Five corn-state senators want to meet President Trump face to face to warn him against the oil industry’s proposal of a cap on the price of RINs, the credits that refiners must buy if they don’t blend enough ethanol into gasoline. Oil-state senators, led by Texas Sen. Ted Cruz, say the cap is needed to preserve jobs at oil refineries; midwesterners say it would destroy the market for corn ethanol.
The issue pits two Trump constituencies against each other. Rural America was pivotal to the election of Trump, who ran as a champion of ethanol. But he also carried Democratic-leaning Pennsylvania, where independent refiner Philadelpia Energy Solution says it went broke because of the high cost of RINs.
Cruz has proposed a maximum price of 10 cents per RIN as the oil industry part of a quid pro quo with ethanol makers that would allow year-round sale of E15, a richer ethanol-gasoline blend than the traditional 10 percent. By one account, Trump referenced the idea at a White House meeting at the start of March. At the time, a White House official said, “The president has been clear in his support for farmers and energy workers.”
It has been two weeks since Trump convened White House meetings on the dispute. After the last meeting, the White House said, “[T]he president looks forward to continuing this conversation.”
In a letter to Trump, the midwestern senators said RIN cap “is intentionally designed to undermine” the Renewable Fuel Standard, and that its consequences “would be severe and immediate across the Midwest, impacting farmers and biofuel stakeholders alike.” The RFS, which guarantees biofuels a share of the gasoline and biodiesel market, requires the use of 15 billion gallons of ethanol this year. More than 35 percent of the U.S. corn crop is used annually to make ethanol.
“The RFS is a key driver of economic growth and jobs across rural America,” wrote Republican Sens. John Thune of South Dakota, Roy Blunt of Missouri, Deb Fischer of Nebraska, and Joni Ernst and Chuck Grassley of Iowa. They requested a meeting as soon as possible with Trump “to discuss the harm that a RIN cap would impose on American agriculture as well as offer constructive solutions that represent the win-win solutions you are seeking.”
Farm-state senators say year-round E15 is the most straightforward solution. It would expand ethanol sales and reduce the need for refiners to buy RINs, thereby lowering the price.