Pruitt Departure Allows for ‘Reset’ between Trump and Ethanol

by Mario Parker (Bloomberg) ... The EPA also jettisoned a plan to incorporate an additional 1.5 billion gallons of biofuel requirements in last week’s proposal to make up for the potential waivers granted to small refineries. The agency said that it wouldn’t be taking public comments on the issue.

‘Negotiating Room’

Pruitt made a “scorched Earth ruling on the way out the door,” Scott Irwin, an agricultural economist at the University of Illinois Urbana-Champaign, said by phone Thursday. “That may mean there is some negotiating room” now that he’s left, Irwin said.

Prices for the credits tracking ethanol targets jumped as much as 31 percent to 27.5 cents apiece on Thursday after Trump tweeted that Pruitt resigned, according to broker data compiled by Bloomberg. The gain signaled that traders see Pruitt’s departure as a door opening for the ethanol industry.

Without Pruitt, the EPA may “potentially make more sparing use of the” contested waivers, ClearView Energy Partners, said in a report Thursday.

The Fueling American Jobs Coalition, which supports the oil refiners, said in a statement Thursday that the RFS had nothing to do with Pruitt’s departure and reiterated that the EPA is following the law in issuing waivers. It also said that agriculture hasn’t been negatively impacted under the current administration.

For both fans and foes of the mandate, Wheeler will be seen as a fresh face. He doesn’t have the baggage Pruitt did from more than a year of struggling with ethanol backers and the oil-refining industry over the policy.

But fundamentally, he’s in the same difficult position as Pruitt: forced to administer a program that amounts to a zero-sum contest over gasoline market share.

Wheeler, a former energy and environmental lobbyist for Faegre Baker Daniels, is no stranger to the debate. He previously represented Growth Energy, an ethanol trade group that’s advocated for the EPA to allow year-round sales of higher blends of ethanol, according to a recusal statement from Wheeler. READ MORE

Excerpt from Reuters: Wheeler may pursue some of the similar goals, biofuels groups say, but they believe he will be more transparent and not “color outside the lines” as they claim Pruitt did.

It is unclear exactly what Wheeler’s plans are for the RFS, but during a Senate hearing in November, he said in response to questioning that he respected the program as the “law of the land.”

“No one can bank on the outcome, but a fair process is bankable with Andy Wheeler,” Brooke Coleman, head of the Advanced Biofuels Business Council, said on Friday.

Wheeler is more of a pragmatist and likely to pay more heed to the way things are typically done in Washington, said Michael McAdams, head of the Advanced Biofuels Association.

“The difference is ... Pruitt had an absolute disdain for Washington,” McAdams said. “Pruitt went behind closed doors and took an authoritative position. That’s not how Andy will operate.” READ MORE