WASHINGTON, D.C. — President Donald Trump has suspended negotiations on biofuel policy changes, drawing praise from farming groups and ire from refinery unions.
The White House had been expected to unveil a deal to partially rework biofuel rules, including one that would have counted exported ethanol toward the annual volume mandates under the Renewable Fuel Standard (RFS), which would have effectively decreased the amount of ethanol blended into the nation’s gasoline.
The deal would also have removed restrictions on selling gasoline with high ethanol concentrations in the summer.
Republican Iowa Sens. Chuck Grassley and Joni Ernst lauded the decision, with Grassley tweeting: “Pres Trump helped farmers by rejecting bad ethanol deal. I appreciate. GREAT NEWS.” Likewise, Ernst took to Twitter in celebration of the proposal’s apparent failure: “(Trump) has said he ‘looovves the farmers!’ Iowa is feeling that love today, as the President just assured me he ‘won’t sign a deal that’s bad for farmers.’”
Despite months of negotiations, Trump has struggled on the fine line between two of his key constituencies, farmers and oil refiners. While his decision to postpone the deal drew praise from ethanol supporters, it drew sharp criticism from refiners.
The United Steelworkers, the largest industrial union in North America representing refinery workers, expressed their disappointment, saying the decision leaves in place a costly regulation that puts thousands of jobs at risk. “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.
A day prior to the announcement, biofuel blending credits hit a five-year low to 18 cents apiece. Prices for the credits have tumbled over the past few months with the administration’s plan to overhaul the program along with the U.S. EPA’s increased use of hardship waivers for refineries.
On his campaign trail, Trump praised ethanol, a pledge embraced by farmers in the Midwest; however, his pick for the head of the EPA, Scott Pruitt, has chosen to back the oil industry on numerous occasions. Ernst lambasted Pruitt for his preference for the refineries, at an S&P Global Platts Energy Podium discussion earlier the same day of the White House’s announcement to delay negotiations.
“I am hopeful that the President will just recognize that Mr. Pruitt is breaking our President’s promises to farmers, and at some point he will say, ‘It’s time for you to go.’ But that’s up to the President to make the call. I will remain highly critical of Administrator Pruitt.
“Pruitt is about as swampy as you get here in Washington, D.C. And if the President wants to drain the swamp, he needs to take a look at his own cabinet.”
The delay, however, is just a temporary reprieve as oil companies look to find a way to adjust the RFS. Frank Maisano, a senior principal at Bracewell LLP – a lobbying firm which represents oil interests – said he believes Pruitt will eventually find a solution to benefit both sides.
"The President has heard the voices of hard-working union refinery workers that helped elect him," he said. "We fully expect the President will deliver a common-sense, win-win plan that provides new markets and opportunities for ethanol advocates and much-needed relief for refinery workers."