The President has, thus far, been either unwilling or unable to broker some sort of compromise between oil refining states like Texas or Pennsylvania and the King Corn bastion of Iowa. Recent meetings at the White House between Ted Cruz, Chuck Grassley and Joani Ernst haven’t resulted in any sort of relief from the renewable fuel standard (RFS). That doesn’t mean that the issue has gone away, however, even if the standoff continues.
Now another player seems to be entering the negotiating process. Vice President Mike Pence has been on a swing through the Midwest in support of various White House proposals and this week he dipped a toe into the debate, albeit in a rather subtle fashion. (Washington Examiner)
Vice President Mike Pence, on a tour through the upper Midwest to tout the Republican tax cuts, is discussing ideas on how to fix the Renewable Fuel Standard’s ethanol mandate, but it isn’t a major part of his message to large corn-growing states.
“Got to visit with VP Pence today,” tweeted Kevin Skunes, the president of the National Corn Growers Association, after meeting Pence briefly in North Dakota. “We talked Renewable Fuel Standard!”
Pence told him the administration is “looking for a ‘win-win’ solution,” Skunes continued. “I asked him if we could meet to talk about what that solution looks like! He said let’s talk!”…
Considering that Pence was talking to the head of one of the larger corn producing groups in the country we probably shouldn’t expect very much in the way of progress. They’re obviously not motivated to consider any sort of reductions in RFS mandates, and up until now the message coming from Grassley and Ernst has been “drop dead” for the most part. But the fact that Skunes is talking to Pence at all might portend something positive. Why bother discussing any “solution” if it didn’t involve some sort of compromise?
Even more to the point was Pence’s choice of the phrase “win-win” which mimics what both President Trump and Ted Cruz have said in the past.
Nevertheless, Pence’s use of the term “win-win” for the ethanol mandate is the same as that of Sen. Ted Cruz, R-Texas, who wants Trump to waive the requirement for refiners to buy expensive ethanol credits to comply with the ethanol mandate. The ethanol industry, Skunes’ group, and supporters on Capitol Hill loathe the idea, because it would crush demand.
The plan is being pushed by Cruz and others as a way stave off job losses that they argue stem from requiring merchant refiners to buy expensive ethanol credits to meet the Environmental Protection Agency’s ethanol mandate.
In an ideal world, we would have had a president who was ready to cancel or phase out the RFS entirely. That didn’t happen, and clearly, Trump doesn’t plan on going back on his word, given in Iowa during the campaign. But that doesn’t mean there’s no room for compromise here. Waivers, even if they are only temporary, could be offered to states which are being hit the hardest. The mandated ethanol mixing levels for fuel could be scaled back a short way.
On a separate front, the bizarre trading market which has grown out of the creation of the Renewable Identification Number (RIN) system could either be regulated to control prices or EPA could remove the RINs from the bidding process entirely to establish a fixed cost. Either measure could bring down the price tag for the RINs which was largely the reason that the refinery outside of Philadelphia had to file for bankruptcy this year.
Is Mike Pence the right guy for this job, assuming he’s getting involved? He’s known for being a good negotiator and is a bit less likely than his boss to fly off into a tweetstorm when the talks hit a rough patch. Who knows? If he can get the Iowa contingent to actually come to the table in good faith he might bring back a win at long last.