The Energy 202: Trump administration stuck between two GOP sides on ethanol

Source: By Dino Grandoni, Washington Post • Posted: Monday, October 30, 2017

Sen. Chuck Grassley (R-Iowa) during a Senate Finance Committee hearing in May. (Photo by Drew Angerer/Getty Images)

The Environmental Protection Agency, in its ambitious effort to roll back the previous administration’s energy and environmental policies, has had a significant stumble with Republicans lawmakers. On both sides of the ethanol debate.

In a September filing, EPA chief Scott Pruitt signaled the agency was interested in altering the amount of a certain biofuel that needed to be blended into the nation’s transportation fuel supply. That angered lawmakers representing ethanol interests, including the powerful Iowa GOP Sen. Chuck Grassley, who worried they might be next.

So biofuel makers, who were preparing to meet the standards set by the Obama administration, came up with a plan. Last week, a group of Midwestern senators arranged a meeting with Pruitt. A few days later, Pruitt assured Grassley and others that he would forgo altering the renewable fuel standard (RFS).

Oil refiners, long interested in changing the RFS, were surprised by the reversal from an agency that now has someone at the helm who is considered an industry ally.

In politics, like in physics, there’s often an equal reaction to every action. This week, oil struck back.

On Thursday, nine Republican senators from six oil-refining states — Arizona, Oklahoma, Pennsylvania, Texas, Utah and Wyoming — sent a letter to President Trump requesting a meeting with him about the RFS.

“Hard working Americans whose jobs depend on a strong independent refining industry deserve the opportunity for you to hear directly from their representatives on the potential impact of policies that could kill their jobs and destroy a critical component of our nation’s economy,” the senators wrote.

Independent refiners most affected by the renewable mandate were pleased with the letter. “We applaud the Senators for voicing concerns with the RFS and their commitment to a strong domestic refining industry,” Chet Thompson, president of the lobbying group American Fuel and Petrochemical Manufacturers, said in a statement. “The adverse impacts of these mandates on American families and workers have been clear for too long.”

Giving the screw an extra turn, at least one of the signers, Ted Cruz of Texas, put a hold on the nomination of Bill Northey, Iowa’s agriculture secretary, who Trump picked for as undersecretary position in the Agriculture Department, preventing a vote on the Senate floor (for now).

The Senate Agriculture Committee had easily approved Northey. Politico first reported the holds on Thursday.

That delay holds up the potential ascension of Pat Grassley, an Iowa state representative and Grassley’s grandson, who the senator had been pushing to get the soon-to-be-vacant top agriculture post in the Hawkeye State.

“There are mechanisms in the Senate that are aimed at encouraging dialogue and resolving different points of view,” Grassley said in a statement. “I’d be happy to discuss Secretary Northey’s outstanding qualifications to be a top USDA official with any of my colleagues.”

The political dilemma for Trump is that both refining and farming states make up the coalition that put him in White House. Pleasing one side will upset the other.

“The senators’ action today isn’t surprising, given the number of their constituents that are in the refining business,” said Doug Whitehead, chief operating officer of the National Biodiesel Board. “Both the biofuel and refining industries have many members that helped elect President Trump.”

So far, lawmakers from biofuel-producing states have outmaneuvered representatives from oil and gas country. Last week, the Senate Environment and Public Works Committee was forced to postpone the confirmation votes of four EPA nominees, suggesting that one or both of the Midwestern Republicans on the committee, Joni Ernst of Iowa or Deb Fischer Nebraska, was willing to buck the Trump administration over the RFS decision.

But it’s Grassley, chairman of the Senate Judiciary Committee investigating Russian interference in the 2016 election, who may hold the most sway over Trump. In a series of phone calls starting this summer, Grassley reminded Trump of his promise to support ethanol when campaigning in Iowa during the first-in-the-nation caucuses. Trump, then a longshot political newbie, improbably placed second in that vote.

By Grassley’s account, Trump seems to realize the importance of committing to ethanol in a state where corn is king.

“He ran on a platform of supporting ethanol, and he was still for ethanol,” Grassley told The Washington Post in an interview this month, describing an August phone call that Trump initiated.

“He wanted me to tell the people,” Grassley said. And tell Iowans Grassley did — on Twitter.

Just had ph call from Pres Trump + he assured me he’s pro ethanol +I’m free 2 the ppl of Iowa he’s standing by his campaign PROMISE

— ChuckGrassley (@ChuckGrassley)

Tlkd 2 @realDonaldTrump about ethanol +he knows that ethanol is good good good

— ChuckGrassley (@ChuckGrassley)