Governors' Biofuels Coalition

A meeting between President Trump and senators on opposite sides of the debate over ethanol mandates today failed to produce a compromise, participants said.

Trump, accompanied by Agriculture Secretary Sonny Perdue and U.S. EPA Administrator Scott Pruitt, met with Republican Sens. Ted Cruz of Texas, Pat Toomey of Pennsylvania, and Chuck Grassley and Joni Ernst of Iowa at the White House, in what industry sources had cast as potentially yielding the “win-win” solution Cruz says is possible on the divisive policy.

Instead, the issue didn’t appear to advance much at all, Ernst said in a conference call with reporters, recalling similar discussions late last year.

“We had the very same conversation we had last December,” Erst said.

Cruz, on the other hand, told reporters the meeting was “very productive,” and his office said he expected further discussions with the administration to produce the policy changes he has said can benefit both sides.

Additionally, in a news release, Cruz said he believes a “win-win” solution may soon emerge. He said, “We made real progress, and, with the president’s leadership, I believe we are close to solving the problem.”

One outcome, senators said, is a possible meeting Thursday between Trump and advocates. There, ethanol supporters would explain why they believe one proposal Cruz is pushing — a cap on the price of renewable fuel credits — would harm the industry, said Grassley, who joined the conference call with Ernst.

“We’re very hopeful that they will be meeting with the president this week,” Ernst said.

As the meeting approached, Cruz backed away from one legislative tool he’d used to exert pressure — a hold on the nomination of Iowa Agriculture Secretary Bill Northey for undersecretary of Agriculture for farm and foreign agricultural services. The Senate confirmed him on a voice vote at about 11 a.m.

Earlier today, Grassley told reporters that capping the price of the credits — known as renewable identification numbers — would undermine other, more pro-ethanol changes the administration might offer, such as lifting season restrictions on sales of higher-ethanol fuel.

A price cap is one of the central ideas Cruz has floated. He’s called for limiting the price to 10 cents per RIN, down from levels around 70 cents lately.

Doing that would ease pressure on refineries such as Philadelphia Energy Solutions in Pennsylvania, which is forced to buy RINs to show compliance with the renewable fuel standard, since it doesn’t actually blend ethanol.

The company blamed the RIN prices for its recent bankruptcy filing, but Ernst said she hasn’t seen any independent study suggesting ethanol mandates are behind the plant’s woes. Senators said they told Trump they don’t accept the refinery’s argument.

Off the table, Grassley said, is the prospect of quick legislative tweaks to the RFS. Any changes to the decade-old law would be discussed as it nears a sunset date of 2022, he said.

“If there was anything to be done, it would be by regulation,” said Grassley.

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