RIDING THE ETHANOL ROLLER COASTER
TRUMP CLEARS TRACK FOR E15, BUT MORE UPS AND DOWNS ARE POSSIBLE.
After months of Washington infighting, President Trump gave the go-ahead for yearround sales of E15, a potential outlet for the huge stockpile of U.S. corn. Ethanol advocates expect a regulatory race against time to get new EPA rules in place ahead of the driving season next summer, not counting the possibility of a lawsuit by the oil industry or environmentalists to tie up progress.
“It’s a tight time line, certainly, (but) it’s doable,” says Emily Skor, head of trade group Growth Energy. Corn Growers President Lynn Chrisp says higher biofuel blends like E15 will “improve economic conditions across rural America. NCGA will be taking an active role in the regulatory process, urging EPA to move forward with making the president’s commitment a reality by next summer.”
Trump’s order to EPA to rewrite its rules on summertime sales of E15 – “It’s all going to go very quickly,” he predicted during an October 9 trip to Iowa – resolved one of three issues hanging over corn ethanol. Still to come is the EPA announcement (due by the end of this month) of the RFS for 2019. In June, EPA proposed an ethanol mandate of 15 billion gallons, same as this year. Besides the overall mandate, farm groups hope for EPA to offset the effect of the hardship waivers that EPA gave to 19 refineries for 2016 compliance with the RFS and 29 waivers for 2017 compliance. “Even with an E15 waiver, family farmers are at a net loss in biofuel demand over the past two years,” says NFU President Roger Johnson, because of the “demand destruction” of the waivers.
Senator Charles Grassley (R-IA) says he has a sympathetic ally in acting EPA Administrator Andrew Wheeler, when asked if EPA would slow down the waivers. “He’s going to be more careful in granting waivers,” Grassley said.
The oil industry and the National Wildlife Federation say air pollution laws don’t allow EPA to authorize E15 during the summer because the fuel evaporates too easily. The oil industry says it is “aggressively” examining its legal options.
While a member of the Iowa Corn
Promotion Board says year-round E15 could eventually mean a 2-billion-bushel increase in corn demand, economist Scott Irwin of the University of Illinois does not expect any increase in the near term. The largest U.S. retailer of E15 says many service station operators would wait until EPA completes work on E15 before installing pumps to handle the fuel, so they would miss the first season of sales.