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President Trump Rejects Changes to Renewable Fuel Standard

Joseph Morton reported on the front page of Thursday’s Omaha World-Herald that, “President Donald Trump scanned the Rose Garden on Wednesday as he looked to recognize lawmakers there for his signing of a veterans health care bill.

“When he got to Sen. Joni Ernst, R-Iowa, he couldn’t help alluding to his rejection of a proposed overhaul of federal ethanol requirements known as the Renewable Fuel Standard. Those changes were fiercely opposed by Midwest biofuel producers.

“‘I did you a good favor for the farmers yesterday, right?’ Trump told Ernst. ‘We love the farmers. Right, Joni?’

“Seated in the audience, Ernst nodded in response. On Twitter, she thanked the president for upholding a promise to ‘stand up for farmers.'”

Mr. Morton explained, “Indeed, Trump’s decision not to sign off on the changes had biofuels producers and their Capitol Hill allies breathing a sigh of relief.

‘I thank President Trump for helping farmers by rejecting once and for all a proposal that would have … really hurt ethanol,’ Sen. Chuck Grassley, R-Iowa, told reporters.

Iowa and Nebraska are the No. 1 and 2 ethanol-producing states.”

“Trump rejects effort to weaken ethanol mandate,” by Joseph Morton. Omaha World-Herald (June 7, 2018).

The World-Herald article noted that, “Despite months of negotiations, the Trump administration has struggled to find a balance on a contentious issue that divides two of the president’s key constituencies: Midwest farmers and refiners in Pennsylvania. On the campaign trail in 2016, Trump promised to support ethanol, a pledge embraced by farmers who grow the corn used to produce it.

Refiners’ concerns generally center on the cost of compliance credits known as renewable identification numbers, or RINs, which they use to prove they have satisfied annual biofuel quotas. Even without formal changes, news reports about potential alterations to the mandate have caused the value of RINs tracking ethanol blending to plummet to a five-year low.

“The ethanol industry and its Capitol Hill allies have complained bitterly about EPA’s aggressive use of small refinery waivers in ways they say are not justified and are helping destroy demand for ethanol.”

Meanwhile, Bloomberg writers Jennifer A Dlouhy and Mario Parker reported on Thursday that, “A day after a tentative agreement to overhaul U.S. biofuel policy appeared to collapse amid farm-state concerns, EPA chief Scott Pruitt met to discuss the issue with the lead senator pushing for the changes: Ted Cruz.

“Pruitt had dinner with Cruz, a Texas Republican, at a Washington steakhouse blocks from the U.S. Capitol on Wednesday night.

“Pruitt, the Environmental Protection Agency administrator, declined to comment on the meeting as he left the restaurant, but Cruz said the dinner included discussion about the Renewable Fuel Standard and had been planned well before Monday’s reports that a White House-brokered accord was unraveling. Cruz stressed that a deal to overhaul the biofuel policy could be revived.”

The Bloomberg writers added,

The conversations are ongoing,’ Cruz said. ‘And I continue to believe that there is a positive win-win solution for everyone.’

“Refiners complain about the cost of complying with the biofuel mandate, while farm-state lawmakers say the program provides a crucial safety net for their rural constituents,” the Bloomberg article said.

“U.S. Corn Utilization.” Feed Outlook / FDS-18e / May 14, 2018 Economic Research Service, USDA

And on Wednesday, Reuters writers Jarrett Renshaw and Chris Prentice reported that, ” U.S. President Donald Trump, in yielding to pressure from farming states and agreeing to suspend changes to U.S. biofuel policy is now being criticized by another important constituency, the main union for oil refinery workers.

“The United Steelworkers, the largest industrial union in North America representing refinery workers, said the decision leaves in place a costly regulation that puts at risk thousands of blue collar jobs of the type Trump has promised to preserve.

“‘Inaction by the Trump administration now threatens the livelihood of thousands of East Coast refinery workers and tens of thousands of related jobs throughout the Northeast,’ the union said in a statement on Wednesday.”

The Reuters article indicated that, “‘With no official decision, there is more to come on this,’ said Brendan Williams, a lobbyist with merchant refiner PBF Energy Inc.”

Keith Good

Keith Good

Keith Good is the social media manager for the farmdoc project at the University of Illinois. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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