Energy Environment

Report: Trump’s EPA to Scale Back Biofuel Subsidies After Promising More Subsidies

JM Ashby
Written by JM Ashby

Like Trump's deployment of troops to the southern border, I consider this to have been another political stunt, but this is probably flying under the radar for everyone except the farmers who thought they were about to see a windfall and Trump himself who promised them a windfall.

First, you may recall that about month before the midterm elections, it was reported that the Trump regime was going to allow year-round sales of high ethanol blends. Trump's EPA was also reportedly going to discontinue a program that allows the oil and gas industry to bypass legally-mandated quotas for blending biofuel by purchasing biofuel credits (like a carbon tax, but for biofuels) instead.

This would have led to a windfall for Midwestern farmers because the gasoline industry would have been legally required to buy even more of their crops, but it looks like that's never going to happen.

In fact, Reuters now reports that the Trump regime is actually moving in the other direction and will reduce the amount of biofuel the oil and gas industry is required to blend.

The standard, which expires in 2022, was established in 2007 to boost the Corn Belt economy and help wean the country off of fossil fuels. Refiners are required to blend increasing amounts of biofuels like corn-based ethanol into U.S. gasoline and diesel each year, or purchase blending credits from companies that do.

The two sources, who requested anonymity because they are not authorized to speak publicly about the matter, said on Monday the EPA was planning to slash the 2022 target to bring it closer to current market realities, but added that the agency had not settled on a number.

For the first time, the EPA wants to officially rewrite the congressional targets for 2020 through 2022. The Trump administration has tried to reduce compliance costs for refiners, drawing the ire of biofuel producers and their legislative backers. [...]

“We are going to ask and we expect to see lower volumes across the board,” Derrick Morgan, a lobbyist for the American Fuel and Petrochemical Manufacturers, said in a phone interview. [...]

Biofuel backers say the program should retain loftier targets in its final years to encourage companies to keep investing in new plants and technology.

If I was forced to pick a side between the oil and gas industry and the biofuel industry, I would choose a sweet meteor of death, but I don't possess the Infinity Gauntlet so in this one specific case I find myself siding with the oil and gas industry.

In 2018, the biofuel industry feels like a big mistake. I mean, there's a very good reason why sales of high ethanol blends are banned during the summer. Ethanol contributes to smog even more than regular gasoline does so sales are limited during the busiest travel season.

When Congress passed the law requiring the gasoline industry to blend ethanol in 2007, some people thought biofuels were the future. I can remember thinking that myself, but we live in the future now and biofuels are not the future; electric cars, trucks, and even planes are.

Trump visited Iowa on October 7th where he personally announced that his regime would be enacting the pro-ethanol policies that would have delivered a windfall to farmers in Iowa, but this is where we are now.

Trump's word isn't worth spit.

  • This is definitely one of those “Leopards eating people’s faces party” situations.

  • muselet

    Adding an oxygenate to gasoline makes sense, sorta kinda. The additional oxygen can aid in reducing unburned hydrocarbons, and in winter—when there are often inversion layers—that means less toxic air. (Ethanol is a less awful oxygenate than MTBE, which the oil industry first chose, because it’s not as toxic when, not if, it leaks into the groundwater.)

    However, with modern engine management units ethanol isn’t actually needed to get lower levels of unburned hydrocarbons. The onboard systems are smart enough (or “smart” enough, if you prefer) to optimize combustion cycle-by-cycle.

    Also, using corn to make ethanol—which is the way it’s done in the good ol’ US of A—is stupidly expensive and wastes a perfectly good food crop.

    So yeah, in the absence of a sweet meteor of death, I must reluctantly choose the petroleum industry over the biofuels industry.

    –alopecia

    • The use of ethanol over the last decade (perhaps more) is more about farm subsidies than it is about environmental protection. Without all that money for the corn, the farmers would have to plant something else…something harder and more expensive to grow. Not to mention the fact that they would have to find markets to sell the excess corn or the new crop to, which they don’t have. And which Trump has made next to impossible now because of his idiotic tariffs. It’s the same with the introduction of corn syrup into most of our pre-processed food. Corn crops have been over producing for decades and they simply needed to create a domestic market for it. Heaven forbid the GOP actually follow through on their Free Market principles.