Methane rule’s repeal said to hit snag in Senate

A top oil industry priority on Capitol Hill may fall victim to an unrelated dispute over ethanol.

At stake is an Interior Department rule forcing energy companies to curb emissions of methane escaping from wells and pipelines on public land. Senate Republican leaders say they are close to getting the 51 votes they need to overturn that Obama-era regulation using expedited repeal procedures under the Congressional Review Act.

But now, with a deadline about a week away, that campaign is on the verge of capsizing.

Four Midwest Republicans, including Sens. Chuck Grassley of Iowa and John Thune of South Dakota, told Senate leaders the price for their votes for the methane measure is a change in ethanol policy, according to people familiar with the talks who spoke anonymously.

The lawmakers demanded that the measure, which would free up use of higher blends of ethanol, be included in the $1.1 trillion omnibus spending bill set to advance this week. It wasn’t. Ethanol advocates want the Environmental Protection Agency or Congress to waive rules that restrict gasoline blends containing more than 10 percent ethanol from sales in summer months. Such a waiver already applies to gasoline containing 10 percent ethanol, but not higher ethanol blends — effectively barring their sale from June 1 until Sept. 15 in some areas when smog is a problem.

The issue is a top priority for biofuel producers such as POET, and industry trade groups. Advocates of the change have asked EPA Administrator Scott Pruitt to unilaterally issue a waiver and advanced legislation to make the shift. Including it in the must-pass spending bill would ensure it makes it through Congress and is signed into law.

But ethanol supporters are asking Republican leaders for a commitment to put the ethanol provision on a must-pass bill later, according to one person familiar with the discussions.