Overnight Energy: Cruz win raises questions about ethanol’s political power

WHERE DOES ETHANOL GO FROM HERE?: Ted Cruz’s victory in the Iowa caucuses Monday night is raising new questions about the political potency of ethanol, a major industry and former electoral lightening rod in the Hawkeye State and entire Midwest.

Cruz ran on a platform of phasing out the Renewable Fuel Standard, a position opposed by many in the ethanol industry. Cruz’s victory in Iowa, which leads the country in ethanol production, was seen by many biofuel opponents as a major defeat for the fuel’s political clout.

“At the end of the day, it’s been pretty decisively shown that it is not necessary to support ethanol subsidies, whether in the form of mandates or otherwise, in order to win in Iowa, Liz Mair, a Republican strategist, said.

{mosads}Iowa Gov. Terry Branstad (R) took a hard stance against Cruz’s ethanol position, saying he would like to see voters reject the Texas senator because of it. Opponents said that warning only raised the stakes for the mandate.

But ethanol supporters said the result was a net positive for the industry. Cruz may have won the Republican caucuses, but most voters — more than 80 percent — caucused for candidates who support the mandate. Cruz himself, they said, moderated his position on the issue.

“Big Oil is going to claim a false victory today, but I really believe that that rings hollow,” said Eric Branstad, the state director of pro-ethanol group America’s Renewable Future and Terry Branstad’s son.

“We’ve moved, especially Sen. Cruz, in a positive direction. He has moved closer to us with his new plan on ethanol, and moved further from oil.”

Read more here.

‘NO’ ON SIX AMENDMENTS: Senators conducted roll call votes on six amendments to an energy rewrite bill on Tuesday, and none reached the 60-vote threshold to pass.

Three amendments came from each party and represented strongly partisan proposals, like rolling back tax breaks for fossil fuel companies and restricting the president’s national monument powers.

“If we’re serious about creating a level playing field, then we should phase out incentives for fossil fuels as we phase them out for wind and solar power,” Sen. Brian Schatz (D-Hawaii) said about his fossil fuel amendment.

Sen. Jeff Flake (R-Ariz.) said the national monument proposal “provides Congress and the applicable state Legislatures a three-year window to approve presidentially declared national monuments, ensuring that land-use decisions finally have an input from the various states.”

Meanwhile, senators passed by voice vote two non-controversial amendments: one to increase scientific research funding and one to better educate landowners about federal conservation opportunities.

Read more here.

DEAL OR NO DEAL ON FLINT AID: Senators are still negotiating for aid to Flint, Mich., requested by its Democratic congressional delegation, but it’s not clear that they’re on the same page about where negotiations stand.

Sen. Debbie Stabenow (D-Mich.) said Tuesday she and Republicans are “very close” to providing some funding to Flint, and it would be offset elsewhere.

She said the funding matter is settled, and other provisions are still being negotiated.

But Senate Majority Whip John Cornyn (R-Texas) was less rosy about the process.

“I’m just expressing my own view that we shouldn’t set some precedent here that a local tragedy like this suddenly becomes a national responsibility,” Cornyn told reporters.

He cautioned against getting “the cart before the horse” on what Flint needs, and adding to the deficit to do so.

Sen. Jim Inhofe (R-Okla.), chairman of the committee that oversees the Environmental Protection Agency (EPA), also was cautious about funding the Democrats’ $600 million request for Flint.

“I think there’s a recognition by most — certainly among an easy majority — that they’re not going to be able to do this,” Inhofe said.

FLINT EMERGENCY MANAGER WON’T TESTIFY: Darnell Earley, the former emergency manager of Flint, said Tuesday that he will not testify at Wednesday’s House Oversight Committee hearing on the lead contamination in Flint’s water.

Earley instead chose to decline the committee’s invitation and stay in Detroit, where he is emergency manager of the school system, a school spokeswoman told the Detroit News.

Earley was appointed by Gov. Rick Snyder (R) and had wide-ranging power over Flint during the time of the water source switch that caused the lead contamination. He’s therefore a key figure in the lead crisis.

The decision is leading to increasing criticism that no one will be at the hearing to answer for Snyder’s role in the problem.

Earley also announced Tuesday that he’ll step down as emergency manager for Detroit’s schools at the end of the month.

Miguel Del Toral, the EPA official who did extensive research into the problem last year, was also listed on a preliminary witness list, and will not be at the hearing, the committee said.

ON TAP WEDNESDAY I: The Senate will continue debating — and amending — its energy reform bill. Senate Majority Leader Mitch McConnell (R-Ky.) late Tuesday filed for cloture on the bill, which would set up a final vote on Thursday.

ON TAP WEDNESDAY II: The House Oversight Committee will hold its hearing on the Flint water crisis. Witnesses include Rep. Dan Kildee (D-Mich.), Joel Beauvais, the acting administrator of the EPA’s Office of Water, and Keith Creagh, the director of the Michigan Department of Environmental Quality.

Rest of Wednesday’s agenda…

Joseph Pizarchik, the director of the Office of Surface Mining Reclamation and Enforcement, will testify at a Senate Environment and Public Works Committee hearing on the Obama administration’s stream protection rule for coal mining.

The House Natural Resources Committee will consider 18 bills, a list of which can be found here.

Two administration officials will speak at a Resources for the Future seminar on the drought in the West.

David Danielson, the assistant secretary for energy efficiency and renewable energy at the Department of Energy, will speak at a Bipartisan Policy Center event on energy innovation.

Melanie Kenderdine, a counselor to Energy Secretary Ernest Moniz, will speak at an Atlantic Council event on energy technology.

AROUND THE WEB:

Lock-and-dam improvement projects — a major want for the coal industry — are about to be flooded with federal cash even as coal demand diminishes, The Wall Street Journal reports.

Exxon Mobil’s fourth-quarter profit, the victim of low oil prices, fell 58 percent to its lowest quarterly profit in more than 13 years, the Associated Press reports.   

California cut its water use only 18.3 percent last month from two years prior, below the 25 percent cut officials want, but the state is on track to meet its overall goals nonetheless, the San Jose Mercury News reports.

IN CASE YOU MISSED IT:

Check out Tuesday’s stories…

-Dems play offense on Flint
-Senate rejects partisan amendments to energy bill
-Clinton rolls out energy efficiency plan
-Cruz victory threatens ethanol’s power
-Chamber official: Businesses will flee climate deal
-Feds might crack down on swim-with-dolphin programs
-GOP chairman takes aim at climate rules in energy debate
-Group urges EPA to protect waterways from pesticides
-Brickmakers suffering from heavy-handed regs, report finds
-Reid pressures GOP to back Flint funding
-FBI joins probe of Flint drinking water crisis

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