The health of the ethanol industry has been a staple of Iowa campaigns for years and 2020 is no different.
This month, the Trump Administration denied 54 waivers that would have exempted oil refineries from blending ethanol into gasoline. In addition, Trump himself announced the EPA will let states decide new pumps aren’t necessary and gasoline that’s 15 percent ethanol can be dispensed from existing E-10 pumps.
“That saves tremendous amounts of money for the people in the ethanol industry,” Trump said during a phone conversation Senator Joni Ernst tweeted.
During a recent conference call organized by Joe Biden’s campaign, former Iowa Governor Tom Vilsack questioned the election year timing of these announcements.
“I think farmers are justified in being suspicious and concerned about what may happen after an election,” Vilsack said.
What’s the economic impact of these recent ethanol pronouncements? According to Creighton University economist Ernie Goss, 40 percent of U.S. ethanol plants were temporarily or permanently shut down this spring. The pandemic was the main driver of that, but Goss said the administration’s dithering over ethanol waivers for the oil industry didn’t help.
“I won’t say it’s too late, but it certainly should have been earlier,” Goss says of the waiver announcement for 2011 through 2018 waivers.
Iowa State University ag economist Chad Hart said getting retailers to sell a higher blend of ethanol seems to be the industry’s aim.
“Originally it was E85, but a lot of the concentration now has been on E15 and getting that expanded nationwide,” said Hart, during a joint appearance with Goss on “Iowa Press” on Iowa PBS.
President Trump announced a year ago that E15 could be sold year-round. During a trip to Iowa last month, Trump’s agriculture secretary, Sonny Perdue, promised any future oil industry waivers would not reduce the federal ethanol production mandate of a net 15 billion gallons.
“That’s an important consideration,” Perdue said.
Iowa plants produce nearly a third of the U.S. ethanol supply.