Agribusiness rent seekers may kill ethanol compromise

Bloomberg/Fuel Fix:
A tentative deal to revamp U.S. biofuel policy appeared to collapse Tuesday when the White House indefinitely delayed an expected announcement of the planned changes, according to three people familiar with the move.

The postponement of a directive outlining the deal may mark the end of the latest effort to overhaul the American renewable fuel mandate with an eye on lowering costs for refiners forced to blend biofuels into gasoline, said the people, who asked not to be named to discuss internal deliberations.

Despite months of negotiations, the Trump administration has struggled to find a balance on a contentious issue that divides two of the president’s key constituencies: Midwest farmers and refiners in Pennsylvania. On the campaign trail in 2016, Donald Trump promised to support ethanol, a pledge embraced by farmers who grow the corn used to produce it.

Senator Chuck Grassley, a Republican from Iowa who threatened to call for Environmental Protection Agency Administrator Scott Pruitt’s resignation over the dispute, cheered the proposal’s apparent failure with a post on Twitter. "Pres Trump helped farmers by rejecting bad ethanol deal," Grassley said. "I appreciate. GREAT NEWS."

The planned directive -- in the works for weeks -- was meant to specifically outline planned changes that have been contested since the tentative deal was struck at the White House last month.

Even before Trump was presented with the draft document, farm state senators were attacking the proposal. Grassley told reporters Tuesday he thought Pruitt had “betrayed the president” with his agency’s handling of the biofuel mandate.

Senator Joni Ernst, also an Iowa Republican, accused Pruitt of "breaking our president’s promise to farmers" in remarks to the S&P Global Platts Energy Podium in Washington on Tuesday. Ernst later wrote on Twitter that Trump "just assured me he won’t sign a deal that’s bad for farmers."

The plan’s apparent demise was celebrated by biofuel producers. Bob Dinneen, president of Renewable Fuels Association, said the group was "happy the president continues to recognize the importance of our industry to America’s farmers and rural economies across the nation."

Emily Skor, chief executive officer of Growth Energy, a biofuel trade group, said it looks forward to “refocusing this conversation” toward farm income and filling-station prices.
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This fight isn't about Pruitt.  It is about forcing American consumers to purchase a defective product that ruins small engines and forces refineries to pay big bucks for worthless RINs when the money would be better spent converting their refineries to handle the light crude produced from shale wells.  The effect of this policy is that it leads to importing more foreign oil because US refineries were originally designed to process heavy crude.

In other words, it is increasing dependency on foreign oil rather than decreasing it.  It is a bad product for consumers and it is a gift to farmers who are driving up the cost of tortillas in the process.  The media insist on playing this story as a fight just between farmers and refineries, but they leave out the most important part of the trade, consumers. 

Someone should consider bringing a class action against the agribusinesses on behalf of all the people who have been forced to pay for repairs to outboard motors and chainsaws and other small engines that have been damaged by this defective product.

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