Texas politicians are ramping up the pressure on President Donald Trump to pull back a federal ethanol mandate that created to reduce the nation’s thirst for oil.
Sen. Ted Cruz, R-Texas and other Republican senators met with President Donald Trump Thursday to discuss changes, following an announcement by the Environmental Protection Agency earlier this year it would slightly increase biofuels mandates for 2018 and would not make changes to the program long sought by Republicans from oil rich states.
In a letter in late October, Cruz and eight other Republican Senators, including Sen. John Cornyn, R-Texas, and Sen. James Inhofe, R-Okla., asked Trump to meet, so they could “discuss a pathway forward toward a mutually agreeable solution.”
“If your administration does not make adjustments or reforms on matters related to the renewable fuel standard, it will result in a loss of jobs around the country, particularly in our states,” the letter read.
In attendance at Thursday’s meeting were Trump, Chief of Staff John Kelly, EPA chief Scott Pruitt, Agriculture Secretary Sonny Perdue, Deputy Energy Secretary Dan Brouillette, and Trump economic adviser Gary Cohn, as well as eleven senators, including Cruz and Cornyn.
Trump is “aware that workers in the refining sector believe the program isn’t working as intended, and should be improved to reduce their compliance burdens,” a White House spokesman said. “He will listen to the concerns of senators who represent these workers, with the hope of finding common ground.”
During the meeting Trump encouraged senators to find a solution that was “win-win” for refineries, biofuels producers and consumers, said a lobbyist briefed on the meeting.
Cruz was granted the meeting after holding up a confirmation vote in the senate on Bill Northey, Trump’s nominee to be a undersecretary of agriculture.
But the White House faces opposing pressure from politicians in the Midwest, a region for which the more than decade old mandate has created an economic boom through increased demand for corn – the principal source of ethanol in this country.
Earlier this week Sen. Chuck Grassley, R-Iowa, downplayed the White House meeting with Cruz, telling the Des Moines Register, “the president keeps doing what he’s told the voters of Iowa, me and Sen. (Joni) Ernst so many times — that he supports ethanol.”
Right now ethanol represents about 10 percent of the nation’s motor fuel supply, and refiners in and around the Houston area have long complained not only about the loss of demand for gasoline but the cost of buying the Renewable Identification Numbers – or RINs – that are required by Washington.
Traded on Wall Street, RIN prices have at times skyrocketed, a cash cow for those that blend the ethanol but costly for those required to buy the credits.
Earlier this month Texas Governor Greg Abbott wrote to Pruitt, asking for a waiver from the mandate for Texas, limiting ethanol to 9.7 percent of the fuel supply so as not to “inherently create a shortage of RINs.”
“The escalating and unjustified RINs prices are creating a severe economic hardship for refiners, small retailers, consumers, skilled labor, and others,” Abbott wrote. “The strength and resiliency of the industry and by extension, Texas’ economy — is threatened by a restrictive federal mandate.”