Cruz struggles to win over senators in White House ethanol meeting

Source: By James Osborne, Houston Chronicle • Posted: Wednesday, February 28, 2018

  • Sen. Ted Cruz, R-Texas, speaks to members of the media near the Senate Chamber on Capitol Hill in Washington on Jan. 18, 2018. MUST CREDIT: Bloomberg photo by Zach Gibson. Photo: Zach Gibson / © 2018 Bloomberg Finance LP
Sen. Ted Cruz, R-Texas, speaks to members of the media near the Senate Chamber on Capitol Hill in Washington on Jan. 18, 2018. MUST CREDIT: Bloomberg photo by Zach Gibson.

WASHINGTON – Efforts by Sen. Ted. Cruz to negotiate a compromise with Midwestern senators on the federal government’s ethanol mandate appear to have hit a wall.

Following a meeting with Cruz and President Donald Trump at the White House, Sen. Chuck Grassley, R-Iowa, tweeted “no deal” and later disputed Cruz’s argument the biofuels compliance system – known as Renewable Identifications Numbers or RINs – was hurting oil refineries.

“We haven’t had any reputable economist say RINs was the most important problem,” Grassley said. “I pointed that out to the president today.”

Cruz is urging the Trump administration to place a price cap on RINs, through which the federal government tracks the usage of ethanol and other biofuels in a bid to cut cost for refineries around Houston and the country.

The Texas senator had been holding up Trump’s nominee for undersecretary of agriculture, Bill Northey of Iowa.  But Cruz removed that hold Tuesday in recognition of the Midwestern senators willingness to sit down with him and Trump.

“This morning, we had a very positive and productive meeting on fixing the broken RINs system,” Cruz said in a statement after the meeting. “I believe we are likely to arrive upon a win-win solution.”

Also at the meeting were Senators Joni Ernst, R-Iowa,, and Pat Toomey, R-Pa., along with EPA Administrator Scott Pruitt and Agriculture Secretary Sonny Perdue, according to sources briefed on the meeting.

RIN prices have credits have increased in recent years, raising billions of dollars in costs on refineries across the nation. Both Cruz and Sen. John Cornyn, R-Texas, the Senate Majority Whip, are working on prospective remedies in how the government administers the mandate biofuels are blended into the nation’s fuel supply.

With Cruz up for reelection in November, he is not expected to let up on an issue that is important to Texas’s powerful oil industry. Trump is expected to meet with ethanol producers at the White House later this week, Ernst said.

“I wouldn’t expect Senator Cruz to back off any position he has on any subject,” Grassley said.

Midwestern politicians are reluctant to make any fix, concerned it might reduce demand for a product upon which corn farmers in their states have made a good living since the Renewable Fuel Standard was created more than a decade ago.

“Any action that seeks to weaken the RFS for the benefit of a handful of refiners will, by extension, be borne on the backs of our farmers,” a coalition of farmers’ groups said.

Some political momentum for a bipartisan solution appeared this week when Sen. Tom Carper, D-Del., ranking member of the Senate Environment and Public Works Committee, told Politico he would support changes to the RIN market.

Such a move, he said, “would “not do harm to the Renewable Fuel Standard” but would “frankly help a number of refineries that are paying an arm and a leg for RINs when they never expected to do that,” according to Politico.