Senator Says He Would Support RFS Changes That Come From Industry Officials

Source: By Todd Neeley, DTN/Progressive Farmer • Posted: Wednesday, March 21, 2018

OMAHA (DTN) — With the future of the Renewable Fuel Standard hanging in the balance, Sen. Charles Grassley, R-Iowa, said he’s unsure whether President Donald Trump understands how capping renewable identification numbers, or RINs, would affect the agriculture and ethanol industries.

Trump is slated to meet with U.S. Secretary of Agriculture Sonny Perdue and U.S. Environmental Protection Agency Administrator Scott Pruitt on Tuesday to reportedly discuss a number of changes to the RFS.

During his weekly press conference with agriculture journalists on Tuesday, Grassley said he and four other senators who requested a meeting with the president on the RFS have not heard back from the White House.

“I have taken a position that if something out there works, I’m willing to look at that,” Grassley said, reiterating his opposition to capping RIN prices, because it would be “catastrophic” to the ethanol industry. “That’s a non-starter as far as I’m concerned.”

Grassley said he’s not opposed to backing RFS changes that come from industry officials. Based on previous meetings at the White House, however, he said he is unsure if the administration understands the RIN situation.

One of the proposals coming from a recent White House meeting is to cap RIN prices for two years as part of some deal between ethanol and oil interests that could include allowing year-round E15 sales.

In a letter sent to the president last week, Grassley, along with Sens. John Thune, R-S.D.; Roy Blunt, R-Mo.; Deb Fischer, R-Neb.; and Joni Ernst, R-Iowa, requested a meeting with Trump about the issue.

So far, numerous studies have shown that capping RINs essentially would cap the amount of ethanol in the gasoline pool at 10% or lower. In addition, Pruitt said the EPA continues to explore whether it can implement an administrative fix to allow year-round E15 sales, or whether it would need to require an act of Congress.

In addition, Jeff Broin, the founder of POET, one of the nation’s largest ethanol plant operators and developers, shared with DTN a potential proposal to multiply the number of RINs and reduce compliance costs.

A one-page document outlining the proposal says, “Merchant refiners claim that RFS compliance is too costly. A temporary two-year program could be designed to immediately multiply the number of D6 RINs, reducing compliance costs while encouraging the use of higher biofuel blends. The renewable volume obligation for conventional biofuels would remain unchanged at 15 BG (billion gallons), upholding the goal of the RFS.”

Broin’s proposal would give refiners an RIN multiplier for blending volumes above 10%, as a way to generate more RINs.

The proposal also includes a permanent waiver for E15, restoring incentives for flexible-fuel vehicles that can use up to E85 blends and pushing the minimum octane level for fuels to 91AKI (anti-knock index) level.

Growth Energy CEO Emily Skor said in a statement to DTN that both agriculture and ethanol are united against changing the RINs system.

“Our conversations across the industry and with the administration are focused on constructive solutions — like year-round sales of E15 — that would accelerate the adoption of higher ethanol blends, promote growth, and put more RINs on the market,” she said. “The biofuel and agriculture sectors, as well as our champions in the heartland and on Capitol Hill, remain adamantly opposed to any scheme that would cut, cap, or waive RINs.”

So far, other meetings between the industry and the White House have not been scheduled, Grassley said.