U.S. Midwest Lawmakers Will Consider Biofuel Changes to Help Refiners

by Jarrett Renshaw (Reuters) U.S. lawmakers from states that produce corn for ethanol plants said on Wednesday they would consider proposals from Senator Ted Cruz of Texas to help the oil refining industry cope with the nation’s biofuels regulation, but would never agree on anything that diminishes the program.

The price of U.S. renewable fuel credits sunk to their lowest levels in two months amid ongoing efforts by President Donald Trump’s administration to mediate talks between the rival oil and corn industries over the Renewable Fuels Program.

Representatives of both sides gathered on Wednesday at the White House and it was agreed that Cruz would circulate proposals to corn-state lawmakers in the weeks ahead that could help oil refining companies meet the RFS, according to the offices of Iowa Republican Senators Chuck Grassley and Joni Ernst.

The meeting on Wednesday included staff from the offices of Cruz and Republican Pat Toomey of Pennsylvania, both representing the oil-refining industry. On the corn side, staff attended from the offices of Grassley, Ernst and Deb Fischer of Nebraska. Officials from the White House, the U.S. Environmental Protection Agency and the U.S. Department of Agriculture also attended.

Prices of renewable fuel (D6) credits were traded at roughly 74 cents on Wednesday, its lowest levels since early October, according to traders and Oil Price Information Service. The credits were trading at 90 cents each at the end of November. READ MORE

Excerpts from Politico's Morning Energy-1: Sen. Ted Cruz confirmed to ME he still has hold in place on Bill Northey, the nominee to be USDA undersecretary for farm production and conservation, but touted “real progress towards a productive solution” that balances the needs of ethanol sector with oil refiners struggling with high compliance costs under the Renewable Fuel Standard. ...

One Senate GOP aide said Cruz's staff said they want to reduce the price of biofuel credits but did not offer any "win-win" proposals to do so. Cruz is expected to propose a cap on RIN prices, but that's an idea that RFS defenders say would run afoul of the law's intent, according to the aide.

A spokesman for RFS champ Grassley after Wednesday’s White House meeting: “The next step is for Sen. Cruz to circulate specific proposals for consideration. The integrity of the RFS is Sen. Grassley’s priority and there was an understanding expressed broadly in the meeting that any outcome can’t undermine the integrity of the RFS.” And Sen. Joni Ernst's office said: "While we are happy to review any proposals Senator Cruz offers in the time ahead, we remain firm that our top priority in these meetings is ensuring that the spirit and the letter of the RFS is supported as intended by Congress." READ MORE

Excerpts from Politico's Morning Energy-2: Iowa Sen. Chuck Grassley declined several times to state whether he thought an agreement was possible between pro-ethanol backers and refinery supporters on the Renewable Fuel Standard, insisting he needed to see policy proposals from Sen. Ted Cruz's staff first. "All I can say is we're having discussions," he told reporters. "We were told that there's a plan where everybody can win and I want to see it on paper." READ MORE

Excerpt from DTN The Progressive Farmer: And, following a meeting Wednesday with staff from several senators at the White House's Eisenhower Executive Office Building, it seems Cruz doesn't know what exactly he wants changed with the Renewable Fuel Standard.

"He just keeps moving the goalpost and moving the goalpost," said a frustrated Sen. Joni Ernst, R-Iowa, on Thursday.

Staff from the offices of Sens. Ernst, Charles Grassley, R-Iowa, and Deb Fischer, R-Neb., joined White House staff Wednesday afternoon to discuss options, but staff from Cruz's office and Sen. Pat Toomey, R-Pa., did not have any proposals to offer and were not ready to negotiate. READ MORE

Excerpt from Washington Examiner: “There already is a solution to all of the issues being discussed in this meeting," said Emily Skor, the group's (Growth Energy's) CEO.

The solution is called "RVP relief," she explained, referring to the industry's call for legislation to be passed changing EPA's restrictions on Reid Vapor Pressure for 15 percent gasoline-to-ethanol fuel blends that would allow the sale of more ethanol at the pump.

"Blending more ethanol is what lowers RIN [credit] prices," Skor said. "RVP relief would immediately add another three month’s worth of E15 sales to the market. That’s how the RFS is meant to work."

"This commonsense solution is a win for consumers, farmers, and refiners," and President Trump’s "rock solid support for the RFS has helped to turn around three straight years of falling farm income under the previous administration."

"If Mr. Cruz and his coalition are unwilling to consider this obvious solution, these meetings are nothing more than a charade to get his name in headlines,” she said. READ MORE