(Bloomberg) -- Top Trump administration officials are set to meet Thursday to consider options for quelling a backlash in politically important farm states over recent biofuel policy moves, including revoking waivers given to some oil refineries from requirements they use renewable fuel such as corn-based ethanol.
The Agriculture Department is pushing that idea in a memo explicitly outlining policy options for President Donald Trump, amid intense opposition from the Environmental Protection Agency, which administers the program that mandates biofuel. Both agencies will be represented in Thursday’s meeting, which follows a flurry of White House conversations this week on the issue, according to people familiar with the deliberations who asked not to be named before any formal announcement.
The administration is trying to blunt anger in Iowa and other states critical to the president’s re-election, as Trump’s political allies in the Midwest blast the EPA’s Aug. 9 decision to waive 31 oil refineries from 2018 quotas encouraging the use of ethanol and soybean-based biodiesel. But any shift to favor agricultural interests over oil companies could also have political implications in Pennsylvania and other campaign battleground states, by angering blue-collar refinery workers and oil industry benefactors.
The Agriculture Department is recommending rescinding some of the oil refinery exemptions, despite warnings from top EPA officials the revocations could be illegal. The Agriculture Department also has recommended increasing biofuel quotas to make up for the exemptions, a move that would effectively boost the burden for larger refineries that are not eligible to win waivers.
The agency also is seeking a formal role in dictating the targets for the next two years and helping shape the future of the Renewable Fuel Standard, the 2005 law that compels refiners to use ethanol and soybean-based biodiesel. The White House was already reviewing a drafted EPA “RFS reset” rule that did not make broad changes to the program; however it could be a vehicle for more ambitious biofuel-blending requirements.
As top Trump administration officials weighed options this week, oil companies and their congressional allies made the case that such a shift could alienate refinery workers and voters in swing states the president won in 2016.
Rescinding the waivers is “likely to inflict far more political damage given the likely reaction of unions, political supporters and businesses in key battleground states like Pennsylvania and even Texas,” Scott Segal, a Bracewell lobbyist who works with refiners, said late Wednesday.
To contact the reporters on this story: Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net;Mario Parker in Chicago at mparker22@bloomberg.net
To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Steve Geimann
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