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Trump supports waiver for 15pc ethanol blend

12 Apr 2018 18:14 (+01:00 GMT)
Trump supports waiver for 15pc ethanol blend

Houston, 12 April (Argus) — President Donald Trump today said his administration would make it easier to sell 15pc ethanol gasoline blends year-round in most of the country.

Trump told senators gathered to discuss agriculture and trade that "we are going to go to 12 months, which makes a lot of farmers very happy." Air quality laws prohibit the sale of E15 for many markets during the peak summer driving months between June and September.

"This will help farmers and keep (renewable identification number) prices low like refiners have wanted," Senator Chuck Grassley (R-Iowa) tweeted after attending the meeting.

Sources familiar with the debate both in and outside the refining industry have questioned the executive branch's ability to make such a waiver stick. The waiver was inflexibly defined in statute more than 25 years ago as for a 10pc ethanol blend. An agency directive expanding the waiver would head almost immediately to court for a judge's interpretation.

Environmental Protection Agency administrator Scott Pruitt told senators in January that he continued to study whether the agency had the legal authority to expand the waiver. The agency did not respond to a request for comment on that process today.

Negotiators around long-developing legislative efforts, meanwhile, have held out the waiver as a carrot to entice biofuel support for other changes to the Renewable Fuel Standard (RFS). The fuel blending mandates requiring minimum volumes of renewables blend each year into the US transportation fuel supply provides demand for corn and soybean production used to generate biofuels. The program requires refiners, importers and other companies to acquire renewable identification numbers (RINs) generated by fuel blending to prove compliance. Refiners including Valero and PBF Energy have assailed the program as costs for RINs have climbed.

Senator John Cornyn (R-Texas), who said in March that his proposal to change the RFS was weeks away, could not be immediately reached for comment. US representative John Shimkus (R-Illinois), who was drafting a House version of legislation to change the program, could also not be immediately reached for comment.

Trump's pledge comes as trade disputes with China and low commodity prices have made farmers increasingly anxious about the current growing season. Agriculture secretary Sonny Perdue told senators yesterday that the administration's actions around the RFS was weighing on rural America.