President-elect Donald Trump will certainly have his work cut out for him when he takes office in January, but missing from his 100-day plan was any mention of what (if anything) his Administration will do about America’s foolhardy biofuels policy. Enacted under the Bush Administration in 2007 and dutifully carried out by President Obama, the Renewable Fuel Standard (RFS) requires American refiners to blend increasing quantities of ethanol into our nation’s fuel supply. But the issue is a thorny one for Trump, as Reuters reports:
[Biofuels have] pitted two of Trump’s support bases against each other: Big Oil and Big Corn. The farming sector has lobbied hard for the maximum biofuel volumes laid out in the law to be blended into gasoline motor fuels, while the oil industry argues that the program creates additional costs. […]
The president-elect campaigned on a pro-ethanol platform when he visited America’s farm states and biofuels advocates expect he will keep the RFS strong, maintaining annual targets at the minimum set forth by Congress. “Mr. Trump will not turn his back on the American heartland, we believe in him,” said Annette Sweeney, a former state representative from Iowa who was a member of the Trump’s agricultural advisory committee during his candidacy.
These mandates place a large burden on our refiners, and the costs of compliance are rising as the EPA just set quotas for these biofuels at record levels for next year. How these concerns will affect Trump and his team remains to be seen—after all, he, like many other presidential candidates, campaigned hard in favor of these mandates to help win over important primary voters in Iowa.
But this is a campaign promise worth leaving behind, because the travails of our biofuel boondoggle don’t end with the oil industry. This policy exists in a rare kind of sour spot, satisfying absolutely no one but the farmers growing the corn used to produce all of this ethanol. Regular readers will already be aware of the long list of problems the RFS has produced, but it’s worth quickly recapping. These mandates: raise global food prices and starve the world’s poor in the process; fleece U.S. drivers at the pump; have created an environment ripe for fraud; and actually seem to do more harm to the environment than good.
There are ways to reform this. Corn-based biofuels compose the vast majority of the ethanol that’s being blended to meet these quotas, but there exists a so-called “second generation” of alternatives that can do what RFS proponents promised this policy would accomplish—namely, boost American fuel security while simultaneously helping to reduce our environmental impact. Ratcheting down corn-based ethanol quotas while encouraging the use of more of these advanced biofuels would be a good start, and setting more realistic targets (ones that won’t force refiners to look to sketchy secondary markets to stay compliant) would be a smart follow-up.
Alternatively, Trump could decide to scrap the whole program altogether. Any of those options would be preferable to the system we’re currently operating.