U.S. oil refiners push for biofuels overhaul at White House

Source: By Chris Prentice, Reuters • Posted: Monday, March 27, 2017

U.S. oil refining executives met with a senior official in President Donald Trump’s administration at the White House last week to argue their position for an overhaul of the nation’s biofuels program, two people in the meeting told Reuters.

While it is not unusual for the White House to meet with stakeholders on key issues, the meeting is a sign the Trump administration is actively considering possible changes to the wide-reaching program.

Executives from Valero Energy Corp, Delta Airlines’ refiner Monroe Energy, CVR Energy Inc. and several others met with Michael Catanzaro, Trump’s senior energy policy aide, on March 16, the two attendees said.

The executives argued that Trump should change the Renewable Fuel Standard (RFS) program to lift the onus of blending biofuels into gasoline away from refiners, placing it instead further down the supply chain to gasoline marketers. They said the program was costing the oil refining industry money and jobs.

“The policy needs to adapt to a changing market,” said Roy Houseman, a legislative representative for the United Steelworkers union, who was in the meeting. “We wanted to highlight the larger issue: We represent 30,000 workers in the refining industry.”

It was not clear who initiated the meeting.

The RFS, a 2005 policy ushered in by former Republican President George W. Bush, requires that energy companies use increasing volumes of biofuels like ethanol each year with gasoline and diesel. It was designed to boost the use of ethanol and other renewables in gasoline and diesel in a bid to reduce U.S. dependence on foreign oil and cut greenhouse gas emissions.

The policy is a boon for the agriculture industry, particularly corn growers that produce the feedstock for biofuels like ethanol, but some independent oil refiners have said it is threatening their operations.

The debate over shifting the point of obligation for blending fuels intensified in recent weeks after Trump’s informal adviser on regulatory issues, billionaire Carl Icahn, said in February that he believed Trump would issue an order revamping the biofuels policy. The White House has denied that any executive order on biofuels is in the works.

Icahn owns a majority stake in CVR Energy.

Bill Douglass, head of the Small Retailers Coalition, who was also at the meeting, said Catanzaro spoke with the group for about 40 minutes and spent half that time asking how fuel retailers are being affected by the biofuels program.

Douglass, whose trade group represents small, independent petroleum retailers and convenience stores, said Catanzaro did not say what the White House was planning to do with the policy.

Catanzaro could not be reached for comment.

Other companies represented in the meeting included HollyFrontier Corp, Philadelphia Energy Solutions, PBF Energy, Douglass said.

A spokeswoman for Philadelphia Energy Solutions declined to comment while the review process is underway. Officials for the other companies did not respond to requests for comment.

Biofuels advocates, including ethanol producers and Senator Charles Grassley of Iowa – the country’s biggest corn-producing state – oppose changes to the program, saying they could overcomplicate it. Large, integrated oil companies also oppose the change, saying it would be more effective to reform or repeal the legislation.

(Reporting by Chris Prentice; Editing by Leslie Adler)