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The RFS Debate Heats Up Again

Since its inception more than a decade ago, the Renewable Fuel Standard (RFS) has pitted Big Corn against Big Oil. As the Midwest corn lobby fights against policy changes that could lower ethanol requirements, legislators from oil-rich states advocate for an overhaul that will be less burdensome to oil refineries.

As the debate has heated up over the last six months, the power struggle between the two has strengthened. Senator Ted Cruz (R-TX) held up the nomination of USDA undersecretary Bill Northey for months, demanding a meeting with President Trump to discuss biofuel policy changes. Senator Charles Grassley (R-IA) fired back, saying Cruz hurt his future chances at a presidential race if he didn’t back off. While claiming his allegiance to the RFS on multiple occasions, Secretary of Ag Sonny Perdue’s commitment to the policy has been called into question.

Here’s the time line of how these events have unfolded. As the story evolves, the time line will be updated.

May 5, 2017Perdue addresses farmers, lawmakers, and members of the ag industry at an Iowa cattle operation. “I work for a guy named Donald J. Trump. Did you hear what he said during the (presidential) campaign? He said that renewable energy and ethanol are here to stay. And we’re going to look for more technology to make it more efficiently.”

July 26, 2017Rumors continue to circulate that Bill Northey, the Iowa state agriculture secretary, will be tapped for USDA undersecretary. “It’s just the red tape of doing every step you have to,” said Grassley, referring to the background and conflict-of-interest reviews of potential federal officials, when asked about Northey’s status. “He is in the last stages, the last step of that process, and I would imagine that in a week or two, the president will be asked to sign off on it.”

September 2, 2017Trump announces three key USDA positions, including Northey as undersecretary for farm production and conservation.

October 5, 2017 – U.S. senators, including Grassley and Iowa Senator Joni Ernst, ask the EPA to abandon plans to lower biofuel requirements.

October 6, 2017During Northey’s confirmation hearing, Chairman Pat Roberts said the Agriculture Committee would clear his nomination “as expeditiously as we can” for a vote by the full Senate.

October 26, 2017 – Northey’s confirmation in the U.S. Senate is put on hold by Cruz. Politico reports the block is in response to Grassley and Ernst, among other lawmakers, blocking changes to the RFS.

October 26, 2017 – In a letter to the president, nine U.S. senators from oil-rich states, including Cruz, request a meeting to discuss changes to the RFS.

December 1, 2017Trump agrees to meet with Cruz and other representatives of the oil refining industry to discuss the RFS.

December 7, 2017 – After the meeting with Cruz and eight other lawmakers, Trump says he is open to reforming the RFS as long as it can be done in a way that protects jobs in refining and agriculture.

December 8, 2017 – Members of Trump’s administration call Grassley and Ernst to ask them to consider changes in biofuels policy, specifically to look at ways to ease the burden on oil refineries.

December 13, 2017Midwest lawmakers agree to consider proposals from Cruz that could help oil refining companies meet requirements, but also pledge to protect the RFS. “While we are happy to review any proposals Senator 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,” Ernst spokeswoman Leigh Claffey said.

December 20, 2017 – Senator John Coryn from Texas tries to convince the Midwest corn lobby to consider overhauling the RFS.

January 17, 2018Grassley calls out Cruz for sitting on Northey’s nomination. “We’re doing everything we can to get [Northey] approved,” said Grassley, but Cruz’s idea of a cap on the price of RINs — credits refiners can buy to comply with the ethanol mandate — “makes negotiations a dead end.”

February 21, 2018 – After a Pennsylvania oil refinery goes bankrupt, blaming the RFS, Cruz urges Trump to overhaul the country’s biofuels policy. During a rally held at the refinery, Cruz says that if he had become the president, “I would’ve ended the RFS.”

February 21, 2018Grassley tells Cruz that he should rethink his hold on Bill Northey’s confirmation to the USDA, saying the delay will hurt Cruz’s chances if he makes another run for president.

February 23, 2018Trump calls a meeting with legislators from oil-rich states as well as farming powerhouses to discuss potential changes to the RFS.

February 26, 2018 – In a letter to Trump, farm groups ask that the RFS not be weakened. “Any action that seeks to weaken the RFS for the benefit of a handful of refiners will, by extension, be borne on the backs of our farmers.”

February 27, 2018 – The Senate confirms Bill Northey as a USDA undersecretary. Northey’s confirmation was blocked for four months by Cruz as leverage for getting changes made in the RFS.

February 27, 2018President Trump met with key senators from oil-refining states – Cruz and Senator Pat Toomey – and with Grassley and Ernst from Iowa to find an option to help refiners cope with the RFS. No deal was made at the meeting, according to Grassley.

February 27, 2018 – The National Corn Growers Association (NCGA) questions Perdue’s loyalty to the RFS, after rumors circulate that he supports RFS changes. “Why isn’t he sticking up for the grain farmers of America?” asked NCGA President Kevin Skunes in an interview with Agri-Pulse.

February 28, 2018Secretary of Ag Sonny Perdue addresses farmers at Commodity Classic. “I have not, I will not support any policies that diminish RFS and our producers.”

March 1, 2018 – At a meeting at the White House between oil and corn rivals, Trump voiced his support for biofuel reform that includes capping the price of RINs while expanding sales of ethanol.

March 2, 2018 – Scott Irwin, University of Illinois agricultural economist and RIN expert, brings up two important points about the RFS debate. First of all, a RINs cap requires modification of the RFS statue by Congress. Second, that “the quickest way to lower RIN prices is to establish RVP parity for E15,” says Irwin. “To me, that’s a real win-win solution that everybody should be able to get behind. But that depends crucially on the refining industry negotiating in good faith. Is their real objective to lower the cost of these RINs? That’s what they say. Or is their objective to eliminate the RFS?”

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