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Biofuel Summit Ends Without Agreement
USAgNet - 02/28/2018

Donald Trump's meeting with senators warring over the future of a program designed to boost biofuels ended without a breakthrough Tuesday, prolonging a clash that could undermine the president's political appeal in Pennsylvania and Iowa.

According to Bloomberg, White House officials now plan to consult with top ethanol and oil industry leaders on Thursday, said people familiar with the discussion who asked not to be named discussing internal deliberations. But the administration is not expected to present them with a detailed plan for biofuel policy changes, after several possible options provoked discord at the session Tuesday.

The meeting illustrated growing White House concern over the Renewable Fuel Standard, a 13-year-old requirement that refiners mix biofuel, including corn-based ethanol, in gasoline and diesel. Administration officials have been weighing policy moves that could help lower oil companies' compliance costs, following the bankruptcy of the largest refiner in the Northeast.

The Renewable Fuel Standard is viewed as a zero-sum game in the nation's capital, because almost every change to benefit one stakeholder disadvantages another. It's politically fraught, pitting corn farmers in Iowa against laborers in Pennsylvania refineries. Even before the meeting, farm groups warned the White House that any move to undermine the mandate would be seen as a betrayal in the Midwest.

Grassley specifically singled out one proposal for criticism Tuesday, dismissing a plan to cap the price of compliance credits that refiners use to prove they have fulfilled annual biofuel quotas. That would destroy the RFS program, Grassley tweeted, adding that it would not represent a promised "win-win" solution and instead "would destroy ethanol demand."

Besides Grassley, the other Republican senators meeting with Trump on Tuesday included Joni Ernst of Iowa, Ted Cruz of Texas and Pat Toomey of Pennsylvania. While Ernst and Grassley have fought proposals they see as weakening the biofuel mandate, Cruz and Toomey have argued the current policy threatens the viability of refiners, reports Bloomberg.

Renewable identification numbers tracking 2018 ethanol consumption rose 3.4 percent to 61 cents apiece according to broker data after the meeting.

Administration officials have been considering changes the government could take on its own -- without intervention from Congress -- including approving an environmental waiver that would allow E15 gasoline that contains 15 percent ethanol to be sold year-round.

Other options include allowing renewable identification numbers that are tied to exported biofuel to count toward compliance with domestic quotas and EPA selling new ethanol waiver credits as a way to suppress costs.

During Tuesday's meeting, Trump and the senators discussed pairing the export policy change with the RVP waiver to unleash year-round E15 sales.

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