ethanol mandate

The holding company Icahn Enterprises was subpoenaed for information about its founder’s attempts to change U.S. biofuel policy while he was an informal White House advisor, reported Bloomberg.

Almost as soon as the EPA set the biofuel targets for the new year, Texas Gov. Greg Abbott requested a waiver that would exempt one-fourth of U.S. refining capacity from the Renewable Fuel Standard for the coming year, reports Argus Media. Meanwhile, the White House was reported to schedule a meeting for Thursday between the oil industry and ethanol producers to discuss possible changes to the 10-year-old RFS.

In a potentially significant change to the U.S. ethanol mandate, the EPA is considering whether to allow exports of ethanol to be counted toward the volume requirements in a law intended to boost the domestic consumption of biofuels, said Reuters, citing two unnamed sources. The ethanol trade group Growth Energy said the proposal cast doubt on the Trump administration’s support for biofuels, including corn-based ethanol.

In 2007, Congress set a goal of mixing 36 billion gallons of biofuels, the bulk of it coming from second-generation "advanced" fuels, into gasoline annually, beginning in 2022. Economist Jonathan Coppess of the University of Illinois says the "actual, effective floor" for biofuels will be 20 billion gallons, based on the recent U.S. appellate court ruling that clarifies the EPA's power to adjust the so-called Renewable Fuels Standard.

Iowa Gov. Terry Branstad, the Trump administration's nominee for U.S. ambassador to China, says he is assured that a change in the Renewable Fuels Standard sought by oil refiners "is not going to happen," reported Radio Iowa. But a White House official told Reuters the proposal was under review, although the administration took no position "either way on this issue at this time."

The so-called ethanol mandate guarantees the biofuel a share of the gasoline market. Because of this, the Wall Street Journal says "some of the world's biggest oil companies" will see a windfall of more than $1 billion from the sale of renewable fuel credits associated with the mandate.

In a step the ethanol industry called a game changer, HRWT Oil Co. said it will sell pre-blended E15 at four fuel terminals in the Midwest and Mid-South. Gasoline stations have been slow to offer E15 despite EPA approval, partly because of difficulties in acquiring and dispensing the fuel.

The EPA proposal for the 2017 biofuels mandate would drive consumption of renewable fuels by at least half-a-billion gallons above the traditional rate of a 10 percent blend into the gasoline supply, say U-Illinois economists Scott Irwin and Darrel Good. The petroleum industry has argued the fuel market is saturated at the 10 percent rate.

Businessman Donald Trump says he will look to Iowa Gov. Terry Branstad for advice on ethanol, a favorite fuel in farm country but under perennial attack as a boondoggle, reported the Des Moines Register. Branstad "is a tremendous guy and a friend of mine, and we're going to talk about it," Trump said at a news conference in North Dakota ahead of a speech on energy policy.

In a step that pleased no one, the EPA proposed a small increase in the biofuels share of the gasoline market for 2017. The overall target for biofuels would rise to 18.8 billion gallons, up by 700 million gallons from this year, with corn ethanol earmarked for 14.8 billion gallons, a 300 million-gallon increase.

Thanks to the prolonged decline of petroleum prices, gasoline costs less than ethanol nowadays. But the upside-down situation is not likely to impair exports, says Good in an article at farmdoc daily.

The government could issue an updated target for biofuel use by late spring or early summer, said EPA administrator Gina McCarthy at the North American Agricultural journalists meeting.

The EPA proposal to relax the ethanol mandate could pinch the market for biofuels made from crop debris, grass and wood, says a front-page story in the Des Moines Register.

The trade group Growth Energy sued the EPA last month because it was far behind schedule in setting the ethanol mandate for 2023, the first year the agency has a free hand in drafting the regulation. A consent decree, if approved, would resolve the complaint and oblige the EPA to propose the renewable fuel program by Sept. 16 and finalize it by April 23, 2023.