U.S. Senator Cruz will block EPA nomination over biofuels costs to refiners

Commodities & Futures
© Reuters. FCC commissioners testify before U.S. Congress in Washington © Reuters. FCC commissioners testify before U.S. Congress in Washington

By Stephanie Kelly

NEW YORK (Reuters) – U.S. Senator Ted Cruz said on Wednesday he would block the nomination of an Environmental Protection Agency official until the agency brings stability to the rising costs borne by oil refiners for complying with U.S. biofuel blending laws.

Cruz, a Republican from Texas, follows a similar statement from Iowa Republican Joni Ernst, who said last week she would block Doug Benevento’s nomination for EPA deputy administrator. U.S. President Donald Trump’s administration engaged in a years-long effort to modify the nation’s biofuels blending laws and satisfy both the refining and corn industries that supported his 2016 election.

Under U.S. law, refiners must blend billions of gallons of biofuels into the nation’s fuel, or buy credits, known as RINs, from those that do. If a small refiner can prove the obligations would harm them financially, they can request an exemption.

Cruz said rising costs and slumping fuel demand caused by the coronavirus pandemic are reasons for the EPA to stabilize the price of RINs credits. Until that happens, “I will not allow this nomination to move forward,” Cruz said.

The administration has quadrupled the exemptions granted under the Obama administration, angering biofuel advocates and corn farmers who say the waivers hurt product demand. The oil industry says the obligations are too costly, and have criticized the administration for not reforming the law.

Last week, Ernst, a biofuels advocate, announced her opposition to the nomination, saying she wanted the administration to make clear how it would handle refiners’ requests for retroactive exemptions to blending mandates.

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