Government

Senators warn Trump on renewable fuels cap

Grassley tweets change would be 'catastrophic'

Sen. Chuck Grassley, R-Iowa, and is pictured in Washington, D.C. in October 2017. (Photo from Grassley’s office)
Sen. Chuck Grassley, R-Iowa, and is pictured in Washington, D.C. in October 2017. (Photo from Grassley’s office)

Five Midwest senators are warning President Donald Trump that a fixed price waiver credit would make it “impossible” for him to honor his commitment to a robust Renewable Fuel Standard.

The waiver credit has been proposed by Sen. Ted Cruz, R-Texas, to bring down the cost that refineries bear in complying with the Renewable Fuel Standard.

However, the biofuels industry and farm state politicians have been heavily lobbying the administration to reject the move, saying it would hurt farmers.

The lobbying has been particularly intense in recent days.

In a Thursday letter from five Republican senators — Chuck Grassley and Joni Ernst of Iowa, Deb Fischer of Nebraska, John Thune of South Dakota and Roy Blunt of Missouri — said that granting a waiver would drive down biofuel production.

“Enacting such a policy,” the letter said, “makes it impossible for you to honor your commitment of a 15 billion gallons RFS.”

During the 2016 campaign, Trump promised to support the RFS.

The industry and its backers say the way to deal with the situation is to allow year-round sales of E15 ethanol, which they said would drive down compliance costs.

In the letter, the senators also asked for a meeting with the president “at your earliest convenience.”

Grassley, in particular, has been a leader in the fight.

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And in a pair of tweets Thursday and Friday, Grassley addressed the president directly, appearing to warn him about moving too hastily on a cap.

“I want to shake up what u might be planning abt a RINS cap for a short period. It will be CATASTROPHIC to ethanol,” Grassley wrote in one of the tweets. “U will only believe me when u find ethanol in doldrums. That’s where ur idea leads.”

Cruz and refiners have been calling for reforming the RFS, which requires biofuels to be blended into the nation’s gasoline supply. Refineries have complained about the high price of Renewable Identification Numbers, or RINs, the credits they can purchase to show compliance if they don’t do the blending themselves.

A Pennsylvania refinery cited the cost of RINs when it filed for bankruptcy protection recently.

The biofuels industry countered that other refiners are profitable and that Philadelphia Energy Solutions went into bankruptcy because of its own mismanagement, a charge the company rejects.

The dispute has put the Trump administration between two politically important constituencies in key states, Iowa and Pennsylvania.

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