White House drops plan to bail out oil refiners denied biofuel waivers: sources

Source: By Stephanie Kelly, Reuters • Posted: Tuesday, September 22, 2020

NEW YORK (Reuters) – The White House has dropped a plan to provide funds from the U.S. Department of Agriculture to oil refiners that are denied exemptions from the nation’s biofuel regulations, according to two sources familiar with the matter.

The Trump administration was considering doling out at least $300 million in cash to the facilities, potentially from the USDA’s Commodity Credit Corporation, triggering an outcry from Midwest lawmakers who argued the money should be used for farmers, not the oil industry, Reuters previously reported.

The oil refining industry had also expressed opposition to the plan, saying the administration should instead reform the nation’s biofuel policy, the Renewable Fuel Standard (RFS), which requires that refiners blend biofuels into their fuel mix or buy credits from those that do. The RFS has helped farmers by creating a huge market for corn-based ethanol, but refiners say the regulation costs them a fortune.

Under the RFS, small refiners that can prove compliance would cause financial harm can apply for exemptions. The Trump administration is considering exemption requests covering the 2019 compliance year, and is under pressure to reject them because of a court ruling earlier this year that cast doubt over the legitimacy of the waiver program.

The Trump administration had previously ramped up the number of exemptions given to refiners each year, angering biofuel producers and farmers who say the waivers dent demand for their products.

Reporting by Stephanie Kelly; Writing by Richard Valdmanis; Editing by Christian Schmollinger and Leslie Adler