Senate Majority Whip John Cornyn said Friday that he is trying to “negotiate a rapprochement” between corn farming and oil states over what to do about the nation’s ethanol mandate.
“We got to figure this out,” the Texas Republican said Friday at the CERAWeek energy conference in Houston. But it’s a “delicate dance” that will take time. His office is drafting legislation, but details are being kept close to the vest as his staff meets with all sides.
Cornyn said the big concern is the high price of ethanol credits that refiners in his state have to pay to meet the Environmental Protection Agency’s Renewable Fuel Standard, noting that one refinery in Pennsylvania filed for bankruptcy protection blaming the credit prices.
The RFS requires refiners to blend billions of gallons of corn ethanol into the nation’s gasoline supply, but some refiners are better at doing that than others. Many of the nation’s independent refineries cannot blend ethanol, so they are forced to buy renewable identification number credits, or RINs, to comply.
The RIN cost last year for Philadelphia Energy Solutions, the largest refinery on the East Coast that filed for Chapter 11 bankruptcy protection in January, was hundreds of millions of dollars.
Cornyn said his bill will look to carve out an equitable arrangement so that both ethanol farmers and oil refiners can compete, especially as the market for liquid transportation fuel is expected to shrink because of new technologies.
“Volume for liquid fuels is going to recede as a result of electric cars” and more efficient cars, he said. “We don’t intend to do anything to hurt [the corn farmers],” but everyone needs to be able to compete.
Sen. Lisa Murkowski, R-Alaska, the chairwoman of the Energy and Natural Resources Committee, joined Cornyn at the event. Cornyn said he and Murkowski would be looking at a solution for the ethanol mandate.
Democratic lawmakers announced a bill Thursday that looks to add environmental concerns to the legislation that Cornyn is drafting. The Democrats admitted that the corn ethanol mandate was a “mistake” and a “flop” that needs to be overhauled.
The Democratic bill favors placing a cap on corn ethanol blending, which the Democrats said would solve the RIN cost problems for the refiners. The ethanol industry voiced strong opposition to the bill.
