Earlier this month we talked about President Trump’s ill-advised plan to extend the sale of E15 blended ethanol gasoline year round. The plan flies in the face of common sense and causes additional problems for consumers, particularly boaters and those who use small engine lawnmowers and similar devices. While it may make him a few more friends in Iowa, other parts of the country don’t bow down before King Corn and aren’t likely to take it as well. This week, Pennsylvania Senator Pat Toomey chimed in, reminding the White House that the Keystone State is one of the ones which shocked many observers by going Trump’s way in 2016, arguably cementing his victory. (Conservative Review)
In an interview Thursday with CRTV, Sen. Pat Toomey, R-Penn., explained how the new rule by itself could end up hurting jobs in his home state.
“Whenever you’re dealing with changing the rules on ethanol, it seems you me, you ought to address the heart of the problem,” he said of the ethanol mandate. “This is a disastrous policy, an invention of the government that leads to these huge costs that are essentially unmanageable for merchant refiners in particular.”
Toomey would know a thing or two about how the mandate and its regulations affect refiners; there are two big ones in Pennsylvania that have had a rough time under the current regulatory scheme. And they won’t get any relief under the new rule, he says.
Toomey is very familiar with this subject. In Pennsylvania, several smaller refineries have already felt the pain from the Renewable Identification Numbers (RINs) market and seen the damage it does to their bottom line. They employ quite a few people in Pennsylvania, too.
“They have no ability to generate RINs and no ability to blend ethanol; they therefore have to go out and buy these RINs, this completely artificial construct,” Toomey explained of PES and the other large Pennsylvania refiner, Monroe Energy. He adds that this scenario is “devastatingly expensive” and unsustainable.
As a matter of political calculations, is it really worth it for Trump to toss even more gifts to Iowa while delivering a financial blow to places like Pennsylvania, West Virginia and virtually the entire Gulf Coast?
Toomey also spoke rather generously (in my opinion, anyway) about there being a “natural market” for ethanol blended gasoline and allowing the market to determine what volumes are required. The market portion of the comment is true, but do you honestly think that anyone outside of the left coast and predominantly leftist cities would be crying out for gas mixed with ethanol if it went away? Why would anyone prefer a fuel like E15 that delivers three to four percent fewer miles per gallon? (E85 “flex fuel” actually gives you 15% to 27% fewer miles per gallon than regular gasoline.) E15 gas is also subject to phase separation when the vehicle is operated in even moderately humid climates, introducing water into fuel lines and other engine components.
And in exchange for all of that, we wind up undercutting the oil and gas industry (which provides far more jobs around the country) and making a few people wealthy selling RIN credits to refineries which can’t blend ethanol. Pennsylvania is probably one of the last states that Donald Trump wants to tick of over the next two years before his reelection bid. Toomey makes a good point which the White House should be considering.