President Donald Trump urged representatives from the rival oil and corn industries Thursday to break a deadlock over the future of the nation’s biofuels policy by accepting a deal involving reforms sought by both sides — one that would expand the ethanol market and lower the cost to refiners.
Trump has arranged a series of talks between King Corn and Big Oil since late last year amid rising concern in the White House over the Renewable Fuel Standard, a law requiring refiners to mix biofuels such as corn-based ethanol into their fuel.
The decade-old policy was intended both to help farmers and reduce petroleum imports, but it has increasingly divided two of Trump’s most important constituencies — farmers and oil workers.
Trump campaigned on supporting the renewable policy. Corn-state lawmakers like Sen. Chuck Grassley and Sen. Joni Ernst, both Republicans from Iowa, thought the matter was settled.
But then refining company Philadelphia Energy Solutions — in the key electoral state of Pennsylvania — in January blamed the renewable policy for its bankruptcy, and the issue was back to the front burner again.
Reuters, citing an anonymous source who attended Thursday’s meeting at the White House, reported that Trump told the gathering he supports a proposal from the refining industry to cap the price of biofuels blending credits that refiners must acquire to comply.
Prices for the credits — which refiners must either earn or, in the case of the Pennsylvania refiner, purchase — have surged, upending companies that in some cases are spending hundreds of millions on them.
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At the same time, Reuters reported, citing the same source, that Trump also expressed support for expanding sales of high-ethanol gasoline — a change long sought by ethanol advocates including Grassley.
The Environmental Protection Agency current bans the use of gasoline containing 15 percent ethanol during the summer months, a move intended to reduce ozone emissions and smog.
Trump told the gathering that the two ideas, combined, represent a “win-win” solution for the oil and corn industries, Reuters reported.
Biofuel interests in the meeting tried to persuade him to approve a waiver for E15 fuel and see if that drives down credit prices. But, Reuters reported, Trump rejected the request, saying the oil industry needed immediate changes.
The White House said talks would continue. “Today’s meeting is a part of the ongoing effort to best understand the many differing views on this issue, and the president looks forward to continuing this discussion,” a statement said.
Grassley, who attended the meeting, said afterward that it yielded an “emerging solution” but that he still opposes a credit price cap. Such a move, he said, could put “thousands of jobs in rural America” at risk.
No specific price cap was discussed at Thursday’s meeting, according to the Reuters report, but Republican Sen. Ted Cruz of Texas, who has been driving efforts to tweak the policy and who attended the meeting, has proposed limiting prices to 10 cents each.
Cruz and Republican Sen. Pat Toomey of Pennsylvania said in a statement they were “encouraged that President Trump recognizes the importance of providing relief” from the crushing costs of compliance.
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The biofuels industry had mixed reaction to the meeting, generally supporting year-round sales of high-ethanol blend gasoline but worried the proposed price cap would curtail investment in blending facilities.
“While refiners continue to ask the president to abdicate his support for the RFS, today’s meeting clearly highlighted that E15 can boost biofuel use and lower RFS credit prices without destroying the RFS,” said a statement from Monte Shaw, executive director of the Iowa Renewable Fuels Association.
Ernst, who attended the meeting, said in a statement she was “encouraged.” Like others, however, she stuck to her bargaining position.
“While no decision was reached today, I remain fully committed to protecting the RFS and will not support anything that will harm the 88,000 farms in Iowa or the 50,000 jobs tied to the renewable fuels industry,” she said.
Reuters contributed to this report.