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Cruz to Trump: Give Us RIN Price Caps

Standing on a patch of Capitol grounds known as the Senate swamp, Texas Senator Ted Cruz appealed to President Trump on Thursday to protect oil refinery jobs by capping the price refiners pay for credits, known as RINs, to comply with the ethanol mandate. Cruz told reporters there is not enough unity in a polarized Senate to change the mandate.

Ethanol proponents say the oil industry needs no further concessions considering the gusher of waivers issued by the EPA to exempt small-volume refineries — some owned by large and profitable oil companies — from having to comply with the mandate. All told, the waivers reduced the effective ethanol mandate by 1 billion gallons last year, according to an ethanol trade group. Traditionally, these “hardship” waivers have been reserved for small companies facing high RIN expenses because they did not blend enough ethanol into gasoline.

The EPA has received more than 30 requests for waivers from this year’s mandate, said administrator Scott Pruitt during a House hearing. He offered to work with Congress to reform the Renewable Fuel Standard and said biofuels were bedeviled by volatile RIN prices.

“There is a win-win solution that keeps these refineries going, that doesn’t bankrupt them, and, at the same time, allows corn farmers across the country to sell even more corn,” said Cruz, who was backed by four or five dozen refinery workers. “The solution is capping the regulatory cost on RINs.”

During a half-hour rally, Cruz referred frequently to “the Washington swamp” working against oil workers. In response, an onlooker shouted, “You’re the swamp.” Pausing a second, Cruz replied, “Thank you, ma’am.”

Agriculture Secretary Sonny Perdue, who has been part of administration discussions over revisions to the RFS, said on Tuesday that the RIN fight ought to be viewed as an intramural struggle — “Big Oil vs. Little Oil,” with Little Oil being companies that refine petroleum but don’t blend it with ethanol.

“We’re concerned over the [EPA] waivers,” said Perdue. “We believe that is adequate compensation for RIN prices.” Like corn and ethanol groups, Perdue said the administration should allow the year-round sale of E15, a 15% blend of ethanol into gasoline. That would boost ethanol consumption and reduce the need for refiners to seek RINs, according to proponents.

The waivers amount to “potential illegal abuse” of the EPA’s power, said Iowa Senator Charles Grassley during a teleconference. “He [Pruitt] is reducing ethanol from what he said in November,” when the EPA set the RFS for corn ethanol at 15 billion gallons this year. After expressing confidence that Trump will stand by ethanol, Grassley said, “I don’t want Pruitt replaced. … He’s been right about everything else” — a reference to regulatory relief.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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