President Donald Trump, seeking to tamp down political fallout in U.S. farm states essential to his re-election, has ordered federal agencies to shift course on relieving some oil refineries of requirements to use biofuel such as corn-based ethanol.
Trump and top cabinet leaders decided late Thursday, Aug. 22, they wouldn't make changes to just-issued waivers that allow small refineries to ignore the mandates, but agreed to start boosting biofuel-blending quotas to make up for expected exemptions beginning in 2021. The outcome was described by people familiar with the matter who asked not to be named before a formal announcement could be made.
The decision was reached after a flurry of White House meetings this week on the issue, which divides two of Trump's top political constituencies: rural Americans and the oil industry. With the move, Trump is largely siding with farmers, ethanol producers and political leaders in Iowa that have accused the president of turning his back on the industry.
But the administration's shift risks blowback in Pennsylvania and other battleground states, where blue-collar refinery workers have held rallies to push for relief from U.S. biofuel quotas they say are too expensive. The largest coalition of U.S. building trades unions on Thursday warned Trump that changing course on exemptions would betray the president's "campaign promise to protect every manufacturing job."
Representatives of the White House press office didn't have an immediate comment.
Iowa-based biodiesel producer Renewable Energy Group Inc. climbed as much as 4.5% on the news, to $11.53. Pacific Ethanol Inc. and Green Plains Inc. briefly gained before resuming losses as the U.S.-China trade war showed signs of deepening with the latter announcing plans to levy additional tariffs on American-made goods and Trump promising to respond.
Administration officials agreed to the broad contours of a renewable fuel plan, including further moves to encourage the use of E15 gasoline containing 15% ethanol, beyond the 10% variety common across the U.S.
Under the tentative plan, the Environmental Protection Agency will also give a 500 million gallon boost to the amount of conventional renewable fuel, such as ethanol, that must be used in 2020. A separate quota for biodiesel, typically made from soybeans, would get a 250 million gallon increase.
This article was written by Jennifer A. Dlouhy and Mario Parker, reporters for The Washington Post.