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Robert Rapier

Robert Rapier

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Has Trump Helped Or Hurt The U.S. Ethanol Industry?

Last week at a campaign rally in Jacksonville, Florida, President Trump made a puzzling claim. Near the end of a story about Kamala Harris, Trump said “The great state of Iowa — where I made ethanol possible for them…”

I can’t even begin to understand what that means, but let’s review some ethanol history.

The ethanol industry was kicked into high gear in the U.S. with the implementation of the Renewable Fuel Standard (RFS). The RFS was first passed into law with the Energy Policy Act of 2005, and it was subsequently expanded in 2007 (both under President Bush). The RFS established quotas of renewable fuels that had to be blended into the fuel supply, and an enforcement mechanism to ensure those quotas were met.

The RFS resulted in an explosion of ethanol production in the U.S. When the RFS was passed, the U.S. produced under 4 billion gallons of ethanol. By 2008, President Bush’s last year in office, ethanol production had more than doubled to over 9 billion gallons.

In 2016, President Obama’s last year in office, U.S. ethanol production stood at 15.4 billion gallons. This represented an increase of 67% over President Bush’s last year in office, but the production increase had been set in motion years earlier by the RFS.

In 2019 — the most recent full year of production — ethanol production stood at 15.8 billion gallons. That represents a 2.6% increase under President Trump from President Obama’s last year in office. (Ethanol production has actually fallen sharply this year as a result of the fuel demand slump caused by Covid-19).

Certainly the U.S. ethanol industry was well-established before President Trump was elected. In fact, I warned after he was elected that some of his picks signaled trouble for the ethanol industry, and that trouble did materialize.

But the President was talking about Iowa, which is the country’s leading ethanol producer. Did he perhaps do something in Iowa to “make ethanol happen?” No, Iowa’s ethanol production statistics mirror those of the rest of the country. Under President Trump, Iowa’s ethanol production has risen from 4.1 billion gallons during President Obama’s last year in office to 4.23 billion gallons in 2019. That represents an increase of 3%.

So, what is President Trump really claiming here? I have no idea. He definitely didn’t “make ethanol happen” for the U.S. or for Iowa. President Bush could legitimately make that claim, but not President Trump.

Related: Iraq Ships More Crude Oil Despite OPEC Output Cut Pledge

But it’s not the first time Trump has made an exaggerated claim about U.S. energy production. Last July, President Trump made the following statements in West Texas during a speech:

“Under the Trump Administration the United States has increased oil production by 3.1 million barrels per day. That’s some number, never been anything like that number. For the first time in nearly 70 years, we have become a net energy exporter, and the United States is now the number one producer of oil and natural gas on the face of the earth.”

It is true that oil and gas production have continued an ongoing surge during President Trump’s administration. But the crude oil surge started in 2008 under Barack Obama. During Obama’s tenure, U.S. oil production rose at the fastest rate in history.

The natural gas surge started in 2005 under George Bush, and also led to an unprecedented increase in natural gas production. The reason for the production surges was the fracking boom.

Thus, the claim lacks context. Further, the U.S. had become the number one producer of both oil and natural gas during President Obama’s administration.

In any case, neither claim is completely true, but the ethanol claim would appear to be completely false.

By Robert Rapier

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  • George Kafantaris on October 06 2020 said:
    Corn ethanol is far more precious than the Iowa farmers realize -- but not to burn it as a blend with gasoline in the internal combustion engine. Rather, ethanol can be used to make hydrogen to power fuel cells. Indeed, ethanol has so much hydrogen that it can be used straight in certain fuel cells.
    Such technology could have been mainstream today if the Trump administration had spent but a fraction of the billions of dollars it has spent to extract methane from coal. Nonetheless, the path of hydrogen from ethanol is straightforward and it is still there. The next administration can thus pursue it to help the Iowa farmers realize the full potential of their precious ethanol.

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