Trump Pushes the Ethanol Blend Wall

By Merrill Matthews

President Donald Trump intends to hand out $12 billion to various farmers to offset the financial losses they are facing due to his trade war. That’s his attempt at directly padding his supporters’ pockets. He announced his plan to indirectly help farmers during a recent visit to Iowa, saying he may issue a “12-month E15 waiver.”

The president was referring to standards for ethanol, a mostly corn-based fuel blended into gasoline. The waiver would allow the sale of gasoline that contains 15 percent ethanol year-round. E15 blends are usually prohibited during the hot months due to smog concerns. Unfortunately, E15 is less environmentally friendly than previously thought and harms American gas tanks.

Ethanol standards can be traced back to the mid-1970s. U.S. crude oil production began to decline and Middle Eastern countries began restricting their oil exports to punish the U.S. for its pro-Israel policies. In response, Congress began looking for ways to reduce U.S. dependence on imported oil while creating a more environmentally friendly alternative to gasoline. So the government began subsidizing ethanol.

Then in 2005 Congress passed the Energy Policy Act, which created the renewable fuel standard, or RFS. Instead of subsidizing ethanol, the new law mandated that 4 billion gallons of ethanol be mixed into gasoline beginning in 2006.

However, the Great Recession led to a downturn in economic activity and gasoline usage leveled off for years, even as innovative drilling techniques dramatically increased our supply of crude oil. But static gasoline demand created a problem: The RFS envisioned the country using more gasoline and thus ethanol every year.

As a result, the Environmental Protection Agency began scaling back the amount of ethanol to be blended into gasoline in order to keep the gasoline-ethanol “blend wall” at about 10%Even so, ethanol producers wanted to put even more ethanol in our gas tanks because that increases the demand for, and therefore the price of, corn. So they began asking to increase the blend wall to 15%.

Carmakers have pushed back against E15 arguing that it would harm many older engines. The Renewable Fuels Association says that nearly 90% of 2018 models are approved for E15. But the association concedes, “RFA estimates that approximately 34 percent of the estimated 235 million cars, trucks, and SUVs on the road today are clearly approved by the automaker to use E15 (including FFVs).”

That means that two-thirds of the cars in service right now might be harmed.

There’s more. Environmental groups are increasingly concerned that corn-based ethanol may not be the clean energy option they once thought. Farmers use energy to run the machinery that clears fields and plants, harvests and transports corn to a processing plant. Is that fuel-consuming process “cleaner” than just putting that gasoline in our cars?

Iowa produces more corn-based ethanol than any other state—nearly twice as much as second place Nebraska—and since it is the first state up in the quadrennial presidential primaries, nearly every presidential candidate, Republican or Democrat, promises to keep Iowa corn flowing into our gas tanks.

President Trump supported ethanol from the get-go. And now he sees it as a means of smoothing the rough patches created by China’s retaliatory tariffs on many U.S. farm products. Increasing the blend wall to E15 means more demand for corn, which means higher prices and more money in farmers’ pockets—or maybe it just offsets some of their tariff-related loses.

Merrill Matthews is a resident scholar with the Institute for Policy Innovation in Dallas, Texas.

This article originally appeared in the the East Texas Review.

2 Comments

  1. Merrill, a few thoughts on your article.

    There is no such thing as a “Blend Wall” this is just one of the oil industries “War on Ethanol” Terms.

    E-15 is strictly a consumer choice fuel. No one is forced to use this fuel.

    E-15 offers the consumer higher octane, at a reduced price, with lower emissions. E-15 is the most tested fuel in history, and has been successfully used by consumers driving over 5 Billion Miles. Yes 5 Billion Miles. All light duty cars and trucks produced since 2001 are approved to use E-15 by the EPA.

    Your statement regarding ethanol production: “Is that fuel-consuming process “cleaner” than just putting that gasoline in our cars?” Is truly laughable.

    As if gasoline just magically appears at the gas station pump, and there are no “Production Emissions, Wars, Military presence all over the word, pollution etc.” insuring that gasoline will be there at the pump? How ridiculous.

    Ethanol has about 55% of the carbon footprint that that gasoline you are talking about has. Mixing ethanol in gasoline significantly reduces vehicle emissions. Our Military is not scattered all over the world “protecting our ethanol supply lines”

    What the Farm and Ethanol people are asking for is permission to compete in the market. Currently E-15 is restricted by meaningless rules that serve no one’s interest except the oil industries monopoly at the gas pump.

    E-15, Called Unleaded 88 is an Engine Smart, Earth Kind, quality fuel.

    Check out http://www.fixourfuel.com

  2. Merrilll, a few thoughts on your article.

    There is no such thing as a “Blend Wall” this is just one of the oil industries “War on Ethanol” Terms.

    E-15 is strictly a consumer choice fuel. No one is forced to use this fuel.

    E-15 offers the consumer higher octane at a reduced price with lower emissions. E-15 is the most tested fuel in history and has been successfully used by consumers driving over 5 Billion Miles. Yes 5 Billion Miles. All light duty cars and trucks produced since 2001 are approved to use E-15 by the EPA.

    Your statement regarding ethanol production: “Is that fuel-consuming process “cleaner” than just putting that gasoline in our cars?” Is truly laughable.

    As if gasoline just magically appears at the gas station pump, and there are no “Production Emissions, Wars, Military presence all over the word, pollution etc.” insuring that gasoline will be there? How ridiculous.

    Ethanol has about 55% of the carbon footprint that that gasoline you are talking about has. Mixing ethanol in gasoline significantly reduces vehicle emissions. Our Military is not scattered all over the world “protecting our ethanol supply lines”

    What the Farm and Ethanol people are asking for is permission to compete in the market. Currently E-15 is restricted by meaningless rules that serve no one’s interest except the oil industries monopoly at the gas pump.

    Check out: http://www.fixourfuel.com

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