White House Hosts Oil, Biofuel Talks as Trump Administration Nears Decision on Refinery Waivers

by Jarrett Renshaw (Reuters) White House meets refiners and biofuel producers over waiver disputes; Talks include year-round E15 and waiver reforms; Biofuel groups push for waived gallons to be made up

The White House this week held separate meetings with oil refiners and biofuel producers as it seeks to resolve a long-running dispute over billions of gallons of U.S. biofuel-blending requirements that were waived for small refineries, according to four sources familiar with the discussions.

The discussions signal the Trump administration is nearing a decision on whether larger refiners must make up for any of the waived gallons, a decision originally expected by the end of October but delayed by the government shutdown.

The meetings, which included trade groups representing the largest U.S. refiners and biofuel companies, also touched on ways to make gasoline containing 15% ethanol, known as E15, available year-round. The administration could package that move with reforms to the small refinery waiver program to win support from both industries, the sources said.

Biofuel groups want non-exempt refiners to make up for the full 2.18 billion RINs to prevent reduced demand for renewable fuels, while refiners oppose reallocation, saying it would raise regulatory costs. READ MORE

Excerpt from Argus Media: The American Petroleum Institute (API) is pitching the White House and biofuel groups on a total revamp of how the US exempts oil companies from a program that requires biofuel blending, according to three people familiar with the lobbying group's work.

API recently withdrew its support for a bill that would authorize 15pc ethanol gasoline (E15) year-round on its frustrations with changes to biofuel policy this year that oil companies see as too friendly to farmers and to some small refining competitors. The US for instance recently granted small oil refiners generous hardship waivers from a biofuel blend mandate and proposed requiring larger companies to blend more biofuels in future years as an offset.

API's pitch — shared at a White House meeting this week — would require that companies seeking program exemptions must show that economic hardship stems directly from the biofuel program, a more stringent requirement than today, according to two of the people familiar with the group's work. Exemptions would also be restricted to companies with limited collective refining capacity, cutting off larger enterprises like Delek and Par Pacific that own multiple small units that qualify now. Smaller companies like Ergon and Kern Oil could still request waivers, but the total pool of potentially exempted gas and diesel volumes would be far lower.

The oil group then wants the US to prohibit hiking other oil companies' blend requirements to offset those exemptions, a tougher sell to biofuel and crop groups that fear unchecked program waivers curb demand for their products. Larger merchant refiners that do not qualify for small refinery relief have also long pushed lawmakers for updates to the program and would not benefit from this proposal.

API's idea is to pass legislation pairing updates to the small refinery exemption program with year-round authorization of E15, generally prohibited in the summer without emergency waivers because of summertime fuel volatility restrictions that do not apply to typical 10pc ethanol gasoline. That's a top priority for ethanol companies, otherwise at risk from an increasingly efficient and electric light-duty vehicle fleet. Congress last year nearly passed narrower E15 legislation, which API supported at the time but no longer does without more changes.

Courts have struck down past attempts by federal officials to authorize E15 without emergency declarations and to drastically restrict biofuel exemption eligibility, likely limiting what President Donald Trump's administration can do without new legislation.

API made the pitch to the White House this week, the sources familiar with API's work said. The White House is hosting other groups for meetings on fuel policy, including another one on Thursday on E15 that featured biofuel groups. Officials from across Trump's administration, including the US Department of Agriculture, have attended.

"Administration officials hosted listening sessions with biofuel groups, agriculture and oil refiners to discuss their proposals on year-round E15", a source familiar with the matter said.

It is not clear that biofuel advocates, insistent that the Trump administration entirely offset the impact of recent refinery exemptions, are open to the attempted compromise. The ethanol group Renewable Fuels Association declined to comment on E15 talks. Regulatory tweaks to boost ethanol supply would also do little on their own to help producers of other biofuels like renewable diesel. READ MORE