Making Strides for Ethanol in 2017

Ethanol industry needs to capitalize on the progress made and press forward in 2017 on multiple important issues, holding Trump to his promise to support the RFS. This Grassroots Voice column appears in the January 2014 print issue.
By Brian Jennings | December 26, 2016

The wind is at our backs as we ring in the new year, so let’s capitalize on the progress we have made and continue making strides for ethanol in 2017. We convinced the U.S. EPA to set the final conventional biofuel volume under the renewable fuel standard (RFS) at the statutory level of 15 billion gallons for 2017. While EPA was two years behind schedule, it is notable the agency did not invoke the legally shaky “blend wall” waiver excuse this time. Instead, EPA agreed with our argument that record-high gasoline consumption led to increased ethanol use, justifying the move to push volumes to the statutory level. (The American Coalition for Ethanol and other organizations have sued EPA over the misuse of the general waiver authority for the 2014-’16 RFS volumes and we anticipate a decision by the U.S. Court of Appeals for the D.C. Circuit in the next several months.) A record 19.28 billion gallons of renewable fuel will be required this year, which will boost the economy and save consumers money at the pump. Getting the RFS back on track is timely, given Donald Trump is set to be inaugurated as the 45th president of the United States this month.

Rural America can and should take credit for the historic election result. Voters in key counties in states such as Iowa, Indiana, Michigan, Minnesota and Wisconsin who voted for Obama in 2008 and 2012 voted, in 2016, for Trump instead of Clinton. These swing voters believe the Obama administration handed down too many regulations and provided rural America with too little economic relief. Trump would be wise to reward rural voters for their support, which means our industry needs to outline specific ways the new administration can help.

While this column is being written in advance of Trump announcements about who will advise him on key energy issues at EPA, USDA, the Department of Energy and the White House, it’s our job to capitalize on rural America’s political goodwill and influence the first 100 days of the Trump presidency and the 115th Congress. It is essential we are engaged to help Trump keep his campaign promise to support the RFS and provide regulatory relief to rural America.

One of the first opportunities you will have to do that is ACE’s D.C. fly-in March 22-23. We plan to meet with the new leadership at EPA and the White House, along with members of Congress, most of whom were not in office when the RFS was signed into law. It is incredibly important for ethanol advocates to be engaged because agriculture wasn’t the only voting block to provide essential support for Trump. Some high-profile people in the oil sector were at his side early on as well, namely fracking entrepreneur Harold Hamm and business mogul Carl Icahn, who is a majority owner of a refiner claiming to be harmed by the price of RINs (renewable identification numbers used to demonstrate compliance) under the RFS.

Icahn is personally lobbying Trump to change the RFS point-of-obligation because he believes RIN prices are rigged. Valero and other merchant refiners who are complaining RIN prices are too high have sued EPA for not moving the point-of-obligation. While Trump campaigned in support of the RFS, he also promised regulatory relief to oil companies, so a potential flashpoint will be how the Trump administration balances the interests of rural America and the oil sector.

Another priority for us will be working with the new EPA or Congress to provide Reid vapor pressure (RVP) regulatory relief for blends above E10. We have a strong case to make. The RVP limit hurts fuel retailers and forces consumers to pay more at the pump. With Trump promising to erase a host of burdensome regulations, the RVP limit on higher ethanol blends needs to be on his list.

Finally, we still have a compelling argument to make for the octane value of ethanol. While it is uncertain whether Trump will maintain the current CAFE-GHG standards, we are well-positioned to help his administration appreciate how high-octane fuel such as E25 or E30 can improve engine efficiency and reduce our dependence on OPEC and foreign sources of oil.

The wind is at our backs, let’s keep moving forward.

Author: Brian Jennings
Executive Vice President
American Coalition for Ethanol