Trump’s E15 announcement to spark Hill backlash

Source: By Marc Heller, E&E News reporter • Posted: Tuesday, October 9, 2018

President Trump’s decision to promote higher-ethanol fuel is about to recharge debate over the issue in Congress — and bring on opposition from some members of his own party.

Trump today will direct EPA to seek year-round sales of E15 fuel, a monthslong process that ensures the debate over ethanol mandates will heat up for the midterm elections and drag into the next Congress. The fuel could be available next summer, when it previously hasn’t been allowed, officials said.

Trump “has long thought this was a good idea,” a senior White House official said on a conference call with reporters yesterday.

The new policy would be coupled with measures to change how renewable fuel credits are marketed and regulated — a move that officials said is intended to stabilize that aspect of the renewable fuel standard.

It’s unlikely, however, that the changes for the credits, such as limiting market participants and increasing transparency, will satisfy petroleum interests and their advocates in Congress or head off a lawsuit to block expanded E15 offerings, a petroleum industry source said yesterday.

Leading the opposition are lawmakers such as Senate Environment and Public Works Chairman John Barrasso (R-Wyo.), who co-signed a letter to Trump on Thursday urging against the move.

“A one-sided approach to addressing concerns related to the renewable fuel standard that favors only one industry is misguided,” wrote Barrasso and 19 other senators.

“We are concerned that doing so would do nothing to address the policies impacting refinery jobs, could hurt millions of consumers whose vehicles and equipment are not compatible with higher ethanol blended gasoline, and risk worsening air quality,” they wrote.

Several Democrats signed as well, including Sens. Ben Cardin of Maryland, Bob Menendez of New Jersey and Tom Udall of Colorado.

Industry groups, meanwhile, resurrected their well-established positions on the issue, which have been percolating for several years as a top priority for the ethanol industry.

“We thank President Trump for formally initiating the process to eliminate this antiquated, red-tape-laden regulation and look forward to the full resolution of this issue before next summer’s driving season,” said Geoff Cooper, president and CEO of the Renewable Fuels Association, a trade group.

Growth Energy, an ethanol trade group, said year-round sales of E15 could generate demand for 2 billion bushels of corn, reflecting the issue’s resonance in rural areas.

An official on the call acknowledged that court challenges could come from the petroleum industry but that if legal action follows, “We’re confident of our position.”

Regulations tied to ethanol are part of the Clean Air Act. Barrasso and other lawmakers said EPA has previously determined the CAA doesn’t give it authority to expand E15 availability.

In their letter, the lawmakers didn’t specifically say legislation would be required to sell E15 in the summer, although industry sources say that would likely be the point of any lawsuit. Multiple bills to end or limit the RFS, or to extend E15 availability, have been introduced in recent sessions of Congress, none having momentum to advance far.

It’s an open question, as well, whether the waiver of seasonal restrictions would go into effect next year if the regulations are stuck in court.

Officials said the changes contemplated for the renewable fuels credit market include allowing only parties obligated to meet biofuel blending requirements to buy certain credits and increasing public disclosure of market participants — but details haven’t been settled.

“None of these are baked yet,” the official said.

Petroleum industry sources, such as the American Petroleum Institute, have said they’d rather see a more ambitious trade-off for any E15 waiver, such as sunsetting the renewable fuels standard after 2022.