Pruitt weighs relief for refiners

Source: Marc Heller, E&E News reporter • Posted: Friday, December 8, 2017

U.S. EPA Administrator Scott Pruitt is weighing administrative moves his agency could make to ease the impact of costly renewable fuel credits on refiners, senators said after a meeting with Pruitt and President Trump at the White House today.

Pruitt’s willingness to consider actions to counteract high prices for renewable credits — also known as renewable identification numbers, or RINs — was one of the key takeaways from the meeting, Sen. John Cornyn (R-Texas) told reporters.

“There’s some indication that the EPA administrator could have some authority with regard to the RINs prices, which are incredibly volatile,” Cornyn said. “So I think that was kind of interesting to hear from the EPA administrator that that was something they might be able to do.”

Trump met with a handful of Republican senators from oil-producing states who have been critical of ethanol mandates. They were joined by senior White House staff, Pruitt and Agriculture Secretary Sonny Perdue.

At issue is the senators’ dissatisfaction with the federal renewable fuel standard, which requires the mixing of ethanol or other biofuels into gasoline.

Refiners are responsible for meeting the mandate, and those that don’t actually handle biofuel buy renewable fuel credits from other companies in order to meet the mandate.

Merchant refiners in particular complain RIN prices have risen so sharply in recent years that plants are in danger of closing — although a recent analysis by Wells Fargo Securities suggested the pain has lately been blunted by refiners passing the cost on to consumers (Greenwire, Dec. 5).

Cornyn and other senators didn’t elaborate on what Pruitt could do, and some said the group did not delve into specifics.

The agency has already ruled out shifting responsibility for meeting the mandate to fuel blenders, which some industry sources say would lower the cost of fuel credits (Greenwire, Nov. 27). Capping prices is another potential solution, oil sources say.

Senators said all meeting participants agreed their goal should be to help corn farmers maintain markets while preventing hardships for refineries.

They emphasized corn specifically, which is the main feedstock for ethanol, although the biofuels industry has said it’s concerned the administration isn’t doing enough to support second-generation fuels that rely on other crops.

Sen. Ted Cruz (R-Texas) told reporters that participants are seeking a compromise that protects refining jobs “and at the same time that will benefit corn farmers and indeed enable corn farmers to sell even more corn going forward in the future.”

He added, “There is a positive win-win solution that can be reached, and today’s meeting made meaningful steps toward advancing that solution.”

Cruz didn’t answer reporters’ questions about one tactic he’s using to force the issue: holding up the nomination of Iowa Agriculture Secretary Bill Northey for an undersecretary position at the Department of Agriculture. That topic came up at the meeting with Trump, Cornyn said.

Sen. James Lankford (R-Okla.) said that “there wasn’t a certain solution that was determined” and that the next step is to continue the conversation and bring pro-ethanol representatives into the mix in hope of finding common ground.

But so far, ethanol’s biggest booster in the Senate, Chuck Grassley (R-Iowa), hasn’t shown much appetite for the discussion.

Grassley wasn’t invited to the White House meeting and doesn’t see a point in a sit-down with the other side, his office has said.

The scrap has a personal side for Grassley as well, with his grandson Pat Grassley in line for the state agriculture position Northey would vacate.