Talks on future of ethanol mandate end with an ultimatum

Source: By John Siciliano, Washington Examiner • Posted: Friday, December 15, 2017

The second round of White House-brokered talks on the future of the nation’s renewable fuel program ended Wednesday with a warning from the corn ethanol camp who said no solution can be reached if it means undermining the Renewable Fuel Standard.

The meeting took place at the Eisenhower Executive Office Building next to the White House between the pro-ethanol team led by Iowa Republican Sen. Chuck Grassley’s staff and the pro-oil team led by Texas Republican Sen. Ted Cruz’s staff.

Grassley’s office said it was a “large meeting” that took place in the afternoon between Senate staff and White House officials, the Agriculture Department, and the Environmental Protection Agency to discuss the RFS.

The first meeting took place last week between the president and his advisers and a group of Republican senators looking to find a way for oil refiners to get around the high cost of complying with the RFS program. Currently, independent refiners must buy expensive Renewable Identification Number credits, or RINs, that places them at a strategic disadvantage.

Some refiners say they will be forced to shed hundreds of jobs if a way forward isn’t found to free them from the RIN obligation.

“The integrity of the RFS is Sen. Grassley’s priority and there was an understanding expressed broadly in the meeting that any outcome can’t undermine the integrity of the RFS,” said Grassley spokesman Michael Zona.

Zona said the whatever happens next is up to Cruz. Grassley wants to see Cruz “circulate specific proposals for consideration,” said Zona.

But the ethanol industry said the option before Cruz is obvious, according to Growth Energy, a leading ethanol advocacy group in Washington.

“There already is a solution to all of the issues being discussed in this meeting,” said Emily Skor, the group’s CEO.

The solution is called “RVP relief,” she explained, referring to the industry’s call for legislation to be passed changing EPA’s restrictions on Reid Vapor Pressure for 15 percent gasoline-to-ethanol fuel blends that would allow the sale of more ethanol at the pump.

“Blending more ethanol is what lowers RIN [credit] prices,” Skor said. “RVP relief would immediately add another three month’s worth of E15 sales to the market. That’s how the RFS is meant to work.”

E15 refers to a gasoline fuel blend that is 15 percent ethanol. Most gasoline in the U.S. is a 10 percent blend of ethanol.

“This commonsense solution is a win for consumers, farmers, and refiners,” and President Trump’s “rock solid support for the RFS has helped to turn around three straight years of falling farm income under the previous administration.”

“If Mr. Cruz and his coalition are unwilling to consider this obvious solution, these meetings are nothing more than a charade to get his name in headlines,” she said.