Biofuel impasse keeps stalling key nomination

Source: Marc Heller, E&E News reporter • Posted: Wednesday, February 7, 2018

Iowa Agriculture Secretary Bill Northey’s nomination to an undersecretary post at the Department of Agriculture doesn’t show any sign of breaking free from a holdup over biofuels policy, and Northey may have to decide soon whether to bow out.

The state filing deadline for candidates for agriculture secretary in Iowa — an elected position — is March 16. The election is in November, and a few candidates have emerged in case Northey doesn’t run again.

“Mr. Northey’s got a decision to make,” Senate Agriculture Chairman Pat Roberts (R-Kan.) said yesterday. “We need him here.”

Northey’s nomination sailed through committee months ago but is caught in a hold placed by Sen. Ted Cruz (R-Texas). He is President Trump’s choice for undersecretary for farm production and conservation (E&E Daily, Oct. 27, 2017).

That’s a critical post, Roberts said, as Congress prepares to write the 2018 farm bill amid low commodity prices and falling farm incomes.

Northey’s post isn’t related to ethanol, but he comes from the top ethanol state, which happens to be home to Sen. Chuck Grassley (R-Iowa), a senior member of the Agriculture Committee.

Grassley’s grandson, Pat Grassley, was reported last year to be interested in the state agriculture post but announced in January he’ll seek re-election to the Iowa House instead.

Roberts said he’s had a lengthy discussion with Cruz, who continues to push for a White House “summit” on fuel policy involving gas and oil interests as well as biofuel advocates. That’s not likely, Roberts said.

“What they want is not possible, and you carefully point that out to them, but they still insist on the hold. There you are,” Roberts said. “With all due respect to the biofuels industry and the oil and gas industry, I don’t think we’re going to have time for a summit on that.”

The administration has pressed for Senate action on agriculture nominees, including a plea by Agriculture Secretary Sonny Perdue earlier this week in a news release announcing an appointee to head the Rural Utilities Service.

The administrator of the Rural Utilities Service isn’t subject to confirmation. Still, USDA used the announcement to highlight the nominations in limbo — Northey, and Stephen Vaden for general counsel, a post he’s filling on an acting basis.

Roberts said Northey is “eminently qualified” for the undersecretary position. “It’s a damn shame it hasn’t moved before now,” he said.

The stalemate comes as dueling sides in the fuel industry argue about just how detrimental ethanol mandates are to petroleum refiners. Grassley’s office yesterday released a memo by policy staff contesting claims by Philadelphia Energy Solutions that the high cost of renewable fuel credits — called renewable identification numbers — is behind its recent bankrupty filing.

PES, owned by the Carlyle Group and a subsidiary of Energy Transfer Partners LP, operates one of the nation’s longest-running refineries in the city of Philadelphia.

The American Coalition for Ethanol cheered Grassley, saying in a news release, “RIN prices might be a politically convenient excuse for PES but the inconvenient truth is that other merchant refiners who adapted their business model to blend ethanol aren’t running to bankruptcy court for protection.

“It would be outrageous for Congress or EPA to reform the RFS based on the mismanagement of one east coast refiner,” the coalition said.

The Fueling American Jobs Coalition, representing refiners, responded in a statement.

“Given that independent refiners produce over half of America’s fuels, it is in everyone’s interest to find a solution that fixes the RFS in a way that enables both refining and biofuel production,” that coalition said.

“Attempts by corn-belt political staffers to ‘analyze’ the complex financial dynamics of the independent refining sector are cold comfort to those who show up at work every day to produce our country’s fuels,” the refiners group said. “It is high time for the corn-belt lobby to drop its Beltway tactics and work in earnest to resolve the current unsustainable approach to RFS implementation.”