Senator: The White House Will Not Ban Diesel Exports
Senator Ted Cruz informed refining industry leaders late Friday that he had received assurances from the White House that the administration of U.S. President Donald Trump would not ban American diesel exports.
Cruz’s message, according to individuals familiar with the matter who requested anonymity because the conversation was private, comes as the administration considers options to lower diesel prices amid a historic surge in fuel costs.
Earlier this week, Trump said he had directed his staff to study a potential ban on U.S. diesel exports, after lawmakers representing rural areas and agricultural states called for restrictions to curb retail prices, which reached $6.53 per gallon for the first time ever earlier this week.
The president wants lower prices at gas stations and is considering all available options, according to a White House official. Cruz’s representatives and the American Petroleum Institute, which organized the meeting, did not immediately respond to requests for comment.
These assurances align with messages conveyed by some of Trump’s senior aides over several months, who have consistently warned that restricting diesel exports would ultimately do more harm than good.
Nevertheless, Trump has shown he can sometimes take unpredictable positions and adopt unconventional measures without full backing from his senior aides. He holds the final decision on this matter.
Cruz, a Republican from Texas, said he received assurances from the White House, not specifically from the president. The individuals added that he did not provide further details about who ruled out an export ban.
Trump and his administration officials have not settled on a single approach, as they continue to analyze the economic impact of a potential short-term ban on diesel exports and are exploring other steps to curb costs. Among the ideas under consideration is lifting restrictions on the sale of red-dyed diesel, a fuel typically designated for off-road use.
In practice, this could amount to suspending certain production taxes on diesel, including a federal tax of about 24 cents per gallon, since red diesel, commonly used by farmers and other off-road consumers, is tax-exempt.
Under an approach that allows broader use of red diesel on and off public roads, diesel buyers could dye the fuel and use it on highways without paying taxes.
Industry representatives also proposed that the administration exempt red diesel from a federal biofuel blending program known as the Renewable Fuel Standard, according to some individuals. According to some industry estimates, excluding red diesel from the production volumes used to calculate biofuel blending quotas imposed on each refinery, and allowing farmers to purchase the exempt fuel, could lower the price by 30 cents per gallon.
Energy Secretary Chris Wright confirmed this week that the administration is not seeking to impose a comprehensive export ban, and instead encouraged the industry to make voluntary changes to increase diesel supplies.
Wright said in a live conversation hosted by Heatmap on Wednesday: “We are not going to stop U.S. diesel exports, but can we make some adjustments to the flow of diesel from U.S. refineries? I think we will see that, because it could stop the rise in diesel prices.” He added, “Will we make adjustments related to diesel? I think so. But no, I don’t think you will see a comprehensive ban on diesel.”
