Parameters: Oil vs. Corn based Ethanol - A Tug-Of-War between Trump Administration and Congressional Leaders

Source: TreeHugger

The renewable energy sector seems to be caught up in a 'tug-of-war' lately between the Trump Administration and the Congressional leadership of our country.  Central to the discussion is the percentage of ethanol derived from corn.  How much ethanol should the agriculture industry be tapped for?  In these times of uncertainty, the agriculture industry is fighting 'tooth and nail' for any business they can get.  Although the Trump Administration is fighting equally hard trying to get more waivers for the oil refineries.  Here is an excerpt introducing the fight presently underway from 'Politico Energy' yesterday:

YOU CAN'T ALWAYS GET WHAT YOU WANT: Despite efforts by President Donald Trump to settle a long-running dispute between ethanol backers and the refining industry, progress on a biofuels deal has stalled. Instead, the administration has taken a piecemeal approach to the policy, pushing for an expanded market for higher blends of ethanol, while handing out exemptions to the Renewable Fuels Standard to small refiners.

Trump, for his part, has huddled multiple times with members of his Cabinet, industry and lawmakers from both corn belt and oil states, Pro's Eric Wolff reports. But so far, there's been little progress in striking a grand deal. At odds are the independent refiners, who say they feel financial stress from the RFS, and the agriculture sector, which is anxious to expand the market for corn ethanol.

Trump has promised to allow year-round sales of 15 percent ethanol blends of gasoline, while EPA Administrator Scott Pruitt has so far granted more than two dozen temporary waivers to small refineries that exempt them from the mandate requiring them to blend ethanol with gasoline. "After 18 months of pursuing various regulatory forms of relief and a handful of Oval Office confabs, the merchant refiners ended up with [an increase in E15] taking even more market share away from them in return for some small refiner hardship waivers - and some of them did not even get that," one oil refining source told Eric.

And Pruitt's controversies stemming from his first-class flights, security spending and condo rental from a lobbyist, have left the EPA chief unable to make an aggressive case for instituting price caps many refiners want on the biofuel credits, according to an administration source. Read more here.

Democrats weigh in: House Energy and Commerce ranking member Frank Pallone and Agriculture ranking member Collin Peterson sent this letter to the president on Friday, expressing concern with the waivers issued by Pruitt to small refineries, writing it "undermines the goal of the RFS program, creates uncertainty and economic hardship in the agricultural community, and gives unfair advantage to specific facilities within the refining sector."

 As the public has learned over the past year and a half, the Trump Administration is bent on supporting the 'oil' industry rather than leaning toward the emerging and profitable renewable energy sector.  Despite a large number of investments diverting from the fossil fuel based industries and being refocused on investing in sustainable - renewable energy sources, the current administration chooses to hold onto a dying position.  A recent example is the giant Shell Oil Corporation investing in renewable energy infrastructure -- which was introduced in a blog post written recently on this site.



For those who are unaware of the 'RFS' - the Renewable Fuel Standard - here is a brief introduction and historical background from the Wikipedia page to put the 'tug-of-war' into perspective:

The Renewable Fuel Standard (RFS) is an American federal program that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. The RFS originated with the Energy Policy Act of 2005 and was expanded and extended by the Energy Independence and Security Act of 2007

History

The RFS program requires renewable fuel to be blended into transportation fuel in increasing amounts each year, escalating to 36 billion gallons by 2022. Each renewable fuel category in the RFS program must emit lower levels of greenhouse gases relative to the petroleum fuel it replaces.[1]

The first RFS, usually referred to as RFS1, required that 4 billion gallons of biofuel be used in 2006. This requirement was scheduled to rise to 7.5 billion gallons in 2012. These requirements were passed as part of the Energy Policy Act of 2005. The Energy Independence and Security Act of 2007 changed and broadened these rules. EISA was signed into law by President George W. Bush and the bill was overwhelmingly supported by members of congress from both parties.[2]

The changes required by the 2007 legislation are usually referred to as RFS2. RFS2 required the use of 9 billion gallons in 2008 and scheduled a requirement for 36 billion gallons in 2022. The quota for 2022 was to allow no more than a maximum of 15 billion gallons from corn-starch ethanol and a minimum of 16 billion gallons from cellulosic biofuels.[2]

In reaction to the implementation of the RFS, passage of EISA, and other measures to support ethanol, the Organization of Petroleum Exporting Countries (OPEC) expressed alarm. In 2007, OPEC's secretary general, Abdalla El-Badri, said that increased use of biofuels by the United States could cause OPEC to decrease production. Other OPEC leaders openly worried about "security of demand."[3]

The changes outlined in the Renewable Fuel Standard are indicative of the changing economic (investment) environment unfolding around the world today.  With the Paris Agreement - which is solely based on self-imposed restrictions and projections, each participant is moving toward promoting and investing in a world where sustainable energy plays a much greater role.  I have written about the progress over the course of the Trump Administration.  The posts can be found in the index below or by clicking here.



Conclusion...



The current state of affairs regarding renewable energy is not under debate.  A large number of world countries are moving toward investing and capitalizing on the current momentum toward renwable energy.  The transition must occur sometime.  With the realization that there is not enough oil in the ground to sustain the world at the current rate of usage (see posts here and here), the much needed transition into the renewable energy space is inevitable.



The question is when are the important players (money markets, corporations, governments, etc.) going to move on the transition?  Based on the momentum and actions displayed on the world stage over the last year and a half, the transition appears to have started to gain momentum.  Which is great.  The future of renewable energy seems to be great.  Jobs will continue to be created with new technologies rolling out to the market.  And the opponents of such change will be quieted by the loud cheers of the welcoming countries around the world.  Where do you stand on this issue?  Read up and form an opinion on the matter.



Related Blog Posts:


Parameters: Shells Oil Corporation Invests In Renewable Energy Infrastructure


Thoughts: Trump Administration Realizes Renewable Energy Is Here To Stay?


Do You Need Clean Air To Breathe? An Introduction To Environmental Justice


Environmental Entrepreneurs Weigh In On Repealing The Clean Power Plan


EPA Blatantly Suppresses Scientific Results Regarding Climate Change?


EPA Director Finally Realizes Reality Of Trying To Roll-Back Obama Era Clean Air Act Regulation


How Can The Paris Climate Agreement Be "More Favorable To The U.S."???


Paris Climate Agreement Is A Start Toward The Renewable Energy Future