Senators pressure Trump to reject ethanol change

Grassley, Ernst among senators calling proposal 'indefensible'

The Archer Daniels Midland (ADM) dry corn milling ethanol plant in southwest Cedar Rapids. (Gazette file photo)
The Archer Daniels Midland (ADM) dry corn milling ethanol plant in southwest Cedar Rapids. (Gazette file photo)

WASHINGTON — More than 20 Republican and Democratic U.S. senators pressed President Donald Trump on Thursday to reject requests from oil refiners — including from one of his own advisers — to overhaul the biofuels program, weighing in on a debate that has been roiling farm goods and gasoline markets for days.

Oil refiners are urging the change to push the burden of meeting annual biofuels requirements downstream, a move that has been met with backlash from corn-based ethanol producers and fuel retailers. Iowa is the largest ethanol producer in the nation.

The change would be “unwarranted and indefensible,” wrote the group of senators that included Republicans Chuck Grassley and Joni Ernst from Iowa.

“The overwhelming majority of fuel transportation market participants oppose any change to the point of obligation because it would cause massive disruptions and could lead to higher prices for consumers,” the letter said.

The White House said last week it was considering the changes, whose supporters include billionaire investor and special adviser to Trump on regulations Carl Icahn, who also is a majority stakeholder in oil refiner CVR Energy Inc.

The news shook the market for biofuels compliance credits and whipsawed some grain prices as traders fretted over how to position ahead of any changes.

The U.S. Environmental Protection Agency under former President Barack Obama in November proposed denying the request from refiners, but opened the issue to public comment.


According to a renewable energy trade group, Icahn pitched the idea of moving the point where biofuels are mixed with gasoline away from refineries in exchange for the government allowing more sales of fuel blended with a higher percentage of ethanol.

A White House spokeswoman earlier this month denied speculation that Trump was about to issue an executive order on renewable fuels. She declined to comment on the state of discussions about it.

“This type of change would not only wholly undermine the intent of the program, but would also result in a massive, costly, time-consuming shift in compliance,” said the senators’ letter.

The Renewable Fuel Standard, signed into law by former President George W. Bush, was designed to boost use of biofuels like ethanol and biodiesel in gasoline and diesel in a bid to curb greenhouse gas emissions, boost rural economies and reduce dependence on foreign oil.

The program has been stymied by regulatory delays for years and become a battleground between the oil and corn industries.



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