Inside D.C.

Trump, Cruz Grassley – RFS Duel of the Titans

Weighing whether it’s less dangerous to irritate the Midwestern Corn Belt and its ethanol empire than aggravate Rust Belt oil refinery union members, President Trump has set for early next week a second meeting between dueling corn and petroleum state senators and cabinet members, including Agriculture Secretary Sonny Perdue and EPA Administrator Scott Pruitt, in hopes of finding that elusive middle ground on how to somehow modify the Renewable Fuel Standard (RFS) and its Renewable Identification Number (RIN) program, Reuters reports this week.

At this duel of the titans will be the president, his crew, Perdue and Pruitt, while invited are Sen. Ted Cruz (R, TX), likely his Texas colleague Sen. John Cornyn (R, TX), but for sure Sen. Charles Grassley (R, IA), the legislative protector of all things ethanol, and Sen. Joni Ernst (R, IA).  Possibly attending is Energy Secretary Rick Perry, former Texas governor, because when it comes to energy, you can’t have too many Texans in the room, or so they say.

Trump, in a previous White House meeting on the fate of the RFS, took no position on the RIN program or other alleged RFS burdens on petroleum refiners – though he publicly restated his unwavering RFS support.  He dodged a policy bullet by ordering participants to find a “win-win” solution to the problem.  However, each side – the petroleum industry and ethanol producers, along with their congressional champions – contends the other refuses to seriously engage in discussions.

Reuters reports the meeting was called after an appearance by Cruz at a Philadelphia rally this week at the headquarters refinery of Philadelphia Energy Solutions (PES).  PES filed for bankruptcy protection recently, citing the cost of RIN program compliance as a major contributing factor.  PES says its RIN compliance costs last year exceeded the company’s payroll for its 1,000-plus employees.  Opponents contend PES is “scapegoating the RFS to distract from their own failings,” arguing its bankruptcy has more to do with mismanagement and investor demand for pay-outs despite falling company revenues.

And while Trump tries to find yet another RFS “compromise,” politicos have enjoyed watching the clash of two Senate giants, as Cruz and Grassley  joust with each other on the Senate floor and in the press.  In October, 2017, when Trump restated his policy love of RFS and Pruitt put in writing his agency’s commitment to Ernst on E15 and related biofuels issues, Cruz slapped a formal hold on Trump’s nomination of Iowa Agriculture Secretary Bill Northey to be USDA undersecretary for farm programs and conservation.  Grassley and Ernst did not take kindly to Cruz’s action.  So, given Cruz won’t lift his hold any time soon, Grassley is shopping a letter to his colleagues – hoping to get necessary at least 60 signatures – to allow Senate Majority Leader Mitch McConnell (R, KY) to set a cloture vote on the Northey nomination, effectively end-running Cruz.

And if more evidence is needed that it’s unwise to irritate Iowans, particularly when it comes to ethanol and Bill Northey, the Iowa Republican Party this week sent Cruz a strongly worded letter, “urging” him to “end the political points he’s attempting to gain in an election year…(we) strongly encourage Sen. Cruz to get back to doing what he does best – promoting the conservative agenda – particularly if he’s to remain in good standing with Iowa conservatives should he return here in future endeavors.”

However, let us not forget Cruz won the 2016 presidential Iowa caucuses despite opposition to the RFS.

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