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Trump Moves to Allow More Ethanol in Gasoline

Trump Moves to Allow More Ethanol in Gasoline

Postby smix » Tue Oct 09, 2018 5:14 am

Trump Moves to Allow More Ethanol in Gasoline
The Wall Street Journal

URL: https://www.wsj.com/articles/trump-move ... 1539045001
Category: Politics
Published: October 8, 2018

Description: President trying to balance a promise to agriculture interests with oil-industry opposition
WASHINGTON—President Trump is moving to allow year-round sale of gasoline containing a higher percentage of ethanol, satisfying campaign promises he made to the Farm Belt, while likely provoking a battle with the oil industry. Mr. Trump has endorsed pushing the maximum to 15% and views it as a way to expand biofuels and help farmers, according to a senior White House official. The directive wouldn’t require refineries to increase their blends, but could spur sales of ethanol and give the ethanol industry more of a grip on the market. Mr. Trump is to make the policy announcement Tuesday, the White House official said. Afterward, Mr. Trump will travel to Iowa, the leading corn- and ethanol-producing state, for a political rally alongside Republican candidates eager to campaign on the issue. As a concession, Mr. Trump also is proposing changes to a credit program which allow oil refiners to buy and sell credits for using ethanol, the White House official said. But those moves are unlikely to win the oil industry’s support. “We’re going to be aggressive in evaluating all of our potential legal remedies surrounding this announcement,” said Frank Macchiarola, a top official at the American Petroleum Institute, which argues the Renewable Fuel Standard is anti-competitive and needs comprehensive reform through Congress, not the administration. Refineries are required to blend fuels with about 10% percent plant-based ethanol or purchase credits from rivals to satisfy obligations. E15, the term for gasoline with 15% ethanol, is currently banned in summer months due to smog concerns. Mr. Trump’s action would direct the Environmental Protection Agency to allow E15 sales year-round. The goal is to have the policy in effect for the 2019 summer driving season, the official said, though the rule-making process and court challenges could complicate the timeline, the White House official said. Year-round E15 has faced fierce opposition from the oil industry, which has complained about costly regulations driven by the required ethanol use, and environmental groups concerned about air quality and a rapid expansion of cropland to grow the corn for ethanol. “Gasoline with more ethanol produces more smog, which can harm the health of people—especially children and the elderly. That’s why the Clean Air Act makes it illegal to sell generic E15 gasoline in the summer,” the National Wildlife Federation said in a statement Monday. The American Petroleum Institute has been running TV ads, directly aimed at Mr. Trump, that argue E15 fuel can damage engines and fuel systems of certain vehicles and other equipment powered by gasoline. That point was amplified in a letter last week to Mr. Trump from a bipartisan group of 20 senators who cautioned against a “one-sided approach” to the ethanol-mandating Renewable Fuel Standard “that favors only one industry stakeholder.” At the same time, Mr. Trump has faced pressure to follow through on his campaign pledge made amid Iowa’s presidential nominating contest. The state’s Republican Sens. Chuck Grassley and Joni Ernst have pushed the president to make good on that and have pitched ethanol as a job producer that reduces a dependence on foreign oil. “He’s been trying to figure out a way to solve this riddle,” said Frank Maisano, an energy specialist with a firm that represents smaller refiners. “The level of intensity this issue has received at the highest levels of government is unusual.” Mr. Trump’s balancing act includes a call to reform the credit system. Refiners purchase RINs—renewable identification numbers—to show they are blending the required level of ethanol. Smaller refiners, which may not have blending capability, have complained about the cost of buying the credits. The White House said it will push for more transparency in the system and look to offset market speculators by limiting RINs to obligated parties.
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