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In boost for farmers, Trump says he may allow E15 gasoline sales all year

U.S. President Donald Trump speaks during a meeting with governors and members of Congress at the White House in Washington, U.S., April 12, 2018. REUTERS/Kevin Lamarque
U.S. President Donald Trump speaks during a meeting with governors and members of Congress at the White House in Washington, U.S., April 12, 2018. REUTERS/Kevin Lamarque

WASHINGTON — Meeting Thursday with agriculture interests including Iowa’s Republican governor and senators, President Donald Trump said his administration may allow the sale of gasoline containing 15 percent ethanol year-round, which could help farmers by increasing corn demand but faces Big Oil opposition.

After being pressed on the importance of growing export markets for farm products, the president also ordered his staff to review rejoining the Trans-Pacific Partnership, a trade consortium he had vigorously campaigned against.

The moves are the latest by the Trump administration to assuage farmers, who widely supported his election but who have become alarmed over his administration’s waffling on upholding the Renewable Fuel Standard, threats to pull out of the North American Free Trade Agreement and a possible trade war with China. All threaten to economically harm farmers, who already are struggling.

In statements issued after the meeting, Gov. Kim Reynolds and U.S. Sen. Joni Ernst said they expressed to the president the importance to farmers of expanding corn-based ethanol, finishing the NAFTA negotiations and reconsidering the sweeping trade deal.

“There is a growing demand for U.S. agricultural products around the world, and American farmers and manufacturers should be able to compete in these markets,” Ernst said in a statement.

The ethanol move also represents Trump’s attempts to navigate an ongoing feud between King Corn and Big Oil, which has sought to relieve refiners of what it says are the costly burdens of complying with the renewable fuel law.

The Environmental Protection Agency currently bans the higher ethanol blend, called E15, during summer because of concerns it contributes to smog on hot days — a worry biofuels advocates say is unfounded.

Gasoline typically contains 10 percent ethanol.

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“We’re going to be going probably, probably, to 15 and we’re going to be going to a 12-month period,” Trump told reporters during the White House meeting. “We’re going to work out something during the transition period, which is not easy, very complicated.”

Monte Shaw, executive director of the Iowa Renewable Fuels Association, said the possible shift to year-round E15 sales would be “very exciting news.”

“It would be a great morale boost for rural America, and more importantly a real demand boost if it can be moved forward quickly,” he said in an interview.

Currently, refiners are required to blend about 15 billion gallons of ethanol into the nation’s fuel supply annually.

It remains unclear, however, whether the move would help the refining sector — which has been lobbying hard instead for a cap on the price of blending credits that refiners must acquire to prove compliance with the law.

Greater blending of ethanol through year-round E15 sales would theoretically increase supplies of the tradable credits, and thus reduce prices. But at the same time, more ethanol translates to a smaller share of petroleum-based fuel in American gas tanks.

The American Petroleum Institute issued a statement opposing Trump’s proposal, arguing that high-ethanol fuel can damage engines and is incompatible with certain boats, motorcycles and lawn mowers.

Reuters contributed to this report.

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