The Trump Administration has been a big supporter of corn farmers and the ethanol industry, most recently by keeping a promise the President made a year ago to lift restrictions on E15 – a blend of 15% ethanol and 85% gasoline.
It’s a big win for a heavily-subsidized industry (farmers, in general, are arguably the biggest beneficiaries of government handouts next to the poor, and corn farmers get a huge chunk of that), though it’s a bit worrisome that a Republican administration would be choosing winners and losers in the energy industry much like the Obama administration did before.
However, there are two groups that are never, ever, ever on the same side of anything who have decided that, for this one moment in American history, they must work together. Those two groups are oil companies and environmentalists.
Yeah, things have gotten strange.
Here’s what’s happening: The Clean Air Act specifically permitted E10 – like the blend above, except at 10/90 – but outlawed any blend above that because it could have an impact on the environment. That’s where the environmentalists come in. They are not happy about the impact this is going to have.
Specifically, the environmental law exempts E10—and not E15—from its standard for Reid vapor pressure, a measure of how clean the fuel burns, and how much smog it creates. (Lewis says the question of whether environmental groups would sue was “still up in the air.”)
The Clean Air Task Force and other non-profits oppose corn ethanol production on the basis that its expansion would convert more acres from habitat to farmland, polluting the air and water, and releasing more greenhouse gases into the atmosphere—ultimately, unleashing the worst outcomes of climate change.
Surprisingly, Big Oil has chimed in and said, yeah, “this is unlawful.”
The largest oil refiner group in the country filed a petition with the U.S. Court of Appeals to block the Trump administration’s rule just this week, claiming the EPA overstepped its authority in revoking the restrictions. “A waiver for E15 is unlawful, plain and simple,” Chet Thompson, president and chief executive officer of the American Fuel & Petrochemical Manufacturers, said on Tuesday.
On this point of critique, the oil refiners align with environmental groups, which have made similar charges against E15 in the past. Jonathan Lewis, senior counsel for the environmental non-profit Clean Air Task Force, says the oil groups’ comments filed in April echo conservationists’ complaints. “Their interpretation of the relevant Clean Air Act provisions and why those provisions prohibit the EPA from taking this step were accurate,” he says.
And, to be fair, it is unlawful. The EPA is making changes to legislation – in effect, re-writing it – to suit its needs. The EPA is not elected to do that – in fact, it’s not elected at all. The kind of thing we’ve railed against for years, this non-legislated rule-making, goes against everything stated in the Constitution. So, why would a Republican administration go for it?
For the money. The ethanol industry props up quite a few politicians, and President Trump, in particular, wants to ensure he keeps conservative farmers on his side so that he doesn’t have to deal with threats from the far right (except, of course, providing handouts and demanding handouts are both as far from the far right as it gets). It’s not, as Trump tells farmers “more energy”, but “more money”.
There’s another concern for oil and gas companies: This is probably going to require a major infrastructure overhaul from plants on down to gas stations.
You see, E10 is corrosive, and E15 is even more so. In fact, it’s corrosive enough that in all likelihood pumps, storage tanks, and a lot of other infrastructure making up your basic gas stations will have to be replaced. That type of overhaul isn’t cheap, and the consumer is definitely going to feel it. In fact, you’ll feel it all sorts of ways as it’s likely that our current penchant for starting trade wars will affect the cost of the materials needed to make these infrastructure upgrades.
You’re looking at a time when the economy is great up until the price of gas eats up more and more of your paycheck. Then, things will start going south.
So, whether you’re looking at is as un-Constitutional or as something that will negatively effect your financial status, you may find that you are just as strangely aligned with environmentalists and Big Oil, too.