Ethanol industry sees Big Oil’s hand in EPA rule

Source: By Dustin Hoffmann, AgriBusiness • Posted: Monday, April 8, 2019

Imagine if you went to the supermarket to purchase your groceries. You wanted to pick up a certain brand of cereal. However, you couldn’t buy it because of the time of year. You could buy another brand of cereal and survive. It isn’t that you haven’t bought another cereal. It’s just you want the cereal you want, and you can’t have it.

Now imagine the store makes an announcement that they will carry your cereal all year round. You would feel happy. Let’s just say that as the day gets closer, you are starting to worry it may never happen because the other cereal companies don’t want you to have your cereal all year round. The change isn’t stopping anybody who wants to eat their brand from buying it, it just lets you get what you want all year round. What’s more the decision to have your cereal all year round still doesn’t mean every store would carry it. It just means they would have the option to carry it all year round if they wanted to.

Doesn’t make a whole lot of sense, does it? Welcome to the world of the ethanol industry and the push to have year-round E15.

The Environmental Protection Agency’s (EPA) year-round E15 rule is open to opinions for another four weeks. The part they were hoping ethanol supporters would focus on was the fact the blend would be available all year. It is the Renewable Identification Number (RIN) reforms they are trying to get through in the other part of the bill that is sticking in the craw of the ethanol industry.

Renewable Fuels Association’s President and CEO Geoff Cooper says it is easy to see the EPA is favoring the oil industry in the RIN reforms part of the E15 rule.

Cooper says the way the rule is going to be configured, the benefits of getting E15 to the pumps year-round is going to be offset by the economics of the new policy. The rule will make the blend available, but there will be a stronger incentive for stations to not even carry it.

Cooper says there needs to be some certainty for producers and fuel stations very soon. The clock is ticking.

Iowa is the largest producer of ethanol and has a big financial stake in how this all plays out. The Iowa Renewable Fuels Association estimates the ethanol industry contributes over $5 billion dollars to the state’s economy.

Ethanol supporters are feeling like they have been had. They have been pushing very hard to get E15 blends available year-round. The saying goes, “the squeaky wheel gets the grease.” Well, it seems the EPA has decided to grease the squeaky wheel and then still throw it in the scrap pile.