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Big Corn vs. Big Oil: The Battle Over Biofuel

The planning for a meeting between moguls in the oil and corn industries is in its preliminary stages, but President Donald Trump is not scheduled to attend the summit, which could define the future of the U.S. biofuels market.

Sources told Reuters that though the President will not be in attendance like he was in previous renditions of this meeting, representatives from agency leaders would convey the executive branch’s positions. Other executives from the corn and oil industries will also attend.

Trump will be travelling to California next week to oversee progress on his notorious border wall proposal that would ostensibly keep illegal immigrants from Mexico out of the U.S.

Big Corn and Big Oil have been dueling over the future of the Renewable Fuels Standard, which requires oil refiners to mix biofuels like corn-heavy ethanol into their fuel. The RFS program started under President George W. Bush to help create demand for corn and reduce U.S. fossil fuel imports. The Midwest farm belt benefits from the policy, but the oil refiners do not—they lose petroleum-based market share of fuels and meeting the blending requirements costs them hundreds of millions of dollars.

A total of 27 small-sized U.S. refiners—a higher number than usual—have sought waivers from the biofuels standard program from the U.S. Environmental Protection Agency (EPA), Reuters reported last month, citing sources familiar with the matter. Refiners have been emboldened by President Trump’s anti-regulatory policies and court rulings last year that extended the criteria for EPA to grant waivers, the sources noted.

While U.S. President Donald Trump is a vocal supporter of the U.S. oil industry, he also supports the RFS, especially corn-based ethanol, which protects farming jobs in the states with large Republican majorities in the Midwest.

By Zainab Calcuttawala for Oilprice.com

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  • NickSJ on March 09 2018 said:
    Ethanol was sold by environmentalists based on two false arguments. First, they claimed we were running out of oil and would be forced to use "renewable" fuels like ethanol. Since then, domestic oil production has skyrocketed as new technology unlocked huge reserves which were previously uneconomic to produce.

    Second, they claimed ethanol would benefit the environment. Unfortunately, the truth is just the opposite. Millions of acres have to be removed from food production or from natural habitat to produce a small fraction of the motor fuel we use in an energy inefficient process. As a result, the poor around the world have to pay more for food, and there is less land left in its natural state.

    This is a typical example of how environmentalist falsehoods hurt people and hurt the environment, but their programs persist anyway as political payoffs to special interest groups.
  • Toby on March 09 2018 said:
    Brazilian sugarcane ethanol has an EROEI (energy return on energy invested) of c. 8:1. That makes sense. U.S. corn ethanol has an EROEI of at best 2:1, and probably closer to 1:1. In other words, it produces close to ZERO net energy. In other words, it makes "money" for captains of industry, but little to no positive replacement for depleting petroleum reserves (which also have a declining EROEI).
  • Tom on March 09 2018 said:
    Ethanol benefits all of us by replacing carcinogenic compounds in gasoline used to boost octane. Ethanol has an octane rating of 113 and is useful to replace Benzene, Toluene and Xylene in gasoline. Two of my friends are battling Cancer, when are we going to take a step in the right direction and clean up our carcinogen packed gasoline?

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