Oil primary

Can Cruz win the oil primary?

His aggressive support for legalizing oil exports and abolishing the ethanol mandate stand out even in a pro-fossil-fuel GOP.

By Andrew Restuccia and Elana Schor

Even in a strongly pro-fossil-fuel GOP presidential field, Ted Cruz stands out for his devotion to his home-state oil industry and its agenda.

Republicans widely champion an energy platform based on expanded oil and gas drilling, opposition to EPA climate regulations and approval of the Keystone XL pipeline. But Cruz has gone beyond that by pushing legislation to lift the 1970s-era ban on crude oil exports — a prime industry cause that has some congressional Republicans nervous about catching the blame if gasoline prices rise. And while some of his potential White House rivals also want to phase out the federal mandate for blending ethanol into gasoline, Cruz made a point of starkly staking out that position in corn-rich Iowa.

Unlike former Florida Gov. Jeb Bush, Cruz doesn’t have any past ambivalence about offshore oil drilling to explain away. Cruz has also raked in more than $1 million in campaign cash from the oil and gas industry since 2011, outstripping rivals like Florida Sen. Marco Rubio and Kentucky Sen. Rand Paul.

It’s all enough to make Cruz an early target for critics such as the ethanol industry, which accused him Monday of “pandering to Big Oil.”

But the firebrand Texas senator — who on Monday became the first declared Republican presidential contender for 2016 — may still struggle to get oil and gas companies’ open endorsement against likely competitors like Bush, Louisiana Gov. Bobby Jindal and former Texas Gov. Rick Perry, all of whom are also friendly to the industry’s causes. The industry has an embarrassment of riches in finding allies in the GOP primary field and no reason to alienate any of them at this stage.

“It is a little early for industry types to start to choose up sides,” one Republican adviser with close ties to the industry said.

Another industry insider weighed in: “Each one of them is going to have to make their own decision about how they want to position themselves. It’s so early in the process, it might make sense for them to wait and see where everybody is.”

Still, the GOP is so unified in its broad energy agenda — pro-drilling, pro-Keystone, anti-EPA-regulations — that subtle gradations on policy could become significant in making one or two candidates stand out. Cruz may succeed in doing just that with his aggressiveness on approving oil exports and abolishing the ethanol mandate, two oil industry priorities that have yet to make their way into GOP orthodoxy.

Even when the substance of Cruz’s stances doesn’t differ much from that of his rivals, he often pushes his views with a notable lack of caveats.

A Cruz campaign spokeswoman did not respond to a request for comment, but the senator’s allies made the case that Cruz’s positions stem from his strongly held belief in free markets, not an allegiance to the oil industry.

“Ted Cruz was the strongest voice among GOP presidential contenders to call for ending the ethanol mandate,” conservative anti-tax activist Grover Norquist said through a spokesman Monday. He added: “Cruz’s support for ending an archaic law banning the export of oil is consistent with free trade and free markets going back to Adam Smith.”

Other Republicans considering runs for the White House — including Paul, Rubio and New Jersey Gov. Chris Christie — have also called for legalizing crude oil exports, which would allow U.S. oil producers to sell their product in more lucrative overseas markets. But that proposal has gotten a divided response from Republicans in Congress, who say they need to study the implications for consumers’ wallets, and has stirred opposition from some oil refiners, who fear losing access to cheap domestic crude.

Bush has been somewhat in the middle on the issue, saying last year that he could consider lifting the ban “at the appropriate time when we don’t have the refining capacity to take on the light crude that is fast being produced in our country.”

Cruz has shown no reluctance, though: He was one of the first congressional Republicans to favor lifting the ban, and in January he proposed an amendment abolishing it as part of the Senate’s bill to approve the Keystone XL oil pipeline. That haste unnerved Cruz’s Republican colleagues and even the oil industry itself, which warned that voting on the issue before lawmakers had a chance to study it could spoil longer-term efforts to lift the ban. Cruz ended up dropping the amendment.

