According to Bloomberg, the Trump administration is about to screw over his pals in the refinery business by continuing one of the industries most hated rules: renewable fuel requirements.
People close to the discussions say Trump is merely helping out a few farmers in the midwest, by keeping their corn crop rich with government mandated demand at the refineries.
Others believe the President is turning his back on the refiners, an industry beset with onerous environmental rules and regulations.
Bloomberg says the EPA is going to requite 4.24b gallons of biofuels in 2018, down from 4.28b gallons in 2017 — including 238m gallons of cellulosic biofuel, down from 311m gallons.
Overall, Trump will continue to mandate the 15b gallon quota, which is the highest allowed under Federal Law — mostly fulfilled by ethanol.
According to a May forecast from the U.S. Energy Information Administration, motor fuel demand is set to climb to about 143.5 billion gallons in 2018 from about 143 billion in 2017. Given that forecast, if the conventional renewable fuel quota were fulfilled entirely by ethanol, the fuel would represent 10.5 percent of total projected gasoline consumption. Most gasoline sold in the U.S. is E10, or 10 percent ethanol. Refiners can turn to other fuels, including renewable biodiesel, to help meet the target.
The American Petroleum Institute, which represents oil producers and refiners, had asked the EPA to set lower quotas that would reflect about 9.7 percent of projected gasoline demand; some refiners had pushed a lower 9.5 percent.
The net result is somewhat clouded by an already weak energy sector. A key player in the additive space for refiners, NEU, is lower by just 1.2%. Other refiners like VLO, HFC and CVI are down roughly 3%.
Some of the ethanol/biofuels plays are marginally lower — a big nothingburger for the status quo.
The corn ETF, $CORN, was anticipating this result, judging by the recent share price action.
Long live King Coal and Queen Corn! #MAGA
Mixing ethanol w/ gasoline is bullshit. I always look for ethanol free gas stations to fill my car. Gasoline is denser fuel in terms of energy per unit. I get more miles per gallon out of gasoline than if it is mixed with ethanol for the same price.
Can ‘o corn for the farm boys!