Trade

Did Trump Already Nullify His Next Gift to Farmers?

JM Ashby
Written by JM Ashby

The Trump regime announced last week that it would allow year-round sales of E15 gasoline (gasoline that includes 15 percent ethanol) to appease farmers who've been harmed by Trump's trade war with China, but Trump has already undercut the decision.

Trump also announced that he would impose tariffs on all goods imported from Mexico last week and industry analysts say the new tariffs will cost more than farmers will reap from higher sales of ethanol.

“A modest uptick in ethanol demand from year-round E15 pales in comparison to risks posed to the farming sector from escalating trade tensions with Mexico,” said Josh Price, an analyst with Height Capital Markets. [...]

“Politically, agriculture views E15 as a big win,” Scott Irwin, an agricultural economist at the University of Illinois in Urbana-Champaign, said. “My view is that it’s more of an” appearance victory. “The Mexican thing is potentially a big deal because it’s such a big market for corn. We’re messing politically with another important buyer.”

In related news, it's possible that year-round sales of E15 will never take place.

The nation's largest lobbies for oil and petrochemicals have announced that they will challenge Trump's decision in court.

“EPA has left us no choice but to pursue legal action to get this unlawful rule overturned,” said Chet Thompson, the president and CEO of the American Fuel and Petrochemical Manufacturers trade group.

The American Petroleum Institute, which represents the U.S. oil industry, has repeatedly said the administration lacks the authority to unilaterally lift the ban on E15 and that such a move should require an act of Congress.

As you may know, the gasoline industry is legally required to blend a certain amount of ethanol into their gasoline each year under a law passed during the Bush administration. Allowing year-round sales of E15 means the industry will be required to buy even more ethanol.

The petrochemical lobby may also be joined in court by environmentalists. Sales of E15 gasoline have been banned during the busy summer driving season because burning E15 increases smog.

  • muselet

    Ethanol turns out to be a terrible thing to burn in engines. It’s an excellent oxygenate, reducing carbon monoxide and unburned hydrocarbon emissions (it’s also not particularly toxic if traces enter an area’s groundwater). Alas, burning the stuff—heck, just evaporation—creates a witches’ brew of unpleasant chemicals.

    Using food to create industrial quantities of ethanol doesn’t make sense, either.

    No wonder the Trump administration wants year-round E15 gasoline.

    It’s easy for me to sit back and shake my head in dismay—I live in California and E15 isn’t allowed to be sold here—but I know better than to get cocky. The administration wants to rewrite the Clean Air Act to lower standards for all 50 states.

    It makes me a bit queasy to say this, but I hope the American Fuel and Petrochemical Manufacturers and the American Petroleum Institute do sue and prevail.

    –alopecia

    • Badgerite

      Everything seems to be short term interests with these people. As a country, as a people, and as a species we will pay in the long run. They don’t care.