White House calls for additional refinery waivers in order to lower pump prices
According to two officials in the administration, the White House asked federal environmental regulators for permission to allow small oil refineries across the country to mix less biofuels than originally planned into their gasoline and Diesel. This is part of an effort to ease the pump price.
This outcome would?please? the oil industry but cause a backlash among agricultural interests in the Midwest, where they have been fighting ferociously to enforce strong biofuel mandates for the benefit of the country's farmer.
According to federal law, refiners must blend tens or hundreds of millions of gallons each year of biofuels such as corn-based ethanol in the nation's fuel pool, or purchase renewable blending credits (RINs) from those who do. RINs are generated for every gallon of biofuel. Smaller plants may be eligible for waivers, if the requirements are causing them financial hardship.
The U.S. Environmental Protection Agency is currently reviewing 34 requests. It has estimated that enough waivers will be approved to cover approximately a billion RINs in biofuel blending requirements this year. The EPA announced on Friday that a decision is expected before the end of the month.
Two sources, who asked not to be identified, said that the White House had recently asked EPA to waive a larger volume. Sources said that the White House's senior adviser Stephen Miller is driving the push, along with members of the Energy Dominance Council, and other policy advisors who are concerned about high energy prices.
Several oil and Biofuel Industry Representatives briefed on the issue by the Administration said they expected the EPA would ultimately approve?anywhere from 1.2 to 1.8 billion RINs for Small Refinery exemptions.
This would reduce the overall mandates of the EPA for biofuel blending for the year. The EPA set a record 26,81 billion RINs by 2026.
The EPA informed? The EPA told?
Stephen Miller's representatives did not reply to our request for comment. The White House, including the Energy Dominance Council referred all comments to the EPA.
This issue brings back one of the most controversial battles during the first Trump administration, when the EPA expanded its exemption program in order to appease the refining sector. However, this angered farmers along the Farm Belt.
POLITICAL CALCULATION
Top Trump administration officials are pushing to expand the program in response to rising concerns over high gas prices since the U.S. war with Iran disrupted Middle East oil exports via the Strait of Hormuz. These pump prices could be a liability for Trump and his fellow Republicans in the midterm elections of November.
Refiners claim that higher biofuel blend obligations increase the price of gasoline because they impose higher operating costs. Biofuel advocates, however, reject this argument. They say that ethanol reduces fuel prices because it increases supply with a relatively inexpensive additive.
The Trump administration has already taken several steps to reduce energy costs. These include releasing emergency oil stocks and relaxing certain anti-smog rules for gasoline in the summer months. However, fuel prices are still stubbornly over $4 per gallon.
Agricultural supporters in the Farm Belt, eager to be ahead of the EPA's decision, are already agitated by the question of expanding biofuel waivers.
Attorneys general from Iowa, South Dakota, and Missouri sent a 'letter' to EPA Administrator Lee Zeldin on Tuesday, urging him not to grant waivers to refineries. They argued that recent reports of booming earnings in the refining industry undermined claims that refiners were suffering economic hardship.
The letter stated that "the refineries want their cake and eat?it, too."
Chuck Grassley, Senator from Iowa, said on X on Monday that he hoped the Trump administration would not give small refinery exemptions?at a level near a record. Would only benefit petroleum refiners who are making record profits."
In the meantime, the prospect of large-scale exclusions has already affected RIN prices. They fell to their lowest levels in over four months on Sunday.
The American Soybean Association stated that high exemptions would eliminate demand for biodiesel or renewable diesel and cost soybean growers about $1 billion. Reporting by Siddharth Cavale in New York, Jarrett Renshaw and Alistair Bell in Washington.
(source: Reuters)
