circumstances.

Shimkus, however, has been trying to dissuade making regulatory changes to the program in an effort to protect his and Cornyn’s work, a spokesman said.

“Shimkus has contacted staff and officials at the White House, USDA, and EPA to say that any administrative changes to the RFS at this time would be counterproductive to legislative efforts to reform the program,” Jordan Haverly, a Shimkus spokesman, said in an email.

The text of the Cornyn and Shimkus bill has been kept tightly under wraps. Interest group representatives who have seen parts of it remain mum, though it is rumored to include a national octane standard, and possibly a new kind of RIN for sales of high ethanol blends of gasoline.

While no one is pledging support for the bill sight unseen, both oil and biofuel groups have praised the lawmakers for conducting the discussions in good faith by being open to input from all sides.

Meanwhile, the White House has tried to balance the needs of biofuel producers with those of some independent refiners, who say the high price of RINs makes complying with the Renewable Fuel Standard too costly. Pressure on the White House increased after refiner Philadelphia Energy Solutions declared bankruptcy earlier this year and blamed the program for its insolvency. Midwestern farmers and Pennsylvania refiners make up two crucial parts of Trump’s base, and any decision he makes risks alienating both.

Sen. Chuck Grassley (R-Iowa), who has been involved with the White House talks, told reporters Tuesday that he remained concerned about the outcome of the administration’s negotiations. Grassley met with Trump and oil and biofuel executives March 1, though it’s possible he’s spoken with the president since then.

“I went away from the meeting with the feeling the president doesn’t really understand the damage a cap on RINs will do,” Grassley said. “I’m very fearful and hope he will take a look at the alternatives. Anything is better than a RINs cap.”

Perdue was asked whether he was concerned that Trump might end up favoring a seemingly simple solution like a cap on RINs prices.

“We hope that’s not the case,” Perdue said Tuesday. “We’ve impressed upon him that simple is good in some things, but not good in others. I don’t know that the president will make that choice.”

He added: “This is a complex issue that I think needs a reasonable solution that doesn’t include a RINs cap.”

Liz Crampton contributed to this report.