“That’s Chuck Grassley. Should I take the call? Klobuchar keynote ignites ABLC

March 2, 2018 |

In Washington, an unplanned on-stage telephone conversation between Senators Amy Klobuchar and Senator Charles Grassley of Iowa was the highlight of ABLC 2018 as high drama at the White House over biofuels policy turned for just one moment into side-splitting comedy.

“What happened with the biofuels meeting?” Klobuchar asked a small group of ABLC delegates as she arrived onto what has become informally known as the Trading Floor at ABLC’s main hub at Washington’s Mayflower Hotel — a long, narrow corridor where as many as 300 high-level delegates can be found horse-trading, renewing ties, and making connections over coffee.

“We were going to ask you the same question”, answered one of the ABLC delegates, who immediately began to swarm around the popular Minnesota senator when she began to make her way towards the ABLC main stage for her planned keynote address.

“You know, let me call Chuck,” she said, producing her smartphone and dialing.

She reached a Grassley aide who explained that the Iowa Senator was on another line and would call back.

Shortly afterwards, Klobuchar took the stage, and began her planned keynote, when her smartphone rang. She mischievously looked out at the ABLC delegates and asked.

“That’s Chuck Grassley. Should I take the call?”

The audience cheered loudly and encouraged her to pick up the phone.

“Hi Chuck,” she said, “So what happened in the meeting?” Grassley began to explain.

“Yes,” she explained. “Yes, well I’m on stage at the [ABLC] conference. Yes, I’m on stage right now, everyone is very appreciative of you.” She held the phone towards the delegates, who gave thunderous applause and loud cheers for the Iowa Senator who has been leading the fightback over the PES in recent weeks. “Yes, I’m speaking on the stage right now.”

“Uh, huh, uh huh,” said Klobuchar as she began to take notes, and one point gesturing comically for more silence from the buzzing crowd. “OK Chuck, OK, that’s great, yes I’m going to have to call you back.”

“So, there wasn’t any deal,” she said as she turned to the ABLC delegates. “They are going to do some studies to look into it, and then they’re going to meet again.” The crowd erupted into cheers that their cherished, if imperfect, Renewable Fuel Standard was not — for the time being — under immediate threat.

Klobuchar continued her keynote with her usual mix of light comedy on the foibles of Washington politics — relating polished stories about Chuck Schumer, Minnesota congressmen Collin Petersen and Melania Trump — mixed in with an authoritative recitative of recent biofuels politics and the evolution of policies. And she threw in strong words of support for the impact of the bioeconomy in her home state of Minnesota and the bipartisan activity of ag state senators for the industry on Capitol Hill — and the need to continually reach out to bring in allies from coastal and urbanized states.

By the end of her speech, she had won a standing ovation and a ragged chant of “Amy for President” broke out from some delegates near the left side of the ABLC’s main stage.

The moments of onstage comedy, however, did not lessen the seriousness with which the industry viewed the attacks in recent days on the Renewable Fuel Standard from a small group of merchant oil refiners — virulent enough to even attract a press release from the American Petroleum Institute discouraging a settlement excessively weighted towards the interests of these small refiners.

POET CEO Broin was apoplectic after the White House meeting.

“It’s clear from this conversation that another refinery bailout is more important to Sen. Cruz and the EPA than the economic crisis facing Midwest voters at the moment. Nothing new was discussed in this meeting. Removing accountability from oil companies would deprive millions of Americans the freedom to choose less expensive, homegrown biofuels and imperil countless jobs and family farms across America’s heartland. I want to thank the President for the opportunity to share the story of how our industry fuels the economic engine of the Midwest. In November, 119 counties there flipped Republican based on President Trump’s commitment to rural economic growth and strong support for the Renewable Fuel Standard. This issue will continue to play out. We will protect interests of this industry, farmers and consumers.” (Link to POET news)

“Both sides made their case and the only agreement was to look at economic studies for impact,” Grassley said in a statement released to media after the event. “No decisions were made. Low corn prices are already squeezing farmers’ bottom lines. If the RFS were undermined with a RIN price cap or waiver, that would be made even worse. Thousands of jobs in rural America could be lost. An emerging solution appears to be year-round E15, which would drive down RIN prices. After crossing the 15 billion gallon a year threshold, RIN prices would drop dramatically and remain low. And studies prove it.”

Reaction from ABLC

“It’s clear that refineries are trying to drive a wedge between President Trump and farm families,” said ABBC executive director Brooke Coleman, one of the on-stage participants in the Domestic Policy Forum. “They plan to keep pushing a RIN cap that would throw the RFS into chaos and destroy any hope of revitalizing farm income under the Trump administration. That’s not going to happen, but the President seemed to fully appreciate how easily lifting regulations on E15 sales could pour RINs into the market, which promotes growth on all sides. That is what rural America wants to see, and the president is going to keep hearing it in every conversation with those who care about farm families and workers at over 200 biorefineries coast-to-coast.” (Link to ABBC news)

“We are grateful to the President for giving Growth Energy’s board members an opportunity to set the record straight,” said Growth Energy CEO Emily Skor, “about the importance of biofuels to our economy and the livelihood of America’s hard-working farmers. The President very clearly understands that the path forward is to allow sales of E15 year-round, promote growth, and put more RINs on the market. The RFS gives homegrown biofuels a chance to compete at the pump, helping to protect consumers from price manipulation and support hundreds of thousands of jobs across the heartland.

Reaction from the fuel retail sphere

At major fuel retailers, Sheetz, executive vice president Mike Lorenz said, “Retailers want to offer our customers options, including lower-cost, higher-octane ethanol blends. An RVP waiver lifts needless regulations on retailers, generates growth opportunities for American farmers, and makes more RINs available to refiners. The President is looking for a solution that is a win for everyone – farmers, refiners, and consumers – and I think being able to sell E15 year-round meets that goal.”

The issue backstory

At stake was an update on a White House meeting between President Trump, a number of small merchant oil refineries and two of the largest ethanol producers in the US, Poet and Green Plains, over a protracted dispute about the impact of high ethanol RIN prices, under the US Renewable Fuel Standard, on merchant refinery economics.

In recent weeks, Philadelphia-area refinery PES had filed for bankruptcy, citing the impact of RIN prices — an analysis hotly contested by the biofuels industry and national media reporting on the refinery owner’s asset management strategy. (More on the PES dispute here).

The Big Oil vs biofuels drama sharply escalated last week when the White House hosted a meeting between Senator Crus of Texas, Senator Toomey of Pennsylvania, and Senators Grassley and Ernst of Iowa — aimed at brokering a deal on RFS reform.

After talks quickly stalled, Trump asked to meet directly with industry leaders — and it was the 2pm meeting set for Thursday that dominated the morning discussions on the ABLC stage. Coincidentally, ABLC’s Thursday agenda opened with the annual Domestic Policy Forum featuring the heads of the Advanced Biofuels Association, Growth Energy, the National Biodiesel Board, the Advanced Biofuels Business Council and the Industrial & Environmental section of BIO. — and interest in the outcome of the White House meeting had been running at a fever pitch.

The real story on PES’ bankruptcy

Joelle Simonpietri ignited a media storm when she published this analysis in the Digest.

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