Corn-State Senators Seek Trump Meeting as U.S. Biofuel Changes Loom

by Jarrett Renshaw (Reuters) A group of senators from U.S. corn states have asked President Donald Trump for a meeting about the nation’s biofuels law, amid expectations the administration will soon act to lower the regulation’s costs to the oil refining industry.

The group of Republican senators wrote a letter to Trump on Thursday in which they opposed a plan he is considering to limit the price of credits that oil refiners must acquire to comply with the Renewable Fuel Standard.

“Let there be no doubt - the consequences of a waiver would be severe and immediate across the Midwest, impacting farmers and biofuel stakeholders alike,” the senators wrote.

The letter was written by Senators Chuck Grassley and Joni Ernst, of Iowa; John Thune, of South Dakota; Roy Blunt of Missouri; and Deb Fischer of Nebraska.

Trump has not publicly commented on his plans. But he told lawmakers and industry officials in a closed-door meeting earlier this month that he supported capping the price of RFS compliance credits, known as RINs, at 10 cents each, according to a source who attended but who asked not to be named.

The credits are currently trading around 42 cents each, having fallen nearly 40 percent in recent weeks amid the political uncertainty.

In the closed-door meeting this month, Trump also supported expanding sales of high-ethanol gasoline – a tweak long-sought by ethanol producers, according to the source.

“@realDonaldTrump I want to shake up what u might be planning abt RINs cap for a short period. It will be CATASTROPHIC to ethanol,” Grassley wrote. READ MORE

Excerpts from Successful Farming: While Cruz advocated a price cap on RINs, an ethanol industry leader, Jeff Broin, drew up a different approach — a two-year period when a larger-than-usual number of RINs would be available and refiners would get extra credit for ethanol blends that exceed 10%, said DTN/Progressive Farmer. Broin also backed year-round E15 sales.

Agriculture Secretary Sonny Perdue told a farm news network that the ethanol industry and corn farmers ought “to engage” rather than stonewall over RFS, according to The Hagstrom Report. It quoted Perdue’s comments to the Red River Farm Network: “The president has an obligation to listen to all (sides), and people have told him they are losing jobs in the merchant refineries because of this. Whether it is true or not, we have to engage.” READ MORE

Excerpts from Politico's Morning Energy: Negotiations to alter the contentious biofuels program may include a trigger mechanism that would kick in to cap prices for biofuel credits, Pro's Eric Wolff reports. But the proposal is already hitting heavy resistance among corn growers and senators from big ag states. The White House has supported recent talks between refining and agricultural groups to change the Renewable Fuel Standard, and modest progress has been made in recent days, Eric writes. Participants have been discussing an EPA waiver to expand sales of 15 percent ethanol gasoline blends - a plan that would also provide an incentive for those sales by attaching a multiplier to increase the number of Renewable Identification Numbers to help lower the costs for refiners.

The new discussion around a triggered price cap is an attempt to overcome opposition to refiners' proposal for a fixed two-year price cap that was discussed at a White House meeting with President Donald Trump in February, Eric writes. "Our biggest concern right now is that there continues to be out of the White House talk about a cap on RINs," said Jon Doggett, executive vice president for the National Corn Growers Association. "And until that's off the table and that's not going to happen, all the rest of these proposals are for naught." Read more.

Speaking of RIN caps: Delaware Sen. Tom Carper sent a letter to Trump on Friday urging him to instruct the EPA to take action to stabilize price volatility in the RIN market. "As someone who has both constituents who benefit from the RFS program and constituents who work at several of the last merchant refineries along the East Coast, I understand full well the difficulty of finding common ground on this issue," Carper wrote. READ MORE