Ethanol Industry Presses EPA to Expand E15 Sales – DTN

Though President Donald Trump has supported the ethanol industry, U.S. Environmental Protection Agency Administrator Scott Pruitt has yet to address perhaps the most important issue to the industry, the lead lobbyist for the nation’s largest ethanol interest group said on Tuesday.

The future of biofuels will depend on having markets available, most notably by expanding the industry’s ability to sell E15 year-round.

“What I want is real simple,” Renewable Fuels Association President and CEO Bob Dinneen told reporters here.

“RVP parity. Regulatory reform. Things happen in D.C. I want the president to understand that his EPA administrator is not fulfilling the president’s promise to address this issue.”

Right now, E15 sales are limited to certain times of year because of ozone concerns, although the science shows little or no difference between E10 and E15.

Pruitt recently told a U.S. Senate committee the agency is considering its legal authority to make administrative changes to allow year-round E15 sales.

“I think EPA Administrator Pruitt needs to take a key from the boss and provide volatility parity for E10 and E15, allowing consumers to make the choice of which is the best fuel for their vehicle and their pocketbook,” Dinneen said.

“They want to know if they’ve got the legal authority to make that change, they do. They need to get about the business of doing it. This administration in particular begins and ends at the top. And the president of the United States has been unambiguous.”

TED CRUZ EFFORTS

During the past several months, Sen. Ted Cruz, R-Texas, has held up the nomination of Iowa Agriculture Secretary Bill Northey to an undersecretary position at USDA in an attempt to get what he wants on Renewable Fuel Standard reform. Northey’s nomination remains in limbo.

On the Senate floor in recent weeks, Cruz made the claim that ethanol interests have been unwilling to meet with him and petroleum interests to talk about federal biofuel policy.

“What Ted Cruz said on the floor of the Senate was that we were refusing to meet to talk to him,” Dinneen said. “I’m sorry, that’s simply not true. We’ve not had an invitation from Ted Cruz to go talk to him about it. Anybody that knows me, knows I’ll talk about ethanol anytime, anywhere with anybody. And I would tell Ted Cruz that he’s wrong. The facts do not support what he is suggesting. Ted Cruz was inaccurate in suggesting that the ethanol lobby was refusing to meet. That’s not the case at all.”

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Cruz has suggested capping the price of renewable identification numbers, or RINs, at 10 cents as a way to control the costs for refiners to comply with the RFS. That proposal has been roundly rejected by ethanol interests, who say it would essentially end the RFS.

In addition, Sen. John Cornyn, R-Texas, has been circulating on Capitol Hill proposals to reform the RFS. Dinneen, however, said he’s not aware of the details of those proposals.

Dinneen was asked what the ethanol industry would be willing to give up to the oil industry for year-round E15 sales.

“I’m just not going to negotiate in public,” he said. “In fact, I don’t believe that the RFS needs to be fixed. I don’t think it’s broken. If there are issues that some refiners want to have addressed, tell me what they are and we’ll see what we can do to address them.”

Dinneen said refiners who have “complained” about the high cost of RINs have not all invested in the necessary blending infrastructure.

“If the administration ultimately decides that’s an issue they want to address, the way to address it is by providing volatility parity,” he said.

“That would get more free RINs into the marketplace. You can address the RIN price in one of two ways. You can destruct demand. You can lower the RFS in some form or fashion. Pick your way of doing it. Or you can increase the use of biofuels because that’s what would drive the price of RINs down as well.”

WASHINGTON PROPOSALS

Either way, Dinneen said, he wouldn’t support any changes to the RFS that would hurt biofuels demand.

“I’ve not seen what Cornyn is up to,” he said in reference to the proposals the senator from Texas has been circulating on Capitol Hill. “I hear lots of rumors about it. But what I hear ultimately is he just wants to end the program. No, that’s in my view not constructive and probably not going to go anyplace.”

Philadelphia Energy Solutions recently blamed RFS compliance costs for filing Chapter 11 bankruptcy protection. On Monday, PES released a statement to the press countering criticisms by the RFA and others who say the company’s woes have nothing to do the RFS.

“But what is also lost in that they’re prioritizing some refinery jobs in an antiquated facility outside Philadelphia, and are giving no consideration whatsoever to the hundreds of thousands of farmers across the country that are today being asked to sell their commodities below the cost of production,” Dinneen said.

“And they’re comfortable ripping away that important value-added market to save some jobs in Philadelphia. I’m sorry, I find that offensive.”

On Tuesday, the American Petroleum Institute called on the EPA to reject small refiners’ request for RFS waivers.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

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