June 15, 2019

What Trump's new ethanol rules mean for you

Trump has just been on a tour in Iowa in which he takes credit for loosening restrictions on the use of ethanol in gasoline.  The move will be of huge benefit to Iowa corn farmers so will undoubtedly shore up Trump's vote in the next election. And putting more ethanol in your tank will cost you slightly less than using pure gasoline. But you will also get less mileage out of a fill-up.

So who loses from the new rules? All Americans.  America should not be growing corn at all, other than for inclusion in dinners.  Import restrictions, tariffs, are the only thing keeping corn farming alive in America. Corn is the principal feedstock for making sugar in America. And sugar is the main feedstock for making ethanol.  And making sugar out of corn is absurd.  You can make it for half the price out of sugarcane -- which is a very widely distributed tropical crop.


Sugarcane, botanically a very large grass, so very quick growing

Americans would have sugar at half the price if imports of it were allowed from Brazil, the Caribbean and many other places around the world. Ethanol would be REALLY cheap if you made it from Brazilian sugar or imported it directly from the very efficient Brazilian distilleries.

And there is no strategic argument for America to be self-sufficient in sugar production.  There are major supliers close by and all are well protected by  American military power. You can grow sugarcane in almost the whole of central and South America, rainfall permitting. Australia too is a major sugar from sugarcane producer.

It is a considerable irony that Trump is being a Greenie in all this.  He justifies his facilitating of domestic ethanol production as  the use of a "renewable" resource, which it certainly is.  You grow it. And Greenies never care about the cost of anything.

But there is no conceivable chance of anything changing.  No politician would risk alienating all those Iowa votes


At the end of May, the Trump administration announced it would allow for the year-round sale of gasoline with higher concentrations of ethanol.

That action addressed a rule the Environmental Protection Agency had in place preventing the sale of so-called E15 fuel, which contains 15 percent ethanol and 85 percent gasoline, between June 1 and Sept. 15. The purpose was to prevent air pollution and curb dependence on foreign petroleum, but the ban has stopped some retailers from selling E15 at all because of the need to change out pumps.

One benefit is that gas prices could come down. As previously reported by FOX Business, E15 is typically priced about 5 to 10 cents cheaper than regular gasoline.

“Now in the summer months when consumers are driving more and oil companies usually jack up their prices,” Iowa Renewable Fuels Association executive director Monte Shaw said in a statement to FOX Business, adding that the new statute will allow drivers to save money at the pump.

According to the Renewable Fuels Association, E15 was approved for use in model year 2001 and newer vehicles by the EPA in 2012. The group says 90 percent of cars on the road are approved to run on E15.

Shaw previously noted that E15 has been in high demand where it is offered. E10, however, is still the default regular fuel sold across most of the country.

The move is also a boon to corn farmers, since corn is widely used to make ethanol domestically. Allowing for the year-round sale of E15 will give farmers more avenues to sell corn, which could bolster revenue especially when prices are low.

SOURCE






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