Fuels

QuikTrip Takes RFS Fight to Washington

Chain hires lobbyists with Pruitt ties to fight point-of-obligation shift

TULSA, Okla. -- QuikTrip Corp. has hired a lobbying firm with ties to Environmental Protection Agency (EPA) administrator Scott Pruitt to represent the convenience-store chain on matters related to the Renewable Fuel Standard (RFS)—including the potential shift in the point of obligation to meet those standards.

According to reports in The Hill and Greenwire, Oklahoma City-based lobbying firm Coffee Group recently registered to represent QuikTrip on RFS issues. The firm’s founder, Glenn Coffee, served as a state senator alongside Pruitt in the Oklahoma legislature from 1999 to 2011; Pruitt went on to become state attorney general and Coffee the secretary of state. Meanwhile, Coffee's associate Crystal Coon was Pruitt’s chief of staff and advised his state re-election campaign in 2015 and 2016.

Tulsa, Okla.-based QuikTrip has its own connections to Coffee. Mike Thornbrugh, manager of public and government affairs for the 740-store chain, served in the Oklahoma House as a representative at the same time Coffee served in the Senate.

“I’ve known Glenn for over 30 years, and he knows QuikTrip very, very well,” Thornbrugh told CSP Daily News. “We’ve always been looking at some point to expand [lobbying] to the federal level, and he’s the first guy we looked at.”

QuikTrip hired Coffee Group after news broke in late February that the Trump administration was reportedly considering an executive order to direct the EPA to move the point of obligation, which currently rests with refiners and importers, downstream to fuel blenders, which would include some retailers. Obligated parties such as refiners buy Renewable Identification Numbers (RIN) from blenders such as QuikTrip to meet their volume obligations under the RFS. Last year, CVR Refining and Valero Energy filed petitions with the EPA seeking to shift the point of obligation downstream to blenders, after RIN prices hit multiyear highs and ate into their profits.

The plan was said to be the result of an agreement between Carl Icahn, who serves as a special regulatory adviser to President Trump and owns a majority stake in CVR Refining, and Bob Dinneen, the Renewable Fuels Association's (RFA) president and CEO. The White House since denied that an executive order was pending. But Dinneen insisted that Icahn told him that Trump was “supportive” of the move, and described the decision to move the point of obligation as “not negotiable,” according to Reuters.

While declining to say how much QuikTrip has earned from selling RINs, Thornbrugh said, “It allows us to pass that savings on to the consumer, and that’s what we do.”

The chain has long been active in opposing a shift in the point of obligation. Last summer, it hired Steptoe & Johnson LLP, the same firm that represents NACS, SIGMA and many other industry groups, to represent its own RFS concerns. It also sent two letters to the EPA as the agency was considering the petitions and after it proposed to deny them, urging it to keep the point of obligation where it currently sits.

Meanwhile, the chain has been working alongside several diverse industry groups in fighting the change. These include NACS, SIGMA, NATSO, the American Petroleum Institute, the Association of American Railroads and ethanol-industry group Growth Energy.

“It’s a heck of a fight," said Thornbrugh. "If you look at all the groups we’re part of … that type of coalition is unheard of in Washington, D.C."

QuikTrip is fighting the move “for the simple fact that, if it is granted, all it's going to do is increase the cost of motor fuel to the consumer, and we don’t think that’s right,” said Thornbrugh.

Despite the chaotic nature of last February's news of a potential deal on shifting the point of obligation, “We take it seriously and do what we can do,” said Thornbrugh. “We believe if EPA is left to their own devices, they’re going to deny it again, just like they did a couple of months ago. … I have no idea how Icahn and others are going to change EPA’s thinking where they’ve denied this thing twice.”

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