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Ethanol executives: E15 sales year-round benefit big oil too

Photo Courtesy of the Iowa Renewable Fuels Associaton

President Donald Trump yesterday voiced his support for E15 sales year-round. The President’s endorsement gained support throughout the renewable fuels industry.

Monte Shaw, Iowa Renewable Fuels Association (IRFA) executive director, says President Trump supporting E15 sales year-round is good news for the ethanol industry. However, he reminds us actions have not yet been taken.

“It’s very positive – the President has recognized that the restrictions on E15 are ‘ridiculous and unnecessary,’” Shaw said. “We have to keep our guards up because Ted Cruz wants to tie E15 with some nasty RFS waivers. E15 is suppose to benefit rural America and consumers at large. It’s not supposed to be the spoonful of sugar that helps the RFS waiver poison go down. We need to make sure the President moves forward with what he said publicly to action.”

Renewable Fuels Association (RFA) president and CEO Bob Dinneen notes there is confusion surrounding President Trump’s favorable remarks. It is unclear whether or not year-round E15 sales will be tied to an additional proposal, assisting refiners, such as RIN cap. Dinneen believes further compromise is unnecessary.

“The volatility waiver would expand demand for ethanol, which would have a beneficial impact on any refiner concerned about the cost of compliance with the RFS,” Dinneen said. “It would get more gallons of a lower priced fuel into the marketplace and more credits available to be used, thus lowering the price of those credits. It would provide an additional benefit to RIN prices, which the refiners have been after.”

Shaw says year-round E15 sales could benefit several parties: the renewable fuels sector, oil refiners, rural America and American consumers.

“On the rural America side, it’s pretty straightforward,” Shaw said. “I think we could see 10s of millions of gallons of additional demand in the short-term, which means we’re producing more ethanol, grinding more corn and corn prices would be higher than they otherwise would be. So that would be an immediate demand driver for more corn grind. Over time, that could from 10s of millions of gallons to 6 to 7 billion additional gallons of ethanol demand a year. That’s a lot of corn, so that’s why it’s important to get this started.”

“On the consumer side, it’s pretty simple,” Shaw said. “E15 is not hard for consumers to figure out, that’s why they adopt it so quickly when retailers give them that choice. It’s a lower cost, higher octane. It burns better in my engine and it saves me money. That’s not a hard sell to consumers, whether we’re talking Tennessee or Iowa.”

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