White House: No RFS Executive Order

OMAHA (DTN) -- There continues to be no executive order pending on possible changes to the Renewable Fuel Standard, White House spokesperson Kelly A. Love told DTN Thursday.

In addition, it remains uncertain whether actual negotiations are taking place between biofuels interests, the White House and energy billionaire Carl Icahn, as DTN and other news services reported earlier this week.

Despite reports that a number of biofuel interest groups and coalitions including Fuels America and Icahn have been in deliberations with the White House on potential changes to the RFS, Fuels America told DTN Thursday the group was not at the White House for that reason.

Bloomberg originally reported Wednesday that Icahn, Fuels America and other parties were part of discussions being held with the White House about possible changes to the point of obligation in the RFS.

Fuels America, which is a coalition of biofuels groups and agriculture companies including Growth Energy, the American Coalition for Ethanol, Poet, Archer Daniels Midland, National Corn Growers Association, Monsanto, DuPont and others, told DTN Thursday night the group was at the White House as part of a previously scheduled meeting.

"Fuels America had a meeting with NEC (National Economic Council) that was arranged well before reports about an EO (executive order) surfaced," the coalition said in a statement.

"It was an introduction to the coalition. Our only communication with the administration has been to reinforce our opposition to any change -- including a shift in the point of obligation -- to the RFS. We also expressed our appreciation to the White House for making it clear that no such order is being developed. Our members are united against any change to the point of obligation."

Earlier this week, the Renewable Fuels Association said it had been in contact with an administration representative and was told an executive order was in the works to change the point of obligation from gasoline refiners to retailers.

The RFA said this week it continues to oppose a change but wanted to be sure such an order also would include lifting a key restriction on the use of E15 in the summer months. The expansion of E15 is seen as vital to growing ethanol markets, as well as corn markets for farmers who provide feedstocks to ethanol plants.

A number of agriculture and ethanol groups objected to what they perceived as a deal being struck by the RFA and the White House, to change the point of obligation.

An RFA spokesperson told DTN earlier this week that to characterize the proposed change to the regulation as a deal would be inaccurate.

"We were told the point-of-obligation change was going to happen, whether we were involved or not," RFA Communication Director Rachel Gantz told DTN. "We wanted to make sure E15 RVP parity was addressed."

On Tuesday, Fuels America announced it had severed ties with the RFA as a result of the rumored deal between RFA and the White House.

Groups that support the point-of-obligation switch claim that obligating blenders would spread compliance costs through the renewable identification number, or RIN, market. That market is designed to allow obligated parties to show compliance with the law by buying either physical gallons or the credits attached to actual gallons produced.

In the past, the U.S. Environmental Protection Agency has opposed the point of obligation because it would make the Renewable Fuel Standard more complex by expanding the number of companies required to comply from hundreds to potentially more than 1,000.

LEGISLATION WOULD EXPAND RVP WAIVER

For years, the ethanol industry has called on the EPA to equalize the Reid vapor pressure, or RVP, regulations for E10 and E15 during the summer driving season. Because of those requirements, E15 has largely not been available to some wholesale suppliers and retailers during the summer. The industry has contended that adding 5% more ethanol in the summer would actually reduce tailpipe emissions.

This week, U.S. Sens. Deb Fischer, R-Neb.; Joe Donnelly, D-Ind.; and Charles Grassley, R-Iowa, introduced legislation to extend the RVP waiver to ethanol blends above E10. In the House, Reps. Dave Loebsack, D-Iowa, and Adrian Smith, R-Neb., introduced similar legislation.

Ethanol increases the RVP, which measures the release of volatile organic compounds into the atmosphere. The RVP for gasoline is the lowest, or most stringent, during the summer months when the weather is hot. E10 currently receives an RVP waiver, which keeps the fuel in compliance with RVP requirements year-round. However, E15 is not given the same waiver, so it can't be sold in the summer.

The EPA regulates RVP for gasoline and gasoline-ethanol blended from June 1 to Sept. 15, restricting the retail sale of ethanol blends above E10.

According to Growth Energy E15 currently is sold at 650 locations in 28 states.

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(AG/ES)

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