Former Trump energy adviser sees no easy fix on Renewable Fuel Standard reform

Washington (Platts)--21 Feb 2018 1107 am EST/1607 GMT

Reforming the US biofuel mandate will be tricky and will likely have to be done by Congress, not by the Trump administration, according to a recent top energy adviser to the White House.

"I don't see an easy regulatory fix. I think it's going to have to come from [Capitol] Hill, and that's going to be tough," George David Banks said in an interview with Platts Capitol Crude that aired Wednesday.

Banks stepped down as White House special assistant at the National Economic Council and National Security Council last week after he was denied a permanent security clearance due to past marijuana use.

Calls to reform the Renewable Fuel Standard have increased after the January bankruptcy filing of refiner Philadelphia Energy Solutions, which blamed rising compliance costs for its financial troubles.

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Senator Ted Cruz, Republican-Texas, is expected to criticize the policy later Wednesday at an event at the Philadelphia refinery. He has proposed capping renewable credit prices at 10 cents to make the program less of a burden on refiners.

Banks called the RFS "one of the most complicated issues that we have on the energy front." And yet special interest groups are fighting over a "very, very, very small percentage" of ethanol in the fuel supply, he said.

"If you didn't have the mandate, 90-plus% of the ethanol that's currently blended would still be blended," Banks said. "Folks are really fighting over a very small percentage of what's out there in the market."

Banks said the corn ethanol industry should be worried about what happens to the program in 2022, when the Environmental Protection Agency gets broad discretion over it.

"It turns into an EPA-run program, where EPA can just kind of make it up. I think that's dangerous," he said.

The RFS requires refiners and importers to blend 19.29 billion gallons of renewable fuel into the US transportation fuel supply in 2018, including an implied 15 billion gallons of conventional ethanol.

Part one of the podcast:
Part two:

--Meghan Gordon,
--Brian Scheid,
--Edited by Maurice Geller,

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