White House biofuels meeting ends as battle continues

A White House meeting over making changes to the country's biofuels mandate ended Tuesday with 'no deal,” said Sen. Chuck Grassley, R-Iowa, as the battle between farm and oil-producing states over the 13-year old Renewable Fuel Standard continues to rage.

On a conference call with reporters after the meeting that included President Donald Trump, Sen. Ted Cruz, R-Texas, Grassley and Sen. Joni Ernst, R-Iowa, Ernst said the dispute over the impact of the law and its compliance system still is up in the air.

'No guarantees on anything,” Ernst said. 'It's status quo.”

Cruz, though, issued a statement saying the meeting was productive, adding, 'We are close to solving the problem.”

The White House meeting was called over rising concerns of the cost of complying with the fuel standard. It came weeks after a Pennsylvania refinery filed for bankruptcy protection, pointing a finger at the high cost of compliance.

The refinery paid a steep price for Renewable Identification Numbers, or RINs, to show compliance with the fuel standard. If it had invested in infrastructure allowing it to blend in renewables, it would could get the RINs cheaper.

Cruz has called for a cap on the price of RINs. But Grassley and Ernst said neither a cap nor a waiver of the obligation to meet the blending requirements of the law are an element of an acceptable compromise.

That 'would not be a win-win,” Grassley said.

In a statement, Cruz said elements of a solution are stopping RINs from 'imposing billions in unnecessary costs” to some refiners and expanding the market for corn-based ethanol.

The biofuels industry has argued the Pennsylvania refiner's bankruptcy is due to mismanagement, a charge the refinery rejects.

One development out of Tuesday's meeting was that Cruz released his monthslong hold on Iowa Agriculture Secretary Bill Northey's nomination for a top post at the U.S. Department of Agriculture.

The Texas senator was using a nomination important to Iowa as a bargaining chip to force a discussion about changing the renewable fuel policy. He said Tuesday's White House meeting was what he needed to release the hold.

Grassley and Ernst said there appears to be disagreement in the Trump administration about the idea of allowing exports to count as credit toward meeting the fuel standard volume requirements. That was a possibility floated last year within the Environmental Protection Agency, but it was abandoned. The biofuels industry and its supporters like Ernst and Grassley oppose such a move.

There also has been discussion of putting limits on who can trade the RINs. Grassley said banning speculators wouldn't hurt the ethanol industry. He's also proposed allowing wider sale of E15, a higher blend of ethanol.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said Tuesday he believes Cruz is pushing a waiver that would 'gut” biofuels demand.

He warned that granting the request would be a 'complete abdication” of the president's promise during the 2016 campaign to support the Renewable Fuel Standard.

Ethanol backers have repeatedly brought up Trump's pledge of support. But critics also have cited his campaign pledge to support manufacturing workers, like those at the Pennsylvania refinery.

Grassley said Tuesday he believes the president is an 'honest broker” in the dispute, which involve politically important states. 'I don't know that he has a definition of what's fair, but he's going to try to be fair,” Grassley said.

The next step appears to be a meeting Thursday to talk again.