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Corn Growers pass resolution urging Trump to retain RINs

Photo by Loretta Sorensen

ANAHEIM, Calif. — As the White House continues to be embroiled in discussions about whether a cap should be placed on the price of Renewable Identification Numbers (RINs) under the Renewable Fuel Standard, the National Corn Growers meeting here Thursday passed a resolution asking President Donald Trump to “keep the current RIN system without change,” a view also taken by Sen. Charles Grassley, R-Iowa, and biofuels industry leaders.

The resolution was passed at the growers’ annual Corn Congress that followed the Commodity Classic, the convention of corn, soybean, wheat and sorghum growers, here. The meeting was dominated by rumors that Agriculture Secretary Sonny Perdue had agreed to support a cap on the RINs price, which independent refiners want.

Perdue denied that he had agreed to support it, but said he believes that the solution to the conflict over ethanol should be to increase demand by removing barriers to the use of E15, a gasoline blend that contains more ethanol than the current 10 percent blend. But Perdue has been vague about whether he thinks a RINs cap could be part of a package to allow E15.



Under current regulations, vehicles cannot use E15 in the summer, but the ethanol industry says it is safe.

The corn growers and the ethanol industry support the Environmental Protection Agency granting the waiver needed for year-round E15 but want to retain the RINs system, while the oil industry has generally opposed it.



After he participated in the White House meeting along with Trump and Sens. Joni Ernst, R-Iowa, and Sens. Ted Cruz, R-Texas, and Pat Toomey, R-Pa., and industry stakeholders, Grassley said, “Both sides made their case, and the only agreement was to look at economic studies for impact. No decisions were made. Low corn prices are already squeezing farmers’ bottom lines. If the RFS were undermined with a RIN price cap or waiver, that would be made even worse. Thousands of jobs in rural America could be lost. An emerging solution appears to be year-round E15, which would drive down RIN prices. After crossing the 15 billion-gallon-a-year threshold, RIN prices would drop dramatically and remain low.”

But Toomey and Cruz also said they were pleased by the White House meeting, a sign that Trump might agree to the E15 waiver and still cap the RINs price.

In a joint statement, Toomey and Cruz said, “We are encouraged that President Trump recognizes the importance of providing relief from crushing RINs costs and expanding the potential market for ethanol that will benefit both Iowa farmers by letting them sell more corn, and blue-collar refinery workers by saving their jobs in states including Pennsylvania and Texas, and are grateful for the commitment he’s displayed to continue talks that will result in a win-win solution for both parties. We had a productive meeting today with senators on both sides, along with representatives from the unions, ethanol and refining industries, and motor fuel retailers. We are making real progress, and, with the president’s leadership, we believe we can and will ultimately solve the problem.”

Jeff Broin, founder and CEO of POET, the company that builds and manages ethanol plants, had the frankest assessment of the White House meeting, one that pointed out the political importance of ethanol.

Broin said, “It’s clear from this conversation that another refinery bailout is more important to Sen. Cruz and the EPA than the economic crisis facing Midwest voters at the moment. Nothing new was discussed in this meeting. Removing accountability from oil companies would deprive millions of Americans the freedom to choose less expensive, homegrown biofuels and imperil countless jobs and family farms across America’s heartland. I want to thank the president for the opportunity to share the story of how our industry fuels the economic engine of the Midwest. In November, 119 counties there flipped Republican based on President Trump’s commitment to rural economic growth and strong support for the Renewable Fuel Standard. This issue will continue to play out. We will protect interests of this industry, farmers and consumers.”

NCGA President Kevin Skunes, a North Dakota farmer, also issued a statement in response to the White House meeting.

“For corn farmers, the question for the ongoing White House discussions is simple: What is the problem you are trying to solve?” said Skunes. “According to EPA, refiners don’t have a problem. EPA concluded in November that refiners are able to recover the cost of RINs through the prices they receive for refined products and that RIN values are not causing economic harm to refiners.

