May 23, 2018, by Jarrett Renshaw
NEW YORK (Reuters) – Top officials from the U.S. Environmental Protection Agency and the departments of Energy and Agriculture plan to meet on Thursday to hammer out details of President Donald Trump’s planned changes to the nation’s biofuel laws, according to two sources familiar with the matter.
The meeting marks the latest in a string of high-level talks among Trump administration officials seeking ways to help merchant refiners like Valero Energy Corp reduce the costs of complying with the U.S. Renewable Fuel Standard without hurting farmers in the nation’s heartland.
Trump has told some lawmakers he wants to do so by expanding sales of higher-ethanol gasoline blends, counting ethanol exports toward mandated biofuels volumes and scaling back the number of waivers that the EPA can provide to small refiners to free them from the regulation – a set of proposals that includes concessions to both sides.
The White House was expected to release the plan last week but was delayed, the sources said, and Thursday’s meeting is expected to focus on hashing out any remaining legal and political obstacles to the proposals.
The meeting will include EPA Deputy Administrator Andrew Wheeler, Energy Department Deputy Secretary Dan Brouillette and Agriculture Department Deputy Secretary Stephen Censky, the sources said. Whether EPA Administrator Scott Pruitt, Agricultural Secretary Sonny Perdue or Energy Secretary Rick Perry will attend is unclear.
White House spokeswoman Kelly Love, EPA spokesman Jahan Wilcox, Agriculture Department spokesman Jake Wilkins and Energy Department spokeswoman Shaylyn Hynes did not respond to a request for comment.
The RFS requires refiners to blend increasing amounts of corn-based ethanol or other biofuels into the nation’s fuel each year, and prove compliance by handing in blending credits that can be either earned or purchased.
The regulation has created a 15 billion gallon annual market for ethanol, a major boon to the corn industry, but has also angered refiners, which say that the policy costs them hundreds of millions of dollars a year.
In recent months, the EPA has granted more than two dozen exemptions from the regulation to small refineries to help the refining industry cope with the costs – about triple the typical level under past administrations – infuriating the corn lobby which claims the waivers hurt ethanol demand.
Cutting the waiver program back is a key demand of the biofuels industry.
The proposal to allow ethanol exports to qualify for credits under the RFS, meanwhile, has been welcomed by refiners as a means of reducing compliance costs but has drawn criticism from the powerful corn lobby, which fears that it amounts to a subsidy and will trigger a trade war.
Conversely, expanding the sales of higher-ethanol blends of gasoline known as E15 during the summer months is seen as a big win for the biofuel industry and a setback for refiners – because it will boost seasonal demand for corn and displace petroleum in Americans’ gas tanks.
Republican Senator Joni Ernst of Iowa said she was eager to see that change implemented: “Pruitt has been dragging his feet,” she said in a statement Wednesday.
Reporting By Jarrett Renshaw