A small court victory over King Corn

While it doesn’t get as much press as trade wars, the war on women or the actual war in Afghanistan, there’s been a different war going on for several years now between oil refineries and the ethanol industry. Under the weight of the Renewable Fuel Standard, smaller refineries without the capability to blend ethanol into your gasoline have been burdened with heavy costs by having to purchase Renewable Identification Numbers so they can stay in compliance with the law.

That began to change (at least a bit) under the Trump administration when the EPA began granting waivers to some of these small refineries to keep them afloat. King Corn (in the form of the Advanced Biofuels Association and other ethanol pushers) responded by bringing a lawsuit against the EPA, demanding they stop giving out the waivers. Last week their efforts ran into a brick wall when a judge denied the request. (Washington Examiner)

A federal appeals court granted oil refiners a victory Friday by denying a renewable fuel group’s attempt to block the Environmental Protection Agency from exempting oil companies from blending ethanol in gasoline.

The U.S. Court of Appeals for the District of Columbia Circuit denied the Advanced Biofuels Association’s request for a temporary injunction to stop the EPA from exempting oil companies from the Renewable Fuel Standard. The standard requires refiners to blend billions of gallons of ethanol and other biofuels into the nation’s fuel supply each year.

“Petitioner has not satisfied the stringent requirements for an injunction pending court review,” the court said in a brief one-page order issued Friday.

This has come as a tremendous disappointment to not only the plaintiffs but the National Biodiesel Board, along with our Senators from Iowa. They claim that these waivers are harming the market for ethanol and are bad for corn farmers, particularly while the trade wars with China are ongoing. But you’ll notice that they’re not terribly concerned for all the workers at refineries who wind up going bankrupt, such as one in Pennsylvania.

None of this is directly the fault of either the refineries or the farmers. The poison toad in this particular garden is the Renewable Fuel Standard itself (RFS). If it weren’t for the biofuel blending mandates, the oil and gas industry wouldn’t be taking these kinds of hits. The only reason that “demand” for corn to make ethanol is so high is that the government created an artificial level of demand. People are still free to make as much biofuel as the market will bear and they’ll need corn for that. The rest of the corn could be used for something else. You know… like food.

The waivers are a fair compromise on the part of the President and the EPA since he is apparently intent on keeping his promises to Iowa and the ethanol lobby no matter the cost to the industry. It would be better to see President Trump kill the RFS entirely, but if that’s not going to happen he needs to defend the EPA’s ability to grant waivers to facilities that are unable to come into compliance.