Time to Keep the Promises for Farmers to Compete in Energy

by James Talent (The Hill/Americans for Energy Security and Innovation) ... (Environmental Protection Agency head Andrew) Wheeler announced more oil industry handouts last month, bringing the total to 2.6 billion gallons over two years, which is enough to eliminate the market for nearly one billion bushels of grain.

Rural Republicans who gave the new EPA administrator the benefit of the doubt are understandably livid. Dozens of ethanol plants across the country have cut production or closed their doors, even as farm communities look to rebuild from recent devastating floods and a demoralizing trade war. Meanwhile, oil refiners like Exxon and Chevron that won the “hardship” exemptions have had multibillion dollar profits.

Democrats are already pouncing on this blunder. Senator Amy Klobuchar, who is running for president, told Iowa caucus goers that “biofuels in the Midwest get screwed” by the EPA exemptions. It is a message winning her new followers among rural voters who overwhelmingly voted for President Trump in 2016. The headlines do not help either. In a Reuters story titled “EPA disregarded biofuel rules to help refineries,” it was revealed that the agency quietly ignored recommendations from the Energy Department, which could find no financial justification for the oil industry handouts.

The truth is that petroleum companies simply worry about losing the battle for market share if consumers get more options at the fuel pump. Biofuel blends reduce emissions and deliver more octane. Moreover, they also cost less, as pure ethanol now trades for about 70 cents less per gallon than unblended gasoline. That is why competition is good for drivers and American energy security. It is also precisely why Congress enacted the renewable fuel standard under President Bush back in 2005.

With all eyes on the Organization of the Petroleum Exporting Countries and gasoline headed toward $4 per gallon in some markets, it is hard to see why any agency would shut out lower cost fuel made in the United States. READ MORE