President Donald Trump has reportedly promised to remove a regulatory glitch that prevented higher blends of ethanol from being sold year-round.
Presently, only 10 percent ethanol is allowed for sale all 12 months, and the oil industry insists that blends above 10 percent damage engines.
“Auto manufacturers have already made the adjustment in automobile design to ensure that there is no damage to engines at ethanol blends higher than 10 percent,” said Kate Thiel, field crops specialist with Michigan Farm Bureau. “On the other hand, reducing the demand for ethanol will almost certainly hurt American corn farmers who are in the throes of an economic downturn and need increased demand for corn if they hope to remain profitable and continue to support their families. Less ethanol also increases our dependence on foreign oil, and that’s a national security issue that every gasoline consumer should take into account.”
Allowing the sale of higher gasoline/ethanol blends would create more demand for ethanol and corn, said Jim Zook, executive director of the Michigan Corn Growers Association.
“Farm income is declining for the sixth year, and we need real solutions,” he said. “For example, moving from an average of 10 percent ethanol to 12 percent ethanol would represent a 20 percent increase in demand. President Trump’s support for allowing higher blends of ethanol, including E15, to be sold year-round is welcome news for Michigan corn farmers. They appreciate that President Trump has stood strong in his commitment to agriculture and hope that he will continue to protect the Renewable Fuel Standard from attacks by EPA and oil companies, including efforts to weaken the RFS by capping RIN (Renewable Identification Numbers) prices or applying RINs to exports.
“Farmers appreciate President Trump’s commitment to move forward with removing this regulatory barrier that directly targets the sale of ethanol,” Zook said. “This fix would support farmers while giving consumers more choice when they fill up at the pump.”
The American Farm Bureau Federation, the National Corn Growers Association, American Soybean Association, National Farmers Union and National Association of Wheat Growers all urged the president before the meeting with himself and lawmakers to follow through on a needed regulatory fix for higher blends and ensure the volumes of renewable fuel as the solution to address farmer and refiner concerns without further undercutting the Renewable Fuel Standard (RFS).
Ethanol producers also expressed its support for changing the RFS standard.
"We are pleased President Trump has vowed to cut the unnecessary red tape holding back the rural economy and stop Mr. Pruitt’s rampant abuse of hardship waivers for refiners at the expense of American-made biofuels,” said Kyle Gilley, Sr. Vice President of External Affairs and Communications with POET, one of the largest ethanol producers in the world. “It’s clear the President recognizes the many benefits of year-round sales of E15 for consumers and for farmers who are suffering and facing new threats from trade wars overseas,” he said.
While there are plenty of questions still surrounding the news, agriculture remains hopeful that political maneuvering surrounding the issue will be minimal.
“Discussions about RIN and allowing ethanol exports to receive them to prove compliance with the Renewable Fuel Standard are ongoing,” said John Kran, national lobbyist with Michigan Farm Bureau. “There are plenty of unknowns about what happened in the closed-door meeting, which was supposed to be the last meeting Trump will have about this topic. There were also conflicting reports from senators who were in the room. Congress could get involved, and there will likely be political maneuvering. We just don’t know enough right now to say what we think happened in the meeting is a slam-dunk for farmers. There is too much conflicting information.”
Details of the closed-door discussion can sometimes obscure the larger picture, Kran said.
“The speculation about how the Iran decision could impact prices at the pump further point to why we need a strong RFS policy,” he said. “Renewable fuel is a key component of national security and can benefit both the farm economy and provide consumers with stability.”
It will take some time to work out the details of Trump’s promise, agreed Thiel.
“The devil is in the details,” she said. “We’re going to wait and see whether both sides can work out an agreement that is good for farmers, good for the economy and good for the environment.”