Renewable Fuels Standard

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 corn ethanol industry squabbled over a rumored White House overhaul of the Renewable Fuels Standard, which guarantees biofuels a share of the gasoline market and provides a market for more than a third of the U.S. corn crop. By the end of the day, however, the White House knocked down talk that it would allow year-round sales of a 15 percent blend of ethanol, a step up from the 10 percent blend that is now standard, and potentially a large expansion in ethanol sales.

As a candidate, Donald Trump supported corn ethanol and, one month after taking office, he reiterated his view, telling the National Ethanol Conference, "renewable fuels are essential to America's energy strategy." The industry is under perennial attack by the oil industry and by some environmental groups, that want to reduce or eliminate the federal mandate to use biofuels.

With President-elect Donald Trump figuratively looking over his shoulder, Scott Pruitt assured Farm Belt senators that he will support the Renewable Fuels Standard, which guarantees biofuels a share of the gasoline market, if he is confirmed as EPA administrator. Pruitt is state attorney general in Oklahoma, an oil-producing state, which raised questions about whether he would enforce the biofuels mandate.

The ethanol industry is too well-established in rural American to be dismantled, Agriculture Secretary Tom Vilsack told Bloomberg as the deadline nears for an EPA announcement of the so-called ethanol mandate for 2017. "The Renewable Fuels Standard is solid," Vilsack said.

Food and ag policy consultant Michael Torrey, a former Senate staffer and USDA official, is leading the Trump transition effort for the Agriculture Department, reports Politico, citing an organizational chart circulating on Capitol Hill. Torrey was was a deputy assistant agriculture secretary and later deputy USDA chief of staff during President George W. Bush's first term.

Myron Ebell, the head of Donald Trump's transition team for EPA, "is a long-time opponent of the Renewable Fuels Standard and ethanol policies," says DTN. In addition, Ebell, who works at the libertarian Competitive Enterprise Institute, "also is a renowned skeptic of climate science."

National policy adviser Sam Clovis says the Trump campaign is "looking very hard at putting a farmer or rancher in charge of the EPA." Given the impact that federal regulations can have on the sector, Clovis said on the AgriTalk radio program, "we think this would be an appropriate issue for us."

Seven-term U.S. Rep. Steve King says ethanol is the root cause of the challenge he faces in the Republican primary election to represent northwestern Iowa in the U.S. House. During the "Iowa Press" program on Iowa Public Television, King said it was a "a fair statement" that he attracted opposition because he supported Texas Sen. Ted Cruz in the presidential caucuses.

DuPont says in a court filing that EPA's decision to lower the targets for the Renewable Fuels Standard puts at risk its investment in a 30-million-gallon-a-year cellulosic plant in central Iowa, reports DTN.

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.