Ethanol Proponents Praise Year Round Sales of E15

May 11, 2018  | 3 min  | Ep4338

Higher prices at the pump usually translate to calls for alternatives to black gold.

Friday the president held a fuel efficiency policy meeting with auto executives.

As California officials weigh legal action over the freezing of requirements at 2020 levels, Corn State lawmakers continue to push the administration over the Renewable Fuel Standard.

John Torpy leads off our coverage.

The biofuels fight went to 1600 Pennsylvania Avenue this week as the battle over year round E15 sales and the RFS took center stage. The closed door meetings ended with both sides claiming victory.

Iowa Senator Charles Grassley is pleased with President Trump’s decision to allow the sale of E15 year round.

Sen. Charles Grassley, R – Iowa,” So we got the president, to order the EPA director to allow E15 year round that's very good victory.”

Some experts see a great deal of work ahead for biofuels. University of Illinois agricultural economist Scott Irwin thinks even with a green light, getting E15 the pump is going to be difficult.

Scott Irwin, Agricultural Economist, University of Illinois, “The very people that are fighting the RFS are the very people you're going to have to convince to be adding E15 in in their retail stations.”

One concession gained by ethanol proponents is the elimination of a cap on the price of RINs – the certificates blenders must purchase to prove mixing took place. The biofuels industry has charged capping prices would have limited ethanol’s growth.

The meeting also yielded a proposed change to how RINs are calculated. In a reversal of EPA’s previous position, the scheme would allow exports of ethanol to qualify for the program. This move could reduce the amount of RINs refiners and blenders would have to purchase to meet RFS standards. The change might push down ethanol demand and, presumably, the market price of all renewable fuels. If adopted, the measure would violate WTO rules and, potentially, spark retaliatory tariffs from American trading partners.

Agricultural groups described the export idea as problematic. The National Farmers Union is skeptical of the idea and the Renewable Fuels Association is equally troubled.  

Combatants on both sides of the issue will have to wait for EPA to put the final changes in writing. Administrator Scott Pruitt now insists his agency has the authority to alter the RFS after previously questioning if the jurisdiction might belong to Congress.

For Market to Market, I’m John Torpy. @tvtorpy

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