Cruz Pushes White House to Devastate RFS and Farm Economy to Protect Petroleum Monopoly

Proposal to Undermine RFS Could Lead to Farm Crisis

Contact: Cassidy Walter

JOHNSTON, IOWA – At a White House meeting today, Texas Senator Ted Cruz urged President Trump to adopt Cruz’s proposal for Renewable Fuel Standard (RFS) waiver credits that would gut biofuels demand. Iowa Senators Chuck Grassley and Joni Ernst, who also attended the meeting, refused to accept the proposal and told the president the idea “would destroy ethanol demand.”

“While we are glad that President Trump did not make a final decision and no deal was struck, it is very clear he has been presented misleading and one-sided information,” stated Iowa Renewable Fuels Association Executive Director Monte Shaw. “It is no secret that the President values American manufacturing jobs. In a cynical attempt to preserve the petroleum monopoly, Cruz is telling the president that gutting the RFS could help PES. Not one independent expert agrees with Cruz, and even the EPA’s own analysis disagrees. The facts are clear. Undermining the RFS will not save one refinery job in Pennsylvania, but it could push thousands of farm families into bankruptcy.”

In recent weeks, Senator Cruz has relentlessly attempted to blame the bankruptcy of the Philadelphia Energy Solutions (PES) oil refinery on the price of RINs, the compliance mechanism for the RFS. However, every single independent expert, including noted oil economist Phil Verleger, the University of Pennsylvania Kleinman Center for Energy Policy, Reuters, and even EPA professional staff, agree that RINs are not the cause of PES’ bankruptcy.

“The Cruz RFS waiver credit scheme would destroy biodiesel and cellulosic ethanol, and severely reduce corn ethanol demand,” continued Shaw. “Ag commodity prices would be hit hard. With farm income already down and farm bankruptcies up, this blow would likely spark a farm crisis the likes of which we haven’t seen since the 1980s.”

Shaw stated: “I remain optimistic that President Trump will stand by his commitment to defend the RFS. However, if he flip-flopped to adopt the Cruz RFS waiver scheme, it would be a complete abdication of President Trump’s repeated pledge to voters to defend the RFS. I believe the political fallout would be beyond anything I’ve witnessed in 25 years.”

During the meeting, Senators Grassley and Ernst spoke against the false Cruz narrative and noted that the vast majority of refiners are enjoying record profits while many farm commodity prices remain mired below the cost of production. Rather than unnecessarily destroying demand for biofuels, the Senators urged Trump to take steps to increase biofuels use.

“We agree with Senators Grassley and Ernst,” stated Shaw. “If President Trump wants to ease RIN prices while not destroying the RFS, there are steps he can take quickly by executive action. He could order the EPA to approve year-round sales of E15 and to bring more transparency to the RIN market. Everyone in the meeting today agrees those steps would lower RIN prices. So why not move forward instead of letting the oil industry hold these ideas hostage in an effort to destroy the RFS?”

The Iowa Renewable Fuels Association represents the state’s liquid renewable fuels industry and works to foster its growth. Iowa is the nation’s leader in renewable fuels production with 43 ethanol refineries capable of producing 4 billion gallons annually – including nearly 55 million gallons of annual cellulosic ethanol production capacity – and 12 biodiesel facilities with the capacity to produce over 350 million gallons annually. For more information, visit the Iowa Renewable Fuels Association website at: