President Trump, who campaigned for the White House as a friend of corn ethanol, said on Thursday that the administration is “very close” to approving year-round sales of a 15 percent blend of ethanol into gasoline. “We’re taking care of your ethanol,” said Trump during a trip to Iowa, the top corn-growing and ethanol-producing state.
Early this week, the pro-ethanol Renewable Fuels Association (RFA) pitched year-round E15 as a domestic antidote to the tit-for-tat trade war hitting U.S. agriculture. Farm groups and ethanol makers have pushed for years for EPA approval of higher blend rates, such as E15, than the traditional 10 percent blend. The oil industry has fought E15 tenaciously. At present, E15 is barred from sale during the summer.
More than 35 percent of the U.S. corn crop is used to make ethanol. Proponents say E15 would boost corn consumption, leading to an increase in corn prices and farmer income.
“I’m very close, I have to tell you, to pulling off something that you’ve been looking forward to for many years. And that’s the 12-month E15 waiver,” said Trump during a panel discussion at Northeast Iowa Community College, near Dubuque. “I’m getting very close to that. It’s a very complex process. And I stuck with ethanol, and most other candidates, they weren’t there. To put it mildly.”
Trump has spoken repeatedly in favor of E15 this year, though the administration has yet to deliver the waiver of anti-smog rules that would allow summertime sale. Oil-state senators tried during the winter and spring to pair approval of year-round E15 with beneficial provisions for refiners, such as a price cap on the credits, known as RINs, that they must buy to comply with the Renewable Fuel Standard (RFS) if they do not blend enough ethanol. Iowa Sen. Chuck Grassley and other lawmakers blamed EPA administrator Scott Pruitt for subverting Trump’s policies.
The new EPA administrator, Andrew Wheeler, “is looking to farmers, ethanol producers, and refiners for reasonable ways to reform a system he views as broken,” said Forbes. “He’s in favor of the refiner-supported proposal that would count exports of ethanol as credits against the RFS, something the ethanol lobby vehemently opposes, but has also said he’d consider ethanol-friendly proposals such as expanding the sale of fuels that contain higher blends of ethanol, such as E15, as a part of any global reform deal.”
Bob Dinneen, RFA chief executive, said Trump spoke in support of E15 “outside the context of some kind of ‘deal’ to help refiners. Refiners are doing quite fine today, seeing record profits and unprecedented exports. Farmers are not.”
An oil industry spokesman took the opposite view. When Trump spoke of a “complex process,” said the spokesman, it sounded like the “RFS deal that senators and cabinet officials had on his desk to have year-round E15, ethanol exports, and market transparency reforms.”
In Iowa, Trump exulted over a pledge by EU leaders for larger imports of U.S. soybeans. “We just opened up Europe to you farmers,” said Trump. With typical hyperbole, he said Europe “never existed” before as an export market. In fact, the EU bloc is the No. 4 market for U.S. food and ag exports. Like China, Canada, and Mexico, the European Union imposed retaliatory tariffs on U.S. products, including farm goods, in response to U.S. tariffs on imported steel and aluminum.
“I hope the president’s trip to Iowa gives him a sense of urgency,” said Grassley. “Farmers are depending on the president for a speedy resolution. I’ll continue to press this point to the administration on all fronts.”