Cruz’s push for unfettered crude exports is driven by “free market” beliefs, said Charlie Drevna, president of the oil industry trade group American Fuel & Petrochemical Manufacturers, who declined to offer a prediction on the Texas senator’s presidential prospects. (Drevna added that he also hopes to bend Cruz’s ear on abolishing the Jones Act, a century-old law that restricts oil shipments between U.S. ports to U.S.-flagged ships.)

Cruz also made a point of taking his ethanol message to this month’s agricultural summit in Iowa, a crucial presidential caucus state where the EPA-run mandate — known as the Renewable Fuel Standard — enjoys broad support.

“Look, I recognize that this is a gathering of a lot of folks who the answer that you’d like me to give is, ‘I’m for the RFS, darn it.’ That would be the easy thing to do,” Cruz said during his appearance at the ag summit. “But I’ll tell you, people are pretty fed up I think with politicians that run around and tell one group one thing, tell another group another thing. And then they go to Washington and they don’t do anything that they said they would do.”

The oil industry opposes the mandate as a costly subsidy that raises both fuel and food prices. Ethanol producers say the oil companies are just afraid of competition.

Cruz has sponsored a Senate bill to phase out the requirement over five years. While Bush, former New York Gov. George Pataki and Wisconsin Gov. Scott Walker also support phasing out the mandate, Walker’s remarks in Iowa emphasized that he would leave it in place for now.

“In general, on any issue, I’m someone who believes in a free and open market,” Walker said at the time. “But … right now we don’t have a free and open marketplace, so that’s why I’m willing to take that position.” Walker later fended off tea party activists’ accusations that he had flip-flopped on the issue, since he strongly opposed ethanol mandates in his 2006 campaign for governor.

Meanwhile, Pataki emphasized that he’s “a great believer in renewable fuels,” although he added that “I honestly don’t think the federal government should require anybody in America to buy anything,” while Perry warned against going too fast to abolish the ethanol requirement as long as other kinds of subsidies exist. “I don’t think you pull the RFS out … and leave all these other subsidies and mandates in place,” the former Texas governor said.

Cruz, Pataki and Perry were the only potential GOP presidential candidates to speak against the mandate out of the nine who appeared at the summit, according to Tom Buis, CEO of the ethanol trade group Growth Energy. But Cruz’s Nixon-to-China comments stood out and got the most attention, particularly from conservative media.

Buis said Cruz’s prominent pushback on ethanol “doesn’t surprise me” given his Texas provenance. “He seems to be touting this as Profiles in Courage,” Buis said. “The real Profiles in Courage would be to go to his home state and try to take away the tax breaks that oil has had for 100 years.”

The group attacked Cruz’s ethanol legislation Monday, saying: “This is pandering to Big Oil.”

Like Texas lawmakers who came before him, Cruz is also a big recipient of the oil and gas industry’s cash. Oil and gas donors have contributed more than $1 million to Cruz’s campaign committee and leadership PAC, according to data collected by the Center for Responsive Politics. That makes oil and gas one of the top sectors that gave to him, second only to conservative groups.

In contrast, Rubio’s campaign committee and leadership PAC have received less than $500,000 from the oil and gas sector, while Paul’s committee and leadership PACs have received less than $200,000.

Environmentalists are already lining up to savage Cruz as the first in a long line of Republican presidential hopefuls whose ties to the oil industry play into the greens’ plans to drive a wedge between the GOP and general-election voters.

“Americans want clean energy and climate action now, and the more that leading Republicans desperately cling to the priorities of the fossil fuel industry, the more their whole party will be painted as one that puts polluters before people,” Athan Manuel, director of the Sierra Club’s lands protection program, said by email.

Cruz also has hundreds of thousands of dollars invested in the oil and gas industry. Financial disclosure records filed last year show that Cruz or his family purchased at least $50,000 in Chevron stock and at least $15,000 in ExxonMobil stock in 2013, among other energy-related investments. Just last month, Cruz disclosed a purchase of at least $50,000 in stock of Plains GP Holdings, an energy company that transports and stores both crude oil and natural gas liquids.