Dinneen: 'Ethanol Strong'

Trump Tax, Regulatory Changes Lauded

Bob Dinneen said tax, regulatory reform and an America-first trade policy are helping ethanol and the rest of the economy. (Photo by Todd Neeley)

SAN ANTONIO (DTN) -- With the national media embroiled in the latest scandal of the day in Washington, D.C., Renewable Fuels Association President and Chief Executive Officer Bob Dinneen said a good story has been unfolding across the country.

Addressing an ethanol industry audience at the National Ethanol Conference in San Antonio on Tuesday, Dinneen said President Donald Trump hasn't received enough credit for the work he's done to help the economy during the past year, including the ethanol industry.

The tax reform bill has "provided a jolt" to American industry, Dinneen said. Regulatory reform is "empowering the entrepreneurial spirit" of American business. America-first trade policies, he said, will create new international market opportunities and create jobs.

"And perhaps most importantly, because it is happening despite, not because of Washington, innovators like the people in this room are embracing the technologies and market strategies that will drive the world's more sustainable energy future," he said.

Despite calls from some Washington lawmakers, petroleum interests and even U.S. Environmental Protection Agency Administrator Scott Pruitt to reform the Renewable Fuel Standard, Dinneen said the ethanol industry has to be able to build its markets.

"We cannot allow demand destruction to be the cornerstone of RFS discussions," Dinneen said. "We must assure that an opportunity for growth in renewable fuels is understood as an immutable pillar for any future energy policy conversation."

He commended Pruitt for comments he made during the past year that perhaps expanding corn ethanol's role in the RFS makes sense. Though Dinneen said the state of the ethanol industry is strong, there is a need to continue to press the Trump administration to allow year-round sales of E15. Doing so, the ethanol industry has argued, will help ease concerns of costs to comply with the RFS by flooding the market with more biofuels credits.

What's more, E15 would create additional room to expand commercial cellulosic ethanol production.

"Removing that regulatory barrier was an important tenet of the president's commitment to the farmers across America who helped elect him," he said.

In addition, Dinneen called for an end to "the scourge of protectionism" and building up "free and fair biofuels trade" around the world.

"Ultimately, we must change the narrative about renewable fuels so they are not viewed with cynicism and derision by key influencers and decision-makers," he said.

One year ago at the national conference in San Diego, Dinneen said the ethanol and petroleum industries need to have a "constructive dialogue" about the future of energy.

Instead, during the past year petroleum interests have stepped up efforts to make major changes to the RFS through the EPA's waiver process. That includes a growing number of small refiners who have requested waivers of their ethanol blending obligations based on costs.

"I still believe dialogue is preferable to dysfunction," he said.

"If liquid transportation fuels don't find a pathway to mutual growth, electric vehicles will increasingly displace us both, and the consumer will miss out on the economic, convenience, and environmental benefits our fuel offers every day."

REFORM TALK

In a television appearance in recent weeks, EPA's Pruitt essentially called for reform of the renewable identification numbers, or RINs, portion of the RFS. Ethanol groups say altering the biofuels credits program essentially would spell the end of the RFS.

East Coast refiner Philadelphia Energy Solutions filed for Chapter 11 bankruptcy protection in recent weeks, pointing to its inability to keep up with the costs of RINs. Since then, biofuels groups, federal lawmakers and others have said the refiner is in financial jeopardy for a number of other reasons. On Monday, PES responded to criticism in a statement to the press, http://bit.ly/….

Dinneen took the occasion of his speech to repeat the RFA's criticisms of the refiner.

"The refinery has antiquated technology and is captive to more expensive Brent crude oil imports, because the elimination of the oil export ban and the new Dakota Access pipeline have cut off its supply of Bakken crude," he said.

"But it's so much more expedient to blame ethanol. The financial problems of this refinery are legion."

Dinneen said talk of RFS reform based on helping the "poor small refiners" has yet to gain traction.

Each time calls for reform are made, ethanol industry officials point to academic studies from MIT, Harvard University, University of Michigan and others that show the costs of buying RINs are passed on to consumers at the pump.

"If Scott Pruitt doesn't want to trust Harvard and MIT, he could turn to his own agency," Dinneen said.

In EPA's final 2017 RFS rule setting biofuels volumes, EPA said refiners and other obligated parties recover the cost of biofuels credits through higher petroleum prices.

"There is no reason for the ethanol industry or its champions in Washington to accept demand destruction as a necessary or legal path to the future to accommodate the failed business plans of a few independent refiners," Dinneen said.

The Trump administration's America-first trade policy he said has been "a refreshing change from previous administrations of both parties." Dinneen said previous administrations have been "too often accommodating of foreign trade barriers" and reluctant to challenge them.

"We are optimistic that the tide of protectionism will soon ebb, and a new period of fair and free biofuels trade will create increased demand here and relief at the pump for those consumers currently being denied access to the lowest cost ethanol in the world," he said.

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

Follow him on Twitter @toddneeleyDTN

(CC/BAS)