Larry Kudlow Hatches New Plan to Boost Biofuel Mandates

by Jennifer Jacobs, Jennifer A. Dlouhy and Mario Parker (Bloomberg News/Transport Topics) White House economic adviser Larry Kudlow is developing a new plan to bolster biofuel-blending requirements after ethanol allies in politically important farm states complained the current proposal doesn’t do enough to compensate for waivers exempting some small refineries from the mandates.

Kudlow’s involvement was described by five people familiar with the matter who asked not to be named discussing the administration’s private deliberations. The effort comes after biofuel producers, corn farmers and Midwest politicians blasted the Environmental Protection Agency’s current approach as inadequate, saying it flouted the terms of an Oct. 1 agreement to raise biofuel-blending requirements enough to fully offset refinery exemptions.

Kudlow, who has been spearheading work on the issue in the White House for months, is now working with EPA officials to develop the new methodology, according to one of the people familiar with the matter. READ MORE

Excerpt from Reuters/Financial Post: The Trump administration believes it can assuage farmer anger over its biofuels policy by agreeing to use more partial waivers for oil refineries, signaling a potential solution to a protracted battle between Big Corn and Big Oil, two key political constituencies in next year’s presidential election, according to three sources familiar with the matter.

President Donald Trump has endorsed the use of partial exemptions as a solution to the issue going forward, one of the sources said, instead of consistently issuing waivers that free refiners from 100% of their biofuel blending obligations. It is unclear if the support for the use of partial exemptions would be made official through rule making.

The U.S. Environmental Protection Agency has delivered its proposal for 2020 blending requirements to the White House Office of Management and Budget, an EPA official said on Friday. That proposal is “similar” to the plan the agency unveiled in October, the official said.

But it is possible that changes could be made before the proposal becomes final. The proposal now must go through an interagency review process, where tweaks could be made. READ MORE