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'Promises Made, Promises Kept On Ethanol,' Trump Tells Farmers

Trump claims protection of ethanol.

COUNCIL BLUFFS, Iowa — President Donald Trump Tuesday directed the Environmental Protection Agency (EPA) to begin a rulemaking process to expand the sale of corn ethanol to include E15 year-round.

“Promises made, promises kept,” President Trump told a full house at the Mid-America Center in Council Bluffs, Iowa. "I kept a promise to people from Iowa and Nebraska. With today’s E15 announcement, I am protecting ethanol.”

Presently, the E15 gasoline product is not offered during the summer months, due to concerns that it creates more smog, a claim unfounded, according to advocates of the renewable fuel.

The administration also wants to offer expanded reforms to the ethanol industry’s renewable identification numbers (RIN) market, which the administration believes will increase transparency.

Meanwhile, the petroleum industry has made it clear that it will litigate this move by President Trump.

It’s worth noting that even though E15 year-round is passed through the administration, this does not supercede state laws, according to Scott Irwin, University of Illinois economist. This includes California, New York, and other big gasoline markets.

Farmer Reaction

It comes as no surprise that farmers attending the Trump rally, here, are very pleased with the E15 announcement.

Craig Hill, Iowa Farm Bureau president and grain and livestock farmer, says it’s a win-win for both consumers and farmers.

“E15 is a safe, clean, and low cost fuel, which can be used in 9 out of every 10 cars on the road today. Since Iowa farmers currently sell one-third of their crop for renewable fuel production, removing barriers to sell it is a no-cost, win-win for both farmers and consumers," Hill stated in a IFB press release. “Keep in mind that this opportunity will take some time. But the long awaited green light to proceed is here and we are thankful.”

“I think it’s awesome,” says Gary Peregine, a Westboro, Missouri, farmer. “It’s going to burn up 2.0 billion bushels more of our corn. A lot of the public is not being told the truth about ethanol. It’s a clean fuel.”

David Laur, a northwest Missouri farmer agrees that he sees the E15 announcement as a move to help out the corn farmers in a low price environment.

“I hope this creates more demand for corn and a higher price on corn for us,” Laur says. "We’ve got a lot of crop out here, right now. If we get a couple of soft years of raising corn, you’ll see the prices come around big time. So, today’s announcement, combined with a few smaller crops, we’ll get the prices up where we need them.”

E15, No Needle Mover

Earlier Tuesday, during a interview with colleagues, Scott Irwin, University of Illinois economist and an ethanol expert, responded to the administration's E15 announcement with skepticism.

“This is much to do about nothing. That announcement will not change my corn supply and demand balance sheet by one decimal point," he said.

“What’s being granted is a RVP (pressure waiver) on the volatility of gasoline blends with 15% ethanol that only applies in the summer months. So, if nothing else happens and you have the green light in much but not all of the country to begin selling E15 year-round,” Irwin says.

Irwin adds that it’s important to note that E15 use, right now, is tiny.

“My estimates of total ethanol usage of E15 and E85 are maybe 300-400 million gallons out of the 14.4 billion gallons. So, we are starting from a teeny tiny base. We have to be careful about getting revved up about short-term expectations,” Irwin says.

Secondly, the U.S. ethanol infrastructure constraint that is not going to change very quickly, Irwin says.

“There are about 1,500 gas stations that have the pumps to offer E15 out of around 120,000 stations in the U.S. In the short-run, this offers constraints on how much of a jump of E15 usage and corn usage we can see through year-round E15.”

Peregine disagrees with the ethanol expert. “I disagree. If the government bumps up the usage and we gear up to produce it, I think it’s a great thing,” Peregrine says. "I’m a ‘forever Trumper’. It’s awesome to see a down-to-earth guy as president and knows how to talk to us. It’s a great thing.”

E15 Facts:

  •  Will increase corn demand by 25-50 million bushels
  •  Can be used in 80% of new 2017 vehicles
  •  Last fall 953 retailers offered E15 via blender pumps
  • USDA thinks that number will increase to 1,400 stores with 5,000 pumps

Industry Response

National Corn Growers Association President Lynn Chrisp says the president is setting the necessary regulatory steps in motion to allow for year-round sales of E15.

“Corn farmers across the country have been advocating for year-round sales of higher ethanol blends like E15 to help grow demand, provide consumers with more options at the pump, and improve economic conditions across rural America,” Chrisp stated in a NCGA press release.

Growth Energy CEO Emily Skor today applauded President Trump’s announcement of plans to lift restrictions on E15.

“We thank President Trump for delivering on his promise to rural America by lifting the summer restriction on E15 sales,” Skor stated in a Growth Energy press release.

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