A rumored renewable fuels order by Trump roils industry

The renewable fuels industry roiled Tuesday after a national advocacy group said a Trump official told them the president would sign an executive order shifting the burden for blending ethanol and biodiesel into the nation’s fuel supply from oil refiners to fuel retailers.

The move, critics said, would hurt Iowa farmers and consumers by stymieing the widespread use of ethanol and biodiesel.

The White House distanced itself late Tuesday from reports that President Donald Trump would sign a renewable fuels executive order.

It topped a day of acrimonious finger-pointing over the possibility of a "backroom deal" between the Renewable Fuels Association and Trump adviser Carl Icahn, a billionaire investor in CVR Refining, a Texas energy company.

"This is nothing more than a couple of self-interested parties trying to reap financial gains by influencing government," said Jeff Broin, CEO of Poet, a South Dakota company that's the world's largest ethanol producer. Poet has seven ethanol plants in Iowa.

Early Tuesday, Bob Dinneen, CEO of the Renewable Fuels Association, said in a statement that a Trump official contacted the Washington, D.C., lobbying group, saying an executive order was pending.

Despite the group's opposition, it was told the order was "not negotiable," Dinneen said.

Other renewable fuels groups charge that Dinneen's group tried to negotiate a deal with Icahn, asking the administration to allow summer use of E-15, gasoline with 15 percent ethanol.

Most gasoline sold in the nation is 10 percent ethanol, a mark the industry has struggled to surpass.

Renewable fuel groups were outraged.

“If true, this proposal would eviscerate America’s progress under the RFS and impose indefensible costs on consumers," said Emily Skor, CEO of Growth Energy, a Washington, D.C., advocacy group for ethanol producers.

Growth Energy said the shift would require "large-scale restructuring of fuel markets," resulting in "turmoil for retailers, higher costs for consumers, and years of uncertainty for hundreds of thousands of workers in the biofuel industry."

Skor said the Renewable Fuels Association's largest member, Valero, which petitioned for the renewable fuels change, would profit from the "self-serving insider deal."

The Renewable Fuel Association, she said, was not advocating on the "side of the ethanol industry or the American farmer."

Despite the White House's objections, Dinneen said late Tuesday there's "certainly something in the works, but they’re not going to confirm it until they are ready to roll with it."

U.S. Sen. Chuck Grassley, a Republican, said he has "no reason to believe that such an executive order is pending or imminent."

Grassley, who opposes the shift, said Trump and his team "so far have committed to upholding" the federal mandate.

On Tuesday, Fuels America, a coalition of renewable fuels groups, "severed ties" with the Renewable Fuels Association, saying the group "elected to lend its support" to Icahn’s effort to "mislead biofuel advocates into accepting rewrites to the RFS in exchange for changes to outdated EPA regulations that limit summertime sales of ethanol."

The Iowa Renewable Fuels Association said it does not support "any 'deal' or negotiations" on the point of obligation.

Dinneen said Wednesday his group continues to have "great respect for the Fuels America coalition" and believes in its mission.

He said in a statement there was "some misinformation about our discussions involving an executive order" but the group declined to elaborate.

U.S. Sen. Joni Ernst, a Republican, opposes a change, saying it would benefit a "select few."

"I will continue to push back against any attempts to destabilize the renewable fuels marketplace, regardless of where they originate,” she said Tuesday.

Even the American Petroleum Institute opposes the change, saying it is "not real reform." The oil group seeks to eliminate the federal mandate.

The Renewable Fuel Standard, overseen by the Environmental Protection Agency, requires ethanol's use to reduce air pollution.

Iowa is the nation's leading ethanol and biodiesel producer.

Broin, the Poet CEO, said agriculture needs the support that comes from using corn and soybeans to make renewable fuels, especially as it struggles with a downturn.

"Today, we have commodity surpluses and low prices," Broin said. "Net farm income is down nearly 50 percent from 2013, and Iowa cropland values are down 17 percent.

"Moving from E-10 to E-15 will use 2 billion bushels of corn more per year and play a significant role in alleviating the ag crisis," he said.

Several Iowa groups, from truck drivers to convenience stores, oppose the change.

For example, Casey's General Store wrote EPA last week, saying the rule would "decrease incentives for companies, including Casey’s, to blend more renewable fuels, raise the retail price of fuel, and create significant disruptions in the fuels marketplace.”