Ted Cruz pressures Iowa governor to reach deal on ethanol mandate

Source: By John Siciliano, Washington Examiner • Posted: Thursday, November 16, 2017

Sen. Ted Cruz is pressuring Iowa Gov. Kim Reynolds to reach a deal between oil refiners and the ethanol industry over the Environmental Protection Agency’s renewable fuel mandate.

Cruz, speaking on behalf of a group of eight GOP senators, wrote in a Tuesday letter to Reynolds that they do not wish to up-end the market for corn ethanol produced in her state, which is the nation’s top producer of the fuel.

Instead, Cruz argued that the senators’ real problem with the Renewable Fuel Standard is refiners being required to buy expensive renewable identification number credits, or RINs, to meet the EPA’s ever-increasing biofuel targets.

Cruz said the real beneficiaries of sustained high RIN prices are Wall Street traders and speculators who try to make money as refiners shed jobs to pay for the credits. The RFS requires refiners to blend ethanol and other biofuels in the nation’s fuel supply.

“Indeed, the data show that when RIN prices are highest, corn prices are often lowest,” Cruz wrote. “Surely, we can agree that our nation’s RFS policy should benefit corn farmers and hardworking refinery workers on Main Street, not fast-talking bankers on Wall Street.”

Cruz is looking for leverage in talking to Reynolds.

He has a hold placed on one of Trump’s nominees, Bill Northey of Iowa, to serve as the Agriculture Department’s head of conservation. Cruz said he would allow a vote on Northey if the governor agreed to meet and negotiate a solution between the refiners and renewable fuel producers.

Cruz noted in the letter that Iowa senators had placed similar holds on EPA nominees to block their confirmations because of a furor over the RFS. The holds were in response to an EPA proposal to dial back the RFS in an effort to benefit refiners.

That caused Iowa Republican Sens. Joni Ernst and Chuck Grassley to hit back with a pressure campaign that ultimately got President Trump to ask the EPA not to touch the program.

Cruz wants Reynolds to negotiate a deal that allows corn farmers “to sell much more corn,” but without costing thousands of refinery workers their jobs.

Cruz did well in the Iowa caucuses when he ran for president in February 2016, beating Trump by 4 percentage points. The RFS and ethanol were top issues for voters in the state.

At the time, Republican Gov. Terry Branstad was head of the state. Reynolds, who was lieutenant governor, took over in May 2017 after Branstad was confirmed as Trump’s ambassador to China.