The White House revealed more details on President Donald Trump’s plan to reform ethanol mandates, a move that will affect corn growers and oil refineries across the country.
In a conference call with reporters Monday, a senior White House official explained what the president will be seeking to do when it comes to the Renewable Fuel Standard, a congressional statute that mandates a certain amount of biofuels be mixed into the U.S. transportation supply every year.
“The President has directed Acting Administrator Wheeler to undertake a rulemaking to consider two actions. First is to expand the Reid vapor pressure waiver to fuel blends with up to 15 percent ethanol, which will allow for the sale of E15 year-round. And two: RIN market stabilization efforts to stabilize the RIN” market and provide for more transparency, said the White House official.
The approach is an attempt to fix a problem that has two opposing sides: Corn growers in Iowa and oil refineries elsewhere around the country.
Corn farmers support the Renewable Fuels Standard because it drives demand for their product. The “Corn Belt” would love to see caps on E15 — gasoline containing 15 percent ethanol — lifted and sold year-round. Oil interests, on the other hand, hate it because the ethanol-blended gasoline drives up their operating costs, with many oil-state senators already lining up to oppose Trump’s impending announcement. However, many of these refiners would welcome cost stabilization on Renewable Identification Numbers, or RINs. (RELATED: Ted Cruz Looks For Middle Ground In Fight Between Corn And Oil Industries)
The Environmental Protection Agency uses RINs — serial numbers attached to biofuels — to ensure oil refineries are meeting their Renewable Fuel Standard requirements. The cost of RINs have risen dramatically over the past few years. The White House pointed out that the price of RINs have risen from around three cents in 2014 to over a dollar now.
The White House has argued that RIN requirements have hurt smaller refineries the most.
“One of [Trump’s] particular concerns is the small refining community because they are the ones that are usually unduly burdened by the RFS, compared to the more integrated ones that actually can blend and create their own RIN credits,” the White House official stated continued during the Monday press conference. “I would say that it’s the small, independent refineries that this is targeted at.”
Trump is due to give a speech in Council Bluffs, Iowa on Tuesday, where he will unveil his plan to sell E15 year round — an announcement that is sure to get the local crowd excited. The event will be part of a campaign stop for Iowa GOP Rep. David Young, who is running a tight race in the state’s 3rd Congressional District.
While the announcement will be taking place on Tuesday, the new rules reaching fruition will likely take much longer. The White House’s goal is to get the rule established by the 2019 summer driving season.
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