Washington still looking for a solution to the plague of ethanol

Fuel Fix:
After years of discord over the federal mandate requiring ethanol to be blended into the nation's fuel supply, hope for a deal appeared on the horizon this week.

President Donald Trump said he was considering allowing the year round sale of E15 - gasoline with a 15 percent concentration of ethanol compared to the standard 10 percent - in what appeared to be a large carrot for the ethanol producers and corn farmers he wants to cut a deal with.

But Trump has a problem in the form of the oil industry, a segment of the economy he has cultivated since taking office last year and with whom ethanol producers have been jousting for years.

The American Petroleum Institute released a statement Thursday afternoon saying that the EPA did not have the authority to allow E15 sales year round - currently E15 is banned during summer months due to seasonal air pollution rules.

"The industry plans to consider all options to prevent such a waiver. The RFS is broken and we continue to believe the best solution is comprehensive legislation," said API Downstream Group Director Frank Macchiarola.

RELATED STORY: With flood of EPA waivers, refineries find way around ethanol mandate

Among oil lobbyists, there is concern that Trump's bid for a quick solution could derail a more substantive fix of the ethanol mandate, known as the Renewable Fuel Standard, which was passed in 2005 in part to reduce U.S. dependence on Middle Eastern crude.

Sen. John Cornyn. R-Texas, the majority whip, has been working on legislation for months to that end, but so far has struggled to bring together the Midwestern corn states and oil states like Texas and Oklahoma required for a bill to pass.
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Ethanol is a poor substitute for gas.  It ruins small engines and causes costly repairs.  If it were worth using it would not need a mandate at all.   It is sustained by the agribusinesses and the politicians they support.  It was initially pushed as a substitute for importing foreign oil.  Now it is having the opposite effect. 

Because refineries are having to waste money on nonproductive RINs which have soared in price, it takes away money that could have been used to convert their operations to refining the abundant light crude produced by the shale revolution.  If those changes were made by the refiners, the US could virtually eliminate the importing of oil.  Ethanol is having a perverse effect on the market.

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