Dec 7, 2017

Behind today's White House biofuels meeting

President Trump and multiple Cabinet-level officials will meet with a group of GOP senators who say that the federal biofuels blending mandate called the Renewable Fuel Standard is harming refiners in their states. Trump's Environmental Protection Agency recently declined to soften the RFS.

  • Lawmakers from Texas, Louisiana, Pennsylvania and elsewhere say a key concern is the cost of credits, called renewable identification numbers, that the petroleum industry uses to help comply with the RFS.

Why it matters: The midday meeting signals how the decade-old RFS has created fierce, politically fraught policy battles between lawmakers allied with the refining industry and a separate group carrying the mantle of midwestern farming and biofuels interests.

Who is huddling with Trump: According to the White House, expected attendees include economic adviser Gary Cohn, EPA Administrator Scott Pruitt, Agriculture Secretary Sonny Perdue, Deputy Energy Secretary Dan Brouillette, and White House legislative affairs chief Marc Short.

The senators expected are: Ted Cruz, John Cornyn, John Barrasso, Pat Toomey, Bill Cassidy, Mike Enzi, Jeff Flake, Jim Inhofe, John Kennedy, James Lankford, and Mike Lee.

What we're hearing: A source with a GOP senator's office said the goals are near-term solutions to high RINs costs, as well as launching a broader discussion of RFS policy over the next several years. Administrative and legislative options are ripe for discussion.

They want to "make sure the president knows this is not an all or nothing proposition," and that "nobody is trying to kill the ethanol industry."

Yes, but: There's also a political message as the lawmakers emphasize employment in the refining sector that the senators say is threatened. "These are the union workers and the union leaders that supported his candidacy, and these are the folks who helped him win a place like Pennsylvania, for instance," the Senate source said.

White House posture: Lindsay Walters, a White House spokesperson, said Trump will discuss his "commitment" to the RFS but also how to "effectively address" the effect on refiners.

  • "The President understands the importance of the RFS to rural America. He is also aware that workers in the refining sector believe the program isn't working as intended, and should be improved to reduce their compliance burdens," she said.

A source on the side of independent refiners said: "I think the administration is looking for a way to ease the financial burden for refiners without triggering a political backlash from the corn crowd."

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