What is Trump's Ethanol Policy?

From separating migrant children from their parents to criticising French President Emmanuel Macron, Trump has garnered his fair share of controversy. His policy on ethanol is the latest to attract attention, with a recent article in The Wall Street Journal supporting the president's decision to sanction year-round sales of E15, a blend of gasoline with 15% ethanol content. Compared to the usual E10 blend, E15 features 5% more of the renewable corn-based fuel, which has been criticised for its low mileage, potential to damage engines and environmental concerns.

Banned by the U.S. Environmental Protection Agency (EPA) during the peak summer driving months, E15 has been blamed for producing higher levels of ground-layer ozone, also known as smog. By authorising the unrestricted sales of E15 the Trump administration has deviated from the Renewable Fuel Standard (RFS), which was first created under the Energy Policy Act of 2005.

The financial burden of ethanol

Not only is the new policy harmful to the environment, but experts also warn it could damage the national economy. The main fiscal issue associated with ethanol is its lower energy density, with the gas offering just 76,000 BTUs per gallon. This is significantly less than the 114,000 BTUs per gallon offered by conventional gasoline, which accounts for roughly half of all oil usage in the USA. So, to harness the same amount of energy contained in 1 gallon of gasoline, buyers must purchase 1.5 gallons of ethanol. This inevitably pushes up prices, with a recent study suggesting that US drivers pay an additional US$10 billion a year for gasoline RFS.

There are also knock-on effects to consider. For example, around 40% of US corn is used to create ethanol, which in turn reduces corn exports and boosts the price offered to American consumers. Furthermore, around 75% of grocery products contain corn, which by default increases the general cost of living. With social economists warning that 50 million Americans currently struggle to afford basic living expenses, rising food prices could cause major problems for the USA.  

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