Senate Stand-Off on Ethanol

Ethanol-State Senators Wait for Proposal from Cruz, Who Maintains Hold on USDA Nominee

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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(DTN/The Progressive Farmer file photo)

WASHINGTON (DTN) -- Sen. Ted Cruz has now gotten multiple meetings at the White House over the Renewable Fuels Standard but the Texas Republican still maintains his hold on Iowa Agriculture Secretary Bill Northey's undersecretary nomination at USDA.

And, following a meeting Wednesday with staff from several senators at the White House's Eisenhower Executive Office Building, it seems Cruz doesn't know what exactly he wants changed with the Renewable Fuel Standard.

"He just keeps moving the goalpost and moving the goalpost," said a frustrated Sen. Joni Ernst, R-Iowa, on Thursday.

Staff from the offices of Sens. Ernst, Charles Grassley, R-Iowa, and Deb Fischer, R-Neb., joined White House staff Wednesday afternoon to discuss options, but staff from Cruz's office and Sen. Pat Toomey, R-Pa., did not have any proposals to offer and were not ready to negotiate.

Sen. Grassley's staff issued a statement afterward. "The next step is for Sen. Cruz to circulate specific proposals for consideration. The integrity of the RFS is Sen. Grassley's priority and there was an understanding expressed broadly in the meeting that any outcome can't undermine the integrity of the RFS," said Michael Zona, a spokesman for Grassley.

Leigh Claffey, a spokeswoman for Ernst, said, "While we are happy to review any proposals Sen. Cruz offers in the time ahead, we remain firm that our top priority in these meetings is ensuring that the spirit and the letter of the RFS is supported as intended by Congress."

The Wednesday meeting was the second meeting in a week at the White House on the RFS after Cruz forced the issue by placing a hold on Northey's nomination to be USDA undersecretary for Farm and Foreign Agricultural Service. Cruz placed the hold on Northey's nomination in late October even though Northey was voted unanimously out of the Senate Agriculture Committee.

Cruz had indicated before last week's meeting that he would release the hold on Northey after he got to meet with President Donald Trump on the issue. Cruz's office has not released a statement on the latest talks or Northey's nomination.

Last week on Fox New, Cruz said the issue with renewable identification numbers, or RINs, affected refiners and "potentially tens of thousands or even hundreds of thousands of blue collar union jobs that are at risk in refineries across the country .... This conversation was all about finding a win-win solution that saves the job of the blue-collar working class refinery workers and at the same time, that helps corn farmers sell even more corn. And I think there is a win-win solution and we had a very productive conversation moving towards that solution."

Ernst told DTN that Northey likely won't receive a confirmation vote now until after the new year because of pending judicial nominations and other federal nominations that are stacking up awaiting a full Senate vote.

Cruz is working on behalf of oil refiners who don't want to see higher ethanol blend levels and want to see some change in the credits used by the Environmental Protection Agency to account for refiner purchases, known as RINs. Refiners complain that there is too much speculation in the RIN market that drives up the costs for those credits.

The biofuels group Growth Energy stated there were possible regulator solutions that would solve the problems raised by the refiners. Growth Energy wants EPA to solve the Reid Vapor Pressure (RVP) issue that restricts the sale of 15% ethanol in the summer months.

"There already is a solution to all of the issues being discussed in this meeting; it's RVP relief. Blending more ethanol is what lowers RIN prices," said Emily Skor, CEO of Growth Energy. "RVP relief would immediately add another three months' worth of E15 sales to the market. That's how the RFS is meant to work. This commonsense solution is a win for consumers, farmers, and refiners. The president's rock-solid support for the RFS has helped to turn around three straight years of falling farm income under the previous administration. If Mr. Cruz and his coalition are unwilling to consider this obvious solution, these meetings are nothing more than a charade to get his name in headlines."

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Chris Clayton