Oil state lawmakers target ethanol
Cruz and others push for Trump to alter the U.S. biofuel mandate, saying energy jobs are at stake
WASHINGTON — Texas politicians are increasing pressure on President Donald Trump to pull back a federal ethanol mandate created to reduce the nation’s thirst for oil.
Sen. Ted Cruz, R-Texas, and other Republican senators met with the president on Thursday to discuss altering the mandate, after the Environmental Protection Agency said earlier this year that it would slightly increase the amount biofuel that must be blended into gasoline for 2018 and would not make changes to the program long sought by Republicans from oil-rich states.
In a letter in late October, Cruz and eight other Republican senators, including Sen. John Cornyn, R-Texas, and Sen. James Inhofe, R-Okla., asked Trump to meet so they could “discuss a pathway forward toward a mutually agreeable solution” on the biofuel mandate, known as the renewable fuel standard.
“If your administration does not make ad-
justments or reforms on matters related to the renewable fuel standard,” the senators said in the letter, “it will result in a loss of jobs around the country, particularly in our states.”
At Thursday’s meeting were Trump, Chief of Staff John Kelly, EPA chief Scott Pruitt, Agriculture Secretary Sonny Perdue, Deputy Energy Secretary Dan Brouillette and Trump economic adviser Gary Cohn, as well as 11 senators, including Cruz and Cornyn.
Trump is “aware that workers in the refining sector believe the program isn’t working as intended,” a White House spokesman said. “He will listen to the concerns of senators who represent these workers, with the hope of finding common ground.”
During the meeting, Trump encouraged senators to find a solution that was “win-win” for refineries, biofuels producers and consumers, a lobbyist briefed on the meeting said.
“We had a productive meeting today with the president to discuss how to fix the compliance problem in a way that protects both refinery workers and corn farmers,” Cruz and other senators said in a statement.
An aide to Cornyn said the senator was “working hard to unify all stakeholders in a consensus effort to reform” the biofuel program.
For Cruz, the debate over ethanol comes as he gears up for next year’s election, in which he is being challenged by Rep. Beto O’Rourke, D-El Paso.
Cruz is considered a strong frontrunner in that race, but as he prepares for his campaign he has been a more regular presence in Texas, with frequent public events and meetings in recent weeks with Houston Mayor Sylvester Turner and the Texas Farm Bureau. The meeting at the White House came after Cruz and Sen. Jeff Flake, R-Ariz., blocked a confirmation vote in the Senate on Bill Northey, Trump’s nominee to be a undersecretary of agriculture.
But the White House faces opposing pressure from politicians in the Midwest, a region for which the mandate, enacted more than a decade ago, has created an economic boom through increased demand for corn, the principal source of ethanol in this country. Earlier this week Sen. Chuck Grassley, R-Iowa, downplayed the White House meeting with Cruz, telling the Des Moines Register, “the president keeps doing what he’s told the voters of Iowa, me and Sen. Ernst so many times — that he supports ethanol.”
Sen. Joni Ernst is Iowa’s junior U.S. senator.
Ethanol represents 10 percent of the nation’s motor fuel supply, and refiners in and around the Houston area have long complained not only about the loss of demand for gasoline, but the cost of buying the Renewable Identification Numbers — or RINs — that are required by Washington.
The EPA assigns RINs to individual batches of biofuels, to ensure they are being added to the fuel supply. For those refineries that don’t blend ethanol themselves, they must buy RINs, which are traded in financial markets.
The cost of RINs has fluctuated dramatically in recent years. Earlier this month, Texas Gov. Greg Abbott wrote to Pruitt, asking for a waiver from the mandate for Texas. “The escalating and unjustified RINs prices are creating a severe economic hardship for refiners, small retailers, consumers, skilled labor and others,” Abbott wrote. “The strength and resiliency of the industry and by extension, Texas’ economy — is threatened by a restrictive federal mandate.”