Last week, news broke that under direction from President Trump, Environmental Protection Agency (EPA) head Scott Pruitt had bowed to pressure from Senators Chuck Grassley and Joni Ernst (R-Iowa) to set a bunch of ethanol-relevant policy to benefit King Corn and disadvantage parts of the manufacturing sector.
Grassley and Ernst had held up at least one EPA nomination to put the screws to Trump.
But word is that Grassley, Chair of the Senate Judiciary Committee, had also threatened Trump’s judicial nominations.
There were even rumors in D.C. that Grassley was prepared to push the Senate Judiciary Committee’s Russia probe, the scope of which the New York Times notes has not yet been determined, in a much wider direction (hint, hint) should Pruitt not cave.
But while Pruitt’s actions may have won some additional friendliness from the Iowa senators for now, a bigger question emerging is whether Trump might have put an extra nail in the coffin of his re-election prospects by forcing Pruitt to make a move that is already pissing off working class, white voters in… Pennsylvania.
From oil industry publication Oil Price Information Service last week:
While [a refinery industry source] acknowledged that Midwest politicians were able to pressure the White House over EPA’s consideration of additional RVO reductions, he said the administration will also have to come to grips with the fact that a failure to provide the sector some relief from RFS compliance costs would be at odds with the president’s promise to preserve and grow U.S. manufacturing jobs.
He noted that 14 members of Pennsylvania’s congressional delegation wrote the president last week asking that he address the “high cost” of RFS compliance, adding that pricey and volatile RIN prices are “undermining the continued viability” of the Northeast’s refining sector.
And no refinery in the Northeast may be under greater threat than Philadelphia Energy Solutions’ 335,000 b/d complex, which earlier this week saw its credit rating downgraded by S&P Global Ratings. In cutting PES’ ratings to CCC- from CCC, S&P cited $550 million in payments the company must make next year as well as its rising RFS obligation costs, which S&P estimated will reach $250 million this year.
“How would it look if the largest refinery in the Northeast — one that Obama saved in 2012 — closes during the Trump administration?” the source said, adding that Trump was the first Republican to win Pennsylvania, a state with more electoral votes than Iowa, since 1988.
The Wall Street Journal yesterday blasted EPA’s move, but also noted this:
These independent refiners provide the sort of blue-collar manufacturing jobs that President Trump promised to protect. Philadelphia Energy Solutions had to lay off 70 workers last year. Ryan O’Callaghan, the president of United Steelworkers Local 10-1, said the EPA announcement makes him fearful for the fate of his 692 members who remain at the refinery. Philadelphia Energy Solutions also uses hundreds of contractors from the building trades unions.
“I voted Donald Trump, I urged my members to vote for Donald Trump, and I urged them to ask their families and friends to vote for Donald Trump,” Mr. O’Callaghan said. “As a union president, to support a Republican candidate for president, there was some backlash. And now we’re left out in the cold. It’s very disappointing. It feels like the government has the chips stacked against us. We’re crushed in between Big Oil and Big Ethanol. I thought President Trump would be able to see through that. Hopefully he changes his mind and goes with workers.” (RS Insider’s emphasis in bold)
To state the obvious, Pennsylvania has more electoral college votes than Iowa. Over three times as many, to be exact.
If Trump loses the Keystone State in 2020 but holds all others, he would have a margin of just fourteen electoral college votes.
If he loses Michigan, too, as most political observers believe is likely given the state’s performance in recent presidential elections and the slim margin by which Trump won there in 2016, a Pennsylvania loss would assure his defeat.
As such, don’t be surprised to see Members of Congress from Pennsylvania going ape over Trump’s big kowtow to King Corn, and perhaps making threats of their own.
The rumor is that Pruitt’s decision will be litigated, at which point, more could emerge about how the decision was reached and what exact political pressure was applied if so—meaning a potential ton of bad press for King Corn and its congressional supporters.