Updates throughout.
Valero chief executive Joe Gorder said he "would not believe anything you read" as rumors swirl around talks within the Trump administration to make changes benefiting merchant refiners.
The industry should wait to see details of any change to the Renewable Fuel Standard from the White House or Environmental Protection Agency leadership, Gorder said at the Merrill Lynch 2017 Refining Conference in New York.
"We are being mentioned, other people are being mentioned," Gorder said. "I try not to read all that stuff, but I will tell you we are working moving the point of obligation hard, and I think we have got a compelling argument that it should happen."
The Trump administration is considering changes to who must ensure that rising volumes of renewable fuels enter the US transportation fuel supply each year.
The White House does not have a pending executive order planned on the regulation, according to a spokeswoman. But the administration did not respond to questions on whether such talks were underway.
For the past ten years, the point of obligation for that mandate has landed at refiners, importers and certain other companies that produce that fuel.
Those companies prove their compliance by gathering renewable identification numbers (RINs) generated when renewable fuels are blended with conventional blendstocks to make finished fuels. Valero and other merchant refiners that lack blending infrastructure must purchase RINs from companies that do.
Merchant refiners have argued blenders that have no obligation to meet the mandates have stymied the increase of US biofuel consumption and unfairly profited off of refiners under the program. Proponents include Carl Icahn, a Trump adviser who called the program an epitome of bad regulation. Icahn holds a majority share of merchant refiner CVR Energy, which paid more than $200mn in compliance costs under the program last year.
Supporters of the current mandate have said refiners fighting to keep market share would make biofuel blends more expensive and overly complicate the program through their proposed change.
Valero operates the third-largest US ethanol producing capacity in addition to the largest independent refining system. The company was in favor of higher ethanol consumption, Gorder said.
Uncertainty around the new administration's policies had rattled business, Gorder said. Refiners in particular have wanted details about a proposed tariff on imports including crude and fuels and potential changes to the biofuel blending mandates.
But the climate was better overall, Gorder said.
"It is one thing for them to be reasonable and for us to maintain the public health and be good stewards of the resources, and so on," Gorder said. "It is another thing to just make it punitive because you do not like a particular business, and I think that is where we got before November."
