December 8, 2017 / 10:02 PM / in 6 months

White House pressures Big Corn to meet on U.S. biofuels policy

(Reuters) - President Donald Trump’s administration called two lawmakers from the U.S. corn belt to convince them to join talks about potential changes to biofuels policy to ease the burden on oil refineries, according to a spokesman for one of the lawmakers and a source briefed on the matter.

FILE PHOTO - Sen. Chuck Grassley speaks with reporters ahead of votes on Capitol Hill in Washington, U.S., December 6, 2017. REUTERS/Aaron P. Bernstein

The effort is the clearest sign yet Trump is seeking to mediate the long-running dispute between the U.S. oil industry and corn growers over the Renewable Fuel Standard (RFS), a law requiring refiners to blend increasing volumes of biofuels like corn-based ethanol every year into the nation’s fuels.

Refiners say the law is putting them out of business, but ethanol interests have vehemently opposed any changes.

White House Chief of Staff General John Kelly on Thursday called Republican Senator Chuck Grassley of corn-growing state Iowa - a leading supporter of the biofuels industry - to discuss the possibility of a meeting, Grassley’s office told Reuters on Friday.

And Agriculture Secretary Sonny Perdue called Republican Senator Joni Ernst, also of Iowa, on the issue, a source briefed on the matter told Reuters, asking not to be named.

Trump and senior cabinet officials met with nine Republican senators from states with oil refineries on Thursday, including Ted Cruz of Texas. Some of the senators said after the meeting that Trump was interested in having all sides on the issue work together toward a solution.

A spokesman for Grassley’s office said that Grassley “would of course meet with any senator who requests a meeting.”

The spokesman, Michael Zona, added that Kelly, in his call to Grassley, “reiterated the president’s unwavering commitment to ethanol, the RFS and Midwestern farmers.”

Officials in Ernst’s office and at the White House did not respond to a request for comment.

FILE PHOTO - Republican U.S. Senator Joni Ernst speaks to reporters at Big Barn Harley Davidson before the Joni Ernst’s 3rd Annual Roast and Ride in Des Moines, Iowa, U.S., June 3, 2017. REUTERS/Brian C. Frank

A new meeting could be scheduled as early as next week, according to the source briefed on the matter.

The talks could lay the groundwork for potential future legislation to overhaul the RFS program, but would require co-operation from representatives of the corn industry to pass Congress.

The RFS was introduced more than a decade ago by President George W. Bush as a way to boost U.S. agriculture, slash energy imports and cut emissions, and has since fostered a market for ethanol amounting to 15 billion gallons a year.

Refiners oppose the RFS because they say it costs them hundreds of millions of dollars a year in blending and regulatory expenses, while propping up demand for rival fuels.

The industry has requested tweaks to the policy in the past that would cut the annual volume targets for biofuels, allow ethanol exports to be counted against those targets, or shift the blending burden to supply terminals from refiners.

But the Trump administration has ruled in favor of Big Corn and against the refining industry in a series of decisions this year.

Last month, the Environmental Protection Agency, the regulator which administers the RFS, slightly increased biofuels volumes targets for 2018.

Senators on both sides of the debate have used parliamentary procedures like holds on administrative appointments to punish rivals.

For example, Cruz has said he would block Iowa Agriculture Secretary Bill Northey’s nomination to a key post at the U.S. Department of Agriculture until he gets a meeting about a biofuels compromise that includes all sides.

Reporting by Richard Valdmanis in Boston and Jarrett Renshaw in New York, Editing by Rosalba O'Brien

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