Trump to Announce Pro-Ethanol Rule Ahead of Iowa Visit

October 8, 2018 Updated: October 9, 2018

The Trump administration will propose lifting a ban on the summertime sale of E15 gasoline ahead of President Donald Trump’s Oct. 9 visit to Iowa, according to a senior White House official.

Up to 97 percent of the gasoline sold in the United States is E10, a mix of 10 percent ethanol and 90 percent petroleum. The Environmental Protection Agency, after extensive tests, approved the sale of E15 gasoline, which contains up to 15 percent ethanol, by issuing a pair of waivers in 2010 and 2011.

The waivers approved the sale of the gasoline for vehicles made in 2001 and later, but prohibited sales during the summertime driving season between May 1 and Sept. 15.

Trump’s announcement in Iowa will come with less than a month left until the midterm elections in November. The ethanol industry supports 43,000 jobs throughout the Iowa economy.

“The president has repeatedly stated the support for the Renewable Fuel Standard program,” a senior White House official told reporters in a conference call on Oct. 8. “He thinks that it’s good to have domestically produced energy here. He thinks this will actually be good for the agriculture industry as well as the economy overall.”

Trump’s move will be a boon to farm-belt Republicans in other states as well. Ethanol is made from corn in a process that converts a bushel of corn into 2.8 gallons of ethanol and 17 pounds of protein-rich animal feed.

Iowa is the biggest ethanol producer in the United States, churning out roughly a quarter of the total ethanol in the nation, according to the Nebraska Energy Office.

The Department of Energy tested E15 gasoline in vehicles running a total of 6 million miles and found no issues, according to the Iowa Renewable Fuels Association.

Congress mandated oil refiners to mix an increasingly larger percentage of renewable fuels into gasoline. Ethanol is the most common ingredient refiners use to meet the obligation.

Trump directed EPA administrator Andrew Wheeler to propose the new rule, which will become effective after a public comment period, barring a legal challenge. A senior White House official said that Trump hopes the rule will be approved before next summer’s driving season.

The proposed rule will also include tightened restrictions on the trading of renewable identification numbers (RINs), a type of credit refiners and importers use to meet their minimum renewable fuel volume obligations.

The new RIN regulations are meant to limit the manipulation of those credits and provide additional transparency, according to a senior White House official.

The price of RINs is closely tied to the renewable fuel obligations. RIN prices more than tripled in 2013 when the EPA imposed a new renewable fuel goal that refiners and importers could no longer meet with E10 gasoline alone.

The American Petroleum Institute, the largest U.S. oil group, opposes lifting the ban, which will eat into the industry’s market share of gasoline sales. The move also faces bipartisan opposition in Congress.

The summer ban on E15 gasoline was put in place as an anti-smog measure, though studies have since shown its environmental benefits are limited. Trump will direct the EPA to write a rule lifting the ban and it would have to be fast-tracked to have it finalized before the next summer driving season.

Reuters contributed to this report.

Follow Ivan on Twitter: @ivanpentchoukov
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