RFS Meetings on RIN Issue Pose Great Threat to Ethanol

Kansas Corn’s Dennis McNinch, right, talked to Ag Secretary Sonny Perdue at Commodity Classic trade show. Corn growers pushed Secretary Perdue to support the Renewable Fuels Standard.

Kansas Corn continues to be engaged on the RFS issue that surfaced during last week’s Commodity Classic in Anaheim, CA. Many of our growers have spoken out about the meetings being held with the Trump administration that would have an extremely negative impact on ethanol and the Renewable Fuel Standard.  Simply put, Texas Senator Ted Cruz and oil refiners want President Trump to go back on his promise to support ethanol in the Renewable Fuel Standard. On Wednesday, Ag Secretary Sonny Perdue told the farmers at the Commodity Classic that he and President Trump stand with the RFS. However, the administration held another meeting Thursday to discuss the issue of capping RINS in the RFS. This is the biggest challenge to the RFS in years.  Corn growers are having a busy week as the Administration floats ideas regarding key components of the RFS.

NCGA and KCGA leaders and members were are actively engaged at the Commodity Classic on this issue, and continue to be involved. Here are some of the actions that have been taken.
  • NCGA wrote a letter to the President outlining our concerns about proposed changes to the RFS.  We were able to get the American Soybeans Association, the National Wheat Growers Association, National Sorghum Producers Association, the National Farmers Union and the American Farm Bureau Federation to join us in signing the letter.
  • On Monday, we asked growers attending the Issues Briefing at Classic to contact their members of Congress about this situation and to express support for the RFS.  We also asked growers to use social media with the hashtag #rfsworks. We appreciate the many growers who made those calls and posted on social media.
  • President Skunes and CEO Chris Novak had a short discussion about the RFS with Secretary Perdue before the Secretary addressed the General Session of Commodity Classic. NCGA leaders will attend a breakfast with Secretary Perdue today to continue this discussion.
  • We have been monitoring the situation around the White House meeting that occurred yesterday in Washington.  We have been in regular contact with Senators Grassley and Ernst (our champions) who attended the meeting.  We are also following closely the meeting scheduled for today at the White House.
  • On Thursday, at Corn Congress at the Commodity Classic, Kansas delegates joined growers from across the nation to support a resolution on the issue here
  • In addition to NCGA meetins with Secretary Purdue, some Kansas Corn members leaders had an opportunity to voice their concerns to Secretary of Agriculture Sonny Perdue at the Commodity Classic trade show.
  •  KCGA and other state corn associations will continue to coordinate with NCGA on this issue.
For more information on this issue, visit our RFS resource page on our kscorn.com website here.
Talking Points:
  • The RFS works – RINs are the market mechanism that drives blending to obligated levels. Any cap or other manipulation would disrupt that mechanism and diminish the related incentive to blend – a 10 cent RIN cap would lock the market into an E10 ceiling or lower, by substantially reducing the incentive for higher blends. If the economics aren’t there, volume targets will not be met.
  • Increasing ethanol use is important – Blending more homegrown biofuels like ethanol into gasoline lowers the cost to consumers, provides cleaner air, increases our U.S. energy independence, provides nearly 360,000 industry jobs, and helps grind more corn – (ethanol accounted for 30% of total corn demand in 2017).
  • RVP waiver is the best fix – Allowing the RIN market to operate freely with year-round sales of E15 would increase the production and consumption of ethanol, increase the supply of RINs available for compliance and LOWER RIN prices. Farmers don’t want high RIN prices – we want higher blends!