OPINION: EPA Rule Changes Are Enough To Upset Both Big Corn And Big Oil

Norman Rogers | Contributor

It is not every day that the Environmental Protection Agency decides to institute policies beneficial to both America’s farmers and refiners. In fact, a workable solution that helps both sides went unfound for a decade and many believed that it would remain that way. Yet, just as the Trump administration proved critics wrong by hosting a summit with North Korea and by passing one of the largest tax relief packages in American history, it has done so again by improving the lives of thousands of farmers and blue-collar industrial workers.

On March 12, the EPA announced a common sense rule that will increase competition by restoring market forces  unapologetically moving the conservative agenda forward.

The first prong of the EPA’s rule — loosening arbitrary government restrictions on renewable fuel standards — has been met with overwhelming approval from farmers, ethanol industry insiders and energy professionals. The change dispenses with unnecessary red tape restricting the ethanol industry from producing fuel containing 15 percent ethanol (E15) during the summer months. The decision to allow for the year-round sale of E15 was the right thing to do for the ethanol industry, which was previously hamstrung by government regulation. Unshackling the sector not only fosters increased competition, but it also provides a much-needed bonus to American corn farmers throughout rural America. 

The second prong of the EPA’s plan clamped down on rampant biofuel credit speculation  a change that lobbyists for the ethanol industry opposed. Special interests can decry this change all they want, but the truth of the matter is that the biofuel credits, known as renewable identification numbers (RINs), created a captive marketplace that was just as egregious, abusive, and at odds with the free market as the red tape on E15 sales.

Refiners that can’t create renewable fuel gallons as obligated by the Renewable Fuel Standard can purchase surplus RINs from third parties, initially issued to the big oil firms who created more renewable fuel than needed but who often sell them to Wall Street for use in an unregulated, non-transparent speculative trading marketplace, and remain in compliance with the law.

Unfortunately, almost every refinery in America fits into this camp as they do not blend fuel. Biofuel has a limited shelf life and should be mixed onsite — by the people that own the gas pumps, which only big companies like BP and Shell have. As a result, everyone needs to buy RINs to comply with the law, so their cost has reached astronomical levels, costing double many refineries’ payroll costs and bringing many to the brink of bankruptcy. 

No one can with a straight face say that the Trump administration was wrong for taking a stand on this issue. In fact, the leading argument against acting in opposition to high RINs costs — that it will harm farmers by lowering demand for ethanol and renewable fuel — is not even backed up by the data.

Stopping RINs speculation does not reduce the number of renewable fuel gallons mandated by law — it merely reduces the price of the RFS compliance credits on small refineries — so to argue that the Trump administration’s rule will hurt farmers or anyone other than the RINs sellers and speculators themselves is laughable on its face.

For the last two years, President Trump has been accused of being in the pockets of both Big Oil and King Corn, but the EPA’s changes should prove that isn’t true. By doing the right thing for America’s farming communities and blue-collar workers, Trump’s EPA willingly and knowingly upset high-profile lobbyists on both sides for the sake of opening the free market for thousands of farmers and blue-collar workers in a truly historic way. It should be commended and encouraged to finalize the released proposal, which is entirely in line with the America first agenda, not the other way around.

Norman Rogers is a board member of the CO2 Coalition and a policy adviser for the Heartland Institute, and is the author of Dumb Energy: A Critique of Wind and Solar Energy. He holds a master of science in physics from the University of Hawaii and a bachelor of arts in physics from the University of California at Berkeley.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

Tags : environment tech environmental protection agency epa ethanol norman rogers opinion
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