Resist harmful ethanol mandates, refining executives urge Trump

Three US refining executives called on US President Donald Trump to avoid ethanol policies that potentially could harm US oil products production. Suggestions by agribusiness interests that small refiner exemptions (SRE) have destroyed demand for ethanol are “simply untrue,” the presidents of Valero Energy Corp., Marathon Petroleum Corp., and Flint Hills Resources LP jointly declared in their Aug. 28 letter to the president.

“As your [Environmental Protection Agency] continues its implementation of the [federal Renewable Fuel Standard], it is vitally important that any decisions be based on accurate information and that any potential ‘solutions’ ensure that the US liquid fuels industry remains the dominant force in the global market,” Joseph R. Gorder of Valero, Gary R. Heminger of Marathon, and Jeff Ramsey of Flint Hills told Trump.

They said that assertions by agribusiness interests that EPA’s use of SREs have undermined US ethanol demand are simply untrue. Publicly available data from the US Energy Information Administration, private data services, the US Department of Energy, and EPA all have concluded that this is not the case, the executives said.

“The fixes that are being suggested by the US Department of Agriculture and the biofuels community that would raise the conventional biofuel mandate will do nothing to increase domestic ethanol usage, but will only give incentives for more imported biodiesel,” they warned.

They conceded that the US ethanol market has faced challenges in the past year from an oversupplied market, continuing global trade disputes, and historic flooding in the US Midwest.

“All of these issues are real for our industry and have led some companies to update their operations to reflect market conditions,” the executives said. “Those choices are always difficult however, the solution is not to blame a phantom menace—the SREs—and to impose policies that damage the other critical parts of our liquid fuels industry with no discernible benefit for ethanol producers or farmers,” they maintained.

“Lastly, despite claims from agribusiness interests, the corn ethanol industry has matured past the point where its opportunities and challenges are dependent on RFS mandates,” they said. “Corn ethanol is a mature product and a critical low-cost source of octane for the gasoline that our economy relies upon.

“Continued pressure by some to unrealistically increase blending requirements in the annual Renewable Volume Obligation rulemaking or through the statutorily prescribed RFS ‘reset’ ignores the real accomplishment our industry has made over the years to produce a product that can thrive in a free and open global market,” the executives said.