White House hosts oil and biofuel discussions as Trump administration closes to a decision on refinery exemptions

Four sources familiar with these discussions say that the White House held separate meetings this week with oil refiners as well as biofuel producers to try to resolve an ongoing dispute about billions of gallons in biofuel blending requirements waived by the U.S. for small refineries.

Discussions indicate that the Trump administration will soon make a final decision about whether or not larger refiners are required to compensate for the waived gallons. This decision was originally expected at the end of October, but the shutdown of the federal government delayed it.

The outreach shows the administration's efforts to balance competing demands from two politically powerful constituencies - the oil industry which claims that federal blending mandates will threaten refinery jobs and the farm belt which claims the waivers are eroding demand for corn based ethanol and biofuels. The outcome of the meeting could have a significant impact on fuel prices, farm incomes, and energy politics in general heading into next.

The meetings included representatives of the biggest U.S. biofuel and refinery companies. They also discussed ways to make E15 (gasoline containing 15% ethanol) available all year round. Sources said that the administration could combine this move with reforms of the small refinery exemption program to gain support from both industries.

The White House didn't immediately respond to an inquiry for comment.

According to the U.S. Renewable Fuel Standard (RFS), refiners are required to blend billions gallons of renewable fuels into the nation’s fuel supply every year, or purchase compliance credits known as RINs from others who do. Small refiners can apply for waivers (also known as small refinery exceptions) if they demonstrate economic hardship.

The Environmental Protection Agency cleared up a backlog from 2016 of over 180 small refinery exempt requests. This was a major move, which required the agency propose a way to account for waived duties. In its proposal, the EPA said that it would have waived blending requirements worth 2,18 billion RINs between 2023 and 2025.

Refiners are opposed to reallocation because they say it will increase regulatory costs.

A spokesperson for the American Petroleum Institute stated, "We are grateful to the administration for its leadership in bringing together stakeholders to find a solution that is practical on E15 reform and small refinery exempt reform." (Reporting and editing by Lisa Shumaker; Jarrett Renshaw)

(source: Reuters)