Cruz lays off the corn, turns on the gas

Andrea Drusch
McClatchy Washington Bureau (TNS)
File photo - U.S. Senator Ted Cruz, R-Texas, addressed representatives of the agriculture industry at the Southwest Ag Issues Summit in Fort Worth.

WASHINGTON — Ted Cruz is holding up the confirmation of a key agriculture nominee to help oil refiners in his home state of Texas — infuriating some of the Iowans who fueled his rise in the 2016 presidential primary.

Cruz is up for re-election this year in Texas, where oil and gas is king and employs hundreds of thousand of people. But he could someday take another run at the White House, and Iowa is traditionally the site of the nation’s first presidential caucuses.

Roughly 315,000 Texans work in the state’s oil and gas industry. Cruz and other free market conservatives say it’s suffering from rising fees connected to renewable fuel standards.

In an effort to force industry players to discuss reconsidering that fee, Cruz last week once again withheld his support to confirm Bill Northey, President Donald Trump’s nominee for a top U.S. Department of Agriculture position.

Cruz says a meeting over the fees is critical to his state, where more than 100,000 jobs are tied directly to refining.

But using Northey as leverage to get it has fueled outrage from key Iowa Republicans, including GOP heavyweight Jeff King, who helped Cruz’s presidential Super PAC and once called the senator the “answer to my prayers.”

Northey, Iowa’s secretary of agriculture, was nominated by Trump in October to serve as the USDA’s undersecretary for farm production and conservation.

King, the son of Rep. Steve King, R-Iowa, defended Northey as “one of the best I know.” Despite being charmed by the Texas Republican on a 2015 hunting trip, he went on to suggest “there aren’t many Cruz supporters left,” in Iowa.

In Texas, Cruz critics on the left and right have attacked him for putting personal ambitions ahead of serving his home state. After winning the Senate nomination in an upset primary victory in 2012, Cruz easily won the general election and launched a presidential bid three years later.

On Wednesday, Cruz insisted he wasn’t pitting one state against another in an “instance of parochial differences.” But, in a public speech, he was talking like a Texan.
“I am elected, like each of the members of the body, to represent my constituents, in this case 28 million Texans,” said Cruz. “Seeing hundreds of thousands of blue-collar workers driven out of business because of a broken regulator system makes no sense.”

Texas’s senior Sen. John Cornyn, R-Texas, isn’t weighing in on Northey’s confirmation battle. He said through an aide Friday he’ll “continue working hard to unify all stakeholders in a consensus effort to reform the Renewable Fuel Standard.”

Cruz has made a public showing of his hold on the nomination, and has been criticized by his Iowa colleagues.

“I have been trying to work in good faith with the senator from Texas and have offered several options that would result in lower prices for (Renewable Identification Numbers),” Sen. Charles Grassley, R-Iowa, said on the Senate floor Wednesday.
Grassley last year threatened to block Trump’s nominees for Environmental Protection Agency posts over White House plans to reduce the amount of biofuel required to be blended into gasoline.

Cruz sought to mollify both states in his own speech that day, insisting a deal could be reached for both Texas and Iowa’s interests.

“I want a win for blue-collar refinery workers, and I want a win for Iowa corn farmers. I believe there is a win for both,” Cruz said to a chamber that was nearly empty — except for Iowa’s two senators and Democrat Amy Klobuchar, D- Minn., who serves on the Senate Agriculture Committee.

Cruz campaigned for and won the Iowa GOP caucus two years ago railing against the Environmental Protection Agency’s Renewable Fuel Standard, which Iowa farmers like.
That standard requires transportation fuel to contain a minimum amount of renewable fuels. Renewable Identification Numbers are numbers sold to oil refiners to prove that they’re meeting that standard.

The cost of RIN numbers has increased significantly, drawing criticism from refiners. Some say they now spend more on RINs than their entire payroll.

In exchange for Northey’s confirmation Cruz wants industry experts to come up with a way to lower RIN prices. He says that solution could be paired with some type of incentive for the ethanol industry that would help corn farmers.

“Can you imagine running a business where you spend more than double your payroll to write a check not to buy anything, not to pay anybody, not to buy any supplies, but to simply purchase a government license?” Cruz said Wednesday.

RINs are a target of free market conservatives who bristle at government regulations. They’ve also come under particular fire after a Pennsylvania refinery filed for bankruptcy last month, blaming the rising cost of RINs.

Cruz says he’s sought for months to schedule a meeting with stakeholders from both industries, but has been shut out by lobbyists from the ethanol industry, who use RINs to artificially manipulate ethanol prices.

“Mr. Northey would have been confirmed a long time ago had the lobbyists for the ethanol industry been willing to come to the table and reach a commonsense solution that would have resulted in more money for their industry, more ethanol, more corn,” said Cruz.

The ethanol industry disputes that assessment.

Renewable Fuels Association President and CEO Bob Dinneen said in a statement Wednesday that “RIN costs are recovered with bulk fuel sales and offset by the lower cost of ethanol today.”

He also said representatives of the ethanol industry “have received no invitation” from Cruz to talk, and brushed off the closing businesses as a few “mismanaged refineries.”