Oil-biofuel compromise eludes Trump
Global disputes over trade and nuclear weapons have consumed plenty of President Trump’s time and attention, but a narrow domestic clash over U.S. biofuel policy may be giving those issues competition.
Trump has held more than half a dozen meetings and helped broker at least three near-deals on U.S. ethanol and biodiesel mandates since he moved into the White House. Despite the intense Oval Office negotiations, a lasting compromise between warring oil and biofuel interests has eluded the president. Now, his patience may be wearing thin.
Trump joked at one recent White House meeting on the topic that he had spent more time on ethanol than on both China and Iran, according to people familiar with the matter. The people asked not to be identified describing a private meeting.
“The president is tired of dealing with this,” Sen. Charles E. Grassley, a Republican from Iowa, told reporters Tuesday. “He’s more or less said so many times.”
That frustration began long before the current negotiations, Grassley said, recalling Trump’s efforts last year to lift restrictions on E15 gasoline, a higher-ethanol blend.
“Even back when we were in the White House talking about E15,” Grassley said, “it just seemed like he could never get to the bottom of the ethanol issue or he couldn’t satisfy both Big Oil and the farmers, and he was trying to do that.”
Trump’s recent quip may have betrayed his frustration with the biofuel policy fight, which pits two of his favored constituencies — agriculture and energy interests — as well as several swing states against each other.
Advocates for cornbased ethanol and soybeanbased biodiesel say the Environmental Protection Agency has too eagerly granted oil refineries waivers exempting them from mandates compelling them to use the renewable fuels. At the same time, oil industry allies have implored the administration to keep issuing the waivers and rein in the costs of tradable credits they use to prove they’ve fulfilled annual blending quotas.
One White House official complained to lobbyists at a meeting last week that the president was tired of dealing with the issue, according to a person familiar with the exchange.
Trump was pulled into the issue even before he took office. In August 2016, Carl Icahn, the billionaire investor, then-refinery owner and later unpaid presidential regulatory advisor, complained about a “rigged” marketplace for the renewable fuel credits. He helped vet Trump’s nominees to lead the EPA and tried to craft his own compromise with biofuel supporters.
In the spring of 2018, Trump presided over months of talks — ultimately reaching a pact in June that promised to simultaneously boost ethanol and keep refining costs in check. Within days, the plan fell apart after fierce criticism from Iowa’s two Republican senators, Grassley and Joni Ernst.
Now, Trump is trying again after getting warnings that an uproar in Iowa and other politically important farm states over refinery waivers could haunt him at the ballot box next year. Refining executives from Valero Energy Corp. and Marathon Petroleum Corp. pressed their case with Trump last week. Corn Belt senators and ethanol producer Archer Daniels Midland Co. also made their arguments in a meeting with the president.
Trump already promised a “giant package” of changes he boasted would make farmers happy while keeping oil refineries in business. But he may have to get through at least one more meeting first. More senators — this time from states with big refining interests — are seeking an audience with the president this week.
Dlouhy, Jacobs and Wingrove write for Bloomberg.