Trump Orders Review of Controversial Biofuel Waiver Program: Sources

June 21, 2019

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by Jarrett Renshaw (Reuters) U.S. President Donald Trump has directed members of his Cabinet to review the administration’s expanded use of waivers exempting small refineries from the nation’s biofuel policy, after hearing from farmers angry about the issue during his recent Midwest tour, according to three sources familiar with the matter.

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The sources said Trump, upon returning from his trip, asked the heads of the EPA and the U.S. Department of Agriculture to find solutions to address the farmers’ concerns. They said the EPA is now considering limiting use of the waivers or forcing larger refiners to make up for the exempted gallons - or a combination of both.

“I think Trump realized he may have a political problem and told (EPA Administrator Andrew) Wheeler to fix it,” said one of the sources, a refining industry lobbyist who was briefed on the matter and asked not to be named.

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Any move to alter the small refinery waiver program would face resistance from the oil industry, already stung by the administration’s expansion of E15 sales.

They view the government support for biofuels as a competitive threat to petroleum, and argue that the waiver program is now being run as Congress intended.

“The president has made promises to refiners, too. He promised to keep refineries competitive and he made promises to keep regulatory costs down, and we hope he keeps those promises,” said, Derrick Morgan, senior vice president of the refining trade group American Fuel and Petrochemical Manufacturers.

Trump's expansion of the waiver program has become an unlikely talking point for several Democrats here vying to defeat him in the 2020 presidential election, including Senators Amy Klobuchar and Elizabeth Warren, who believe it can help turn farmers already stung by the trade wars against him. READ MORE

Trump's Iowa Visit Jolts Biofuel Credits as Waivers May Decline (Bloomberg)

On Ethanol, Big Corn Beats Big Oil (Wall Street Journal)

Biofuel Interests Increase Pressure to End Waivers (Energy.AgWired.com)

Farmers Appeal to Trump With Fox Ads to Fight Ethanol Waivers (NewsMax)

TRUMP ORDERS RFS EXEMPTIONS REVIEW: (Politico's Morning Energy)

King Corn Continues To Bite Trump’s Hand After Being Fed (Hot Air)

Focus on Biofuels Continues (DTN Progressive Farmer)

TRUMP RETHINKS REFINERY WAIVERS AFTER PUSHBACK FROM FARMERS, DEMOCRATS (Iowa Starting Line)

Corn at the Pump: Ethanol forever, because there’s really no way to get around its powerful interests. (The American Spectator)

Perdue Highlights Farmer Aid: At Tractor Ride, Ag Secretary Discusses Prevented Planting Coverage, Ethanol Policy (DTN The Progressive Farmer)

Hardship waivers will undo E15 gains: Year-around E15 is a big plus, but oil refinery waivers dampen potential demand for ethanol. (Wallace's Farmer)

Agriculture Department follows EPA, allows for sale of E15 during summer months (Missouri Times)

RFS Waivers for Small Refineries Have Not Reduced Ethanol Demand (American Fuel & Petrochemical Manufacturers)

Letter: End EPA exemptions to Big Oil (Telegraph Herald)

EPA updates SRE data, 38 SRE applications now pending for 2018 (Ethanol Producer Magazine)

EDITORIAL:Trump takes on crony capitalists (The Gazette/Washington Examiner)

Editorial: Trump's EPA stands up for consumers and freedom by standing up to the ethanol lobby (Washington Examiner)

Excerpt from Politico's Morning Energy: TRUMP ORDERS RFS EXEMPTIONS REVIEW:Trump has ordered (EPA Administrator Andrew) Wheeler and Agriculture Secretary Sonny Perdue to come up with a new approach to small refiner exemptions, refining and ethanol industry sources told ME. The move comes after Trump's visit earlier this month to Iowa, where Trump likely expected "roses to be thrown at his feet" after he expanded sales of 15 percent ethanol, one refining industry source said.

Instead, he took a beating from farmers furious about EPA's increase in refiner exemptions, which have removed billions of gallons from the mandate. Trump's demand is creating turmoil at EPA, one source said, which is considering over 40 exemption applications from 2018 requirements. News of the order was first reported by Reuters.

Rumors abound on how the agencies will work out a solution, ranging from reallocating gallons lost to the mandate from the exemptions, to issuing partial exemptions, to cutting down the number of exemptions granted. Trump's demand may also be holding up progress on the 2020 blending requirements rule and the rule to reset volumes for the next three years, both of which are at the Office of Management and Budget for review.

Refiners are hopping mad at the turn of events, telling ME that Trump's staff have for months given assurances that the administration would do everything to keep RFS compliance costs down. Any of the actions under consideration would likely have the opposite effect. "This would be a complete betrayal that he went down this road," one refining industry source said. READ MORE