Cruz decries ‘nuts’ biofuel mandates in refinery rally

Source: Marc Heller, E&E News reporter • Posted: Thursday, February 22, 2018

Texas Republican Sen. Ted Cruz took his campaign against ethanol mandates to the struggling Philadelphia Energy Solutions Inc. refinery today, telling workers he still sees a “win-win solution” that could ease rules on refineries without hurting corn growers.

“You should have a federal government that’s standing with you rather than fighting against you,” Cruz said at a rally, sponsored by the company as it seeks bankruptcy protection.

Cruz didn’t offer new insight on what solution would benefit all sides in the debate, but he repeated themes he’s previously pushed, including capping the price of renewable fuel credits and ultimately dismantling the renewable fuel standard that requires mixing ethanol into the nation’s fuel supply.

Both of those ideas have fallen flat with corn-state lawmakers and other supporters of the RFS, and the Trump administration has said it intends to keep the mandate in place.

Cruz’s appearance, announced earlier this week, stirred lobbying organizations on both sides of the fight. Advocates for PES repeated the company’s position that high prices for renewable fuel credits, or renewable identification numbers (RINs), drove it into financial duress.

But pro-ethanol groups say the refinery’s troubles are more fundamental, citing a report from Reuters that PES was forced to pay its owner-investors tens of millions of dollars a year for access to a rail terminal — regardless of whether oil flowed there.

Ethanol advocates say the Reuters report, gleaned from the company’s bankruptcy papers in federal court, is one piece of a puzzle suggesting poor operations, not ethanol mandates, were to blame for PES’s financial troubles. The refinery, which employs around 1,000, continues to run while the company rearranges its finances.

But Cruz remained focused on the RFS, saying the refinery had to pay twice as much for renewable fuel credits — $218 million — as on payroll.

“It doesn’t make any sense. It’s nuts,” Cruz said.

At the rally, Cruz said he’s encouraging talks between key lawmakers and the White House, and he pointed to his own relationship with President Trump, which he said is good despite their rivalry during the Republican presidential primaries in 2016.

So far, Cruz hasn’t convinced the president to change course on the RFS, although U.S. EPA Administrator Scott Pruitt has said he agrees the system of RINs needs a closer look.

Cruz said he’s not asking Trump to backtrack on the RFS but to focus on RINs because no one envisioned prices skyrocketing from a few pennies each to more than a dollar each.

He also said more ethanol would be produced, and farmers would be better off, if the mandate were eliminated and market forces took hold.

“We’re making real progress,” Cruz said, at the same time accusing ethanol advocates such as Sen. Chuck Grassley (R-Iowa) and pro-ethanol lobbying groups of not being willing to engage. “They don’t have to be part of the conversation,” Cruz said. “We’ll solve it without them.”

A trade group for the ethanol industry, Growth Energy, said Cruz was mischaracterizing the RFS.

“Ted Cruz seems more interested in the spotlight than facts,” Growth Energy CEO Emily Skor said in a statement. “If Mr. Cruz cared about jobs, he would support workers in the heartland who produce America’s home-grown energy and stop spreading falsehoods about the RFS.”