“For farmers, ethanol blending equals corn demand. Farmers care about RIN values, not because we want them to be high, but because we want the RIN market mechanism to work freely to incentivize blending,” Skunes said. “Increased blending will, in turn, lower RIN values – exactly the way the RFS is intended to work. Government manipulation of the RIN market, on the other hand, disrupts the incentive to blend.

“This is why farmers continue to tell the administration that providing regulatory parity for E15 and higher blends is the best policy answer for refiners’ concerns,” he added.

“Allowing the RIN market to operate freely with year-round sales of E15 would increase the production and consumption of renewable fuels, increase the supply of RINs available for compliance and lower RIN values. Increased use of biofuels is already moving us in this direction, and increased use of E15 and higher blends will get us there faster,” Skunes said.

“As discussions continue with the administration, corn farmers thank President Trump and USDA Secretary Perdue for listening to farmers’ views and supporting agriculture,” he concluded. “We ask that they maintain their strong stated support for the RFS by not interfering with the market mechanism that helps grow biofuels blending.”

Growth Energy CEO Emily Skor said, “The president very clearly understands that the path forward is to allow sales of E15 year-round, promote growth, and put more RINs on the market. The RFS gives homegrown biofuels a chance to compete at the pump, helping to protect consumers from price manipulation and support hundreds of thousands of jobs across the heartland.”

Renewable Fuels Association President and CEO Bob Dinneen said, “We appreciate that President Trump took time to sit down with leaders from the ethanol and gasoline marketing industries, including RFA members, to discuss important issues related to the RFS and the rural economy. We continue to believe the appropriate response to unfounded concerns about Renewable Identification Number (RIN) prices is to expand ethanol use by providing RVP parity, allowing E15 and higher blends to be sold year round. We are pleased today’s conversation focused positive attention on this important issue. We look forward to continued discussions with the White House and welcome additional opportunities to explain why Sen. Ted Cruz’s notion to cap the price of RINs would be disastrous for the ethanol industry, farm economy, and American consumers.”

Sheetz Executive Vice President Mike Lorenz said, “Retailers want to offer our customers options, including lower-cost, higher-octane ethanol blends. An RVP [Reid Vapor Pressure] waiver lifts needless regulations on retailers, generates growth opportunities for American farmers, and makes more RINs available to refiners. The president is looking for a solution that is a win for everyone — farmers, refiners, and consumers — and I think being able to sell E15 year-round meets that goal.”

Advanced Biofuels Business Council Executive Director Brooke Coleman said, “It’s clear that refineries are trying to drive a wedge between President Trump and farm families. And they plan to keep pushing a RIN cap that would throw the RFS into chaos and destroy any hope of revitalizing farm income under the Trump administration. That’s not going to happen, but the president seemed to fully appreciate how easily lifting regulations on E15 sales could pour RINs into the market, which promotes growth on all sides. That is what rural America wants to see, and the president is going to keep hearing it in every conversation with those who care about farm families and workers at over 200 biorefineries coast-to-coast.”

Iowa Renewable Fuels Association Executive Director Monte Shaw said, “President Trump is a businessman, and that clearly showed up today. Trump quickly grasped how allowing the year-round sale of E15 would increase ethanol blending and the supply of RFS credits, thereby lowering their cost for refiners. While refiners continue to ask the president to abdicate his support for the RFS, today’s meeting clearly highlighted that E15 can boost biofuel use and lower RFS credit prices without destroying the RFS. As the president continues to study this issue, we are confident that he will agree that year-round E15 sales are the true win-win.”

Biotechnology Innovation Organization Industrial & Environmental Section Executive Vice President Brent Erickson said, “Current proposals by a small group of refiners to change the Renewable Fuel Standard are anything but constructive. Granting EPA brand-new, far-reaching authorities to issue program waivers, cap RIN prices, or invent new categories of RINs would simply disrupt the RFS and undermine investment in advanced biofuels. Moreover, the proposals run counter to the administration’s goal of reducing regulatory over-reach.”

American Coalition for Ethanol CEO Brian Jennings said that its representatives had explained to Trump how RVP relief for E15 would immediately reduce RIN prices but also conveyed that “capping RINs would destroy demand for renewable fuels and raise pump prices for consumers.”