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Conflict Between Ethanol Industry and Oil Refiners


COVID has markedly reduced gasoline consumption, affecting both oil refiners and ethanol producers resulting in mutual conflicts. Following the court decision that forced the EPA to reject requests for waivers from refiners, the oil refining lobby induced a number of U.S. Republican Senators to request the EPA to consider a general waiver to reduce biofuel blending obligations in 2021. 

RFS with Cellulosic Ethanol as an Aspirational Unreality


The granting of waivers to oil refiners is to the detriment of the hard-pressed ethanol industry that is in turn an important market for corn growers.  Oil refiners have obviously suffered from decreased demand despite the lower cost of crude contributing to a relatively constrained "crack spread". In a letter to the EPA, Senators including Shelley Moore Capito (R-WV) and Ted Cruz (R-TX) stated, "ethanol producers and refiners should proportionally share the economic hardships associated with a current decline in fuel demands rather than having government mandates shift the burden of the former onto the latter". 


The American Petroleum Institute commented "EPA should move immediately to employ a general waiver to limit the 2021 obligation". 


Farmers should be placated by recent rises in the price of corn that closed at 420 per bushel on Friday October 23rd.  Ethanol was priced at $1.42 per gallon up 29 cents compared to a five-year low of $0.92 per gallon on March 26th.  Ethanol is 36 cents per gallon higher than gasoline quoted at $1.16 per gallon on Friday, October 23rd. 


The ying-yang between the American Petroleum Institute and the Renewable Fuels Association illustrates the dependence of the ethanol industry on government mandates to survive. The justification for the renewable fuels program has long since passed  with the U.S. having gained energy independence.