Trump’s Billion-Dollar Gambit: An Ethanol Deal to Meet the Demands of Farmers and Big Oil

September 23, 2019

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by Tim Mullaney (CNBC) President Trump is planning an ethanol deal to please U.S. farmers angry that many oil refiners have been freed from obligations to use oil-based fuel. The deal, still not yet reduced to a written bill, is likely to make oil companies that have been given permission to stop blending ethanol with gasoline at some of their refineries to make up the lost production at other plants, according to the president and CEO of the Renewable Fuels Association. The price of ethanol fell more than 30% between mid-June and mid-August, when the administration announced the latest list of refineries excused from ethanol blending.

The Trump administration appears to be moving toward a deal to placate ethanol interests who have blamed the president’s deregulatory push for forcing the closing of 17 ethanol plants. It’s a deal where the administration is trying to do damage control and balance the demands of farmers and oil companies, two of Donald Trump’s most loyal constituencies.

The deal, still not yet reduced to a written bill, is likely to help oil companies that have been given permission to stop blending ethanol with gasoline at some of their refineries to make up the lost production at other plants, said Geoff Cooper, president and CEO of the Renewable Fuels Association, a trade group for ethanol producers. READ MORE

Reynolds says Grassley was ‘bad cop’ during Oval Office meeting on ethanol (Radio Iowa)

Biofuel Supporters Want Deal In Writing (Iowa Public Televisiones; includes VIDEO)

Reps back plan to stop abuse of the waiver system for refineries (WWLP)

State looks for answers to ethanol waivers (Mankato Free Press)

Trump wants to limit RIN prices to help oil refiners: source (E&E News)

Trump tries to make peace between refiners, biofuel producers (Farm Progress)

Biofuels Industry Still Awaits Waiver Package (Energy.AgWired.com; includes AUDIO)

Biofuel Waiting Game Continues: Deputy USDA Secretary Touches on Reallocation, Infrastructure, But No Decisions Yet (DTN Progressive Farmer)

Biofuel Announcement Now on Hold as Trump Seeks Still More Info (DTN Progressive Farmer)

WAITING FOR ‘BIG PACKAGE’ FUELS ETHANOL FRUSTRATIONS IN THE CORN BELT (Successful Farming)

Did Trump Cut A Secret Ethanol Deal With Iowa’s Governor?(Hot Air)

Wheeler claims ethanol demand not impacted by SREs (Ethanol Producer Magazine)

Ernst discusses SRE deal as Trump meets with Big Oil senators (Ethanol Producer Magazine)

Grassley discusses SRE reallocation proposal during media call (Ethanol Producer Magazine)

EPA Official Says Agency 'Anticipates' Releasing 2020 RVO by Nov. 30 (OPIS)

U.S. Biofuel Industry is Still Waiting (Hoosier Ag Today/NAFB News Service)

BIOFUELS CAUCUS TELLS EPA TO ACCOUNT FOR VOLUMES LOST TO RFS WAIVERS (Brownfield Ag News; includes AUDIO)

Another renewable fuel plant closes as Iowa leaders wait for White House biofuels fix (Des Moines Register)

One of Iowa’s biodiesel plants has closed amid RFS uncertainty (Radio Iowa)

GRASSLEY FRUSTRATED WITH DELAY OF TRUMP’S BIOFUELS PLAN (Brownfield Ag News)

QUESTION OF WHEN ON BIOFUELS PACKAGE (Brownfiels Ag News)

Ethanol production falls to lowest level in 3.5 years (Biofuels Digest)

Senator expects Trump to announce limit on credits (E&E News)

Trump's impeachment battle could delay biofuels deal: industry sources (Reuters)

Farmer Support for Trump Rebounds Amid Impeachment Inquiry (Farm Journal AgWeb)

Excerpt from Ethanol Producer Magazine: This is not the first time an EPA representative has claimed SREs aren’t impacting the ethanol industry. Those claims, however, have been strongly disputed by a variety of biofuel trade groups and federal lawmakers representing farm states.

During the Sept. 19 hearing, Wheeler was also questioned about the possibilities of E30. Rep Roger Marshall, R-Kan., listed several attributes of E30, including its 60 percent reduction in tailpipe emissions, the fact that is usually priced 20 cents per gallon lower than gasoline, and the potential for achieving better gas mileage. He asked Wheeler if the EPA is looking into E30 and his thoughts on the future of E30 blends.

We just completed the [year-round] E15 and right now we’re looking at the overall RFS program,” Wheeler responded. “We look at all blends of ethanol, so we are looking also at E85.” Wheeler noted he isn’t aware if the agency is looking specifically at E30 but said he could get back to Marshall with that information.

Wheeler’s appearance before the committee came the same day as President Trump’s White House meeting with senators representing Big Oil regarding the administration’s SRE reallocation proposal. That proposal was originally expected to be released last week. It is currently unclear when the proposal will be made public and what it will include. Both Sens. Chuck Grassley, R-Iowa, and Joni Ernst, R-Iowa, have expressed distrust of the EPA’s handing of ethanol issues and have stated they need to see a final written proposal before they can announce their support.

A full recording of the hearing is available on the House Committee on Science, Space and Technology website. READ MORE

Excerpt from Reuters: The agriculture industry has said the waivers add pain to growers already suffering from lost foreign markets due to the U.S. trade war with China.

Farmers on a call with media on Thursday implored the Trump administration to reach a deal soon to make up for the exemptions.

“Many farmers are losing patience with the president, and he has to rein in his EPA right now or there will be political consequences to that because of the economic damage we’re suffering,” said Ron Heck, an Iowan soybean farmer.

Trump is keen to maintain the support of the agriculture industry, a crucial constituency leading into next year’s presidential election.

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Democratic presidential candidates including Senator Cory Booker and Mayor Pete Buttigieg this week have criticized the Trump administration’s broad use of small refinery waivers.

“Farmers and producers have been forced to the brink under Trump,” Montana Governor Steve Bullock, another presidential hopeful, said on Wednesday. READ MORE