The Trump administration is receiving a significant amount of backlash over EPA’s recent decision to grant 31 small refinery exemptions (SREs). As a result, President Donald Trump is expected to meet with EPA Administrator Andrew Wheeler and Agriculture Secretary Sonny Perdue.
“While the current flap is on the impact of the RFS waivers on ethanol producers, U.S. farmers are livid over the impact of bushels not going for ethanol production and the impact of lower corn prices because of reduced demand for bushels used for ethanol production,” says Pro Farmer policy analyst Jim Wiesemeyer.
Trump’s internal polls show support is weakening in key areas, including rural voters, Wiesemeyer says.
“You want to know the real reason he called that cabinet meeting? That was it,” Wiesemeyer says. “He knows how to turn on a dime pretty quickly.”
According to Reuters, the Wheeler and Perdue will present options to boost ethanol demand.
One such option, supported by USDA, is reversing some waivers the administration has granted to refineries. Can they do that?
“They can do whatever they want,” says market analyst Ted Seifried of the Ted Spread. “They can reverse it, though it would look kind of silly for that to happen. But this whole thing is really bringing national attention to what’s going on. Even the conversation I think is a good thing for the ethanol industry—but we need to see action.”
Even if they reverse waivers, the question becomes “what happens now?”
“Do they come back two months later and grant another 37 SREs or something like that?” Seifried says. “Or does this stop the trend?”
He’s not confident SREs will ever be gone for good.
“At the moment, I don’t have a whole lot of confidence they’re not going to just reverse these and then two months later, come back with a whole slew of more,” he says. “Time will tell.”