The President Ready to Make Decision on RFS

Source: By Tyne Morgan, US Farm Report • Posted: Tuesday, May 8, 2018

As four senators prepare to meet at the White House regarding the Renewable Fuels Standard (RFS), agriculture is concerned of a possible cap on Renewable Identification Number (RIN) prices.

Four Senators are expected to attend the meeting, including Senator Charles Grassley (R-IA) and Senator Ted Cruz (R-TX). Both Grassley and Cruz have been vocal about support and opposition respectively of renewable fuels, meeting at the White House over the issue at least two times prior to this week.

Ray Starling serves as the special assistant to the president on agriculture and agricultural trade. He told U.S. Farm Report’s Tyne Morgan that while he doesn’t want to predict an outcome of this week’s meeting, he says the president is ready to put the issue to rest.

“I think the president is ready to make a decision about this,” said Starling. “I think we are at a point where we have all of the information. I think both sides have made their interest in this clear. And I do think it’s a healthy conversation to bring to an end.”

Starling said part of the reason the administration is ready to move on is because of the mounting concerns for U.S. agriculture regarding the outcome of trade issues, but says he wants to reassure corn farmers that the president has their interests in mind.

“[President Trump] understands the commitment he made,” said Starling. “He understands that we are in a place where there is some nervousness over trade. There is nervousness over our foreign policy in terms of whether we’re going to get a farm bill done on time or not. And so, he’s sensitive to those concerns.”

While Starling wasn’t ready to reveal what the RFS decision will be, others in Washington are placing bets on the outcome this week.

“The betting is that there will not be a RIN cap,” said Jim Wiesemeyer, Pro Farmer Washington Analyst. “I think pending USDA and EPA analysis will show that. It’s just hard to implement and it won’t have the impact people think.”

Randy Russell owns the Russell Group, a leading agricultural lobbying firm based in Washington D.C. He says while the president has voiced his support of allowing consumers expanded access to E15, he’s also betting against a RIN cap.

“In the end, I think the administration will support E15 during the summertime,” said Russell. “I think that’s a significant move on their part. I don’t believe we’ll end up with a RIN cap.”

Allowing E15 sales during the summer is another priority for the renewable fuels industry. Currently, selling gasoline that contains 15 percent ethanol is prohibited from June 1 to Sept. 15. While the president voiced his commitment in an April meeting with governors and lawmakers, it is unclear which body has jurisdiction to make the final decision: Congress or the administration

“As a member of the administration, I don’t ever miss an opportunity to say if Congress wants to enact something through statutes, they have a process and a way to do that,” said Starling. “But we understand the equities there are just as difficult as they are in terms of the groups that are coming to the administration and asking for help.”

Senators like Grassley are going into the meeting at the White House this week also concerned about EPA recently granting waivers to small refiners. In April, Reuters revealed that the EPA had given large oil refiners a “hardship” waiver. That waiver was historically reserved for smaller operations in danger of facing bankruptcy.

Wiesemeyer says those waivers are being used by EPA as a way to work around the volume obligations within the RFS, and the timing of the waivers is something to note.

“The use of those waivers, to such a degree that it’s so much more in number and in volume than was prior to Scott Pruitt coming into the agency,” said Wiesemeyer.

He says the waivers are now under legal scrutiny. The Advanced Biofuel Association is the first biofuel group to sue Pruitt for expempting dozens of oil refiners from having to follow the RFS.

“When you look at the law, it says you don’t even have to reassign the gallons that have been waived if you have finalized the volume requirements for that year,” he said.

Wiesemeyer points out that the EPA finalized the Renewable Volume Obligations (RVO) for 2018 in December of 2017. The waivers then soon followed.

“I don’t think that was by accident,” he said.