Senator Chuck Grassley (R-Iowa) was the moving force behind a recent decision by the Environmental Protection Agency to back away from a plan partially deregulating the mixture of biofuel (in practice, corn based ethanol) within gasoline and diesel fuels sold in the United States.
Specifically, the EPA under administrator Scott Pruitt has considered two deregulatory measures: one would have reduced the biodiesel requirement directly; the other would have changed the “compliance credits” system by allowing exported renewables to count toward domestic quotas.
The oil industry, to which the Trump administration often pays heed, wanted some measure of deregulation here. This March, as the new administration settled in, a Forbes blogger was reporting that ethanol policy was “set for big change” due to refineries and their political pull.
Smaller and mid-sized refiners, especially, have complained that the cost of complying with the mandates has skyrocketed of late.
But Grassley is the chairman of the Senate Judiciary Committee, which can hold up the confirmation process for Trumpian judicial appointees, and some are suggesting that this was a key bit of leverage in getting what he wanted from Trump. The President is said to have called Pruitt and told him to leave the Renewable Fuel Standard alone.
A few years ago ethanol came under political attack on the ground that it was driving up food prices. In 2008 Lester Brown called it “one of the great tragedies of history” that the United States “in a misguided effort to reduce its oil insecurity by converting grain into fuel for cars, is generating global food insecurity on a scale never seen before.”
Left Wing View
But the appeal of the notion that corn-for-fuel takes away from corn-for-food in a zero sum game, so that ethanol use contributes to world famine, seems to have faded in the years since the GFC.
In 2017, the left in the U.S. seems on the whole friendly to ethanol in particular and biofuels in general. Daniel Gross, in Slate, writing just before the recent retreat, cited the consideration of ethanol deregulation as one of the counts in an indictment about how Donald Trump may “hate Iowa.”
The underlying notion on which the left judges such matters is that fuels created near, at, or above the surface of the earth, “renewables,” are part of a sustainable policy, whereas fuels extracted from inside the earth are not.
This case has been complicated (at the least) by new research that indicates that ethanol may in fact cause more net emissions of carbon dioxide than unblended gasoline.
Right Wing View
Many of the President’s admirers would like him to break with Grassley on this issue, to support the ethanol dereg measures. One of them, a twitter denizen who calls himself “John (Deplorable)” connects this issue with that of health care. Trump has of late worked to undermine Obamacare by executive order ending the subsidies for insurance companies it entails.
John (Deplorable) contends that Trump should be consistent here, and “cut subsidies on corn for ethanol and soybeans as well. Farmers can buy insurance or do like the rest of us and prepare for bad times.”
Of course, libertarianism, and the libertarian element within U.S. conservatism, has long been opposed to ethanol subsidies, which it sees as an illicit government tilting of market outcomes. Senator Ted Cruz was speaking in this spirit in late 2015, early 2016, when he campaigned for support in the Iowa caucus while making clear his principled opposition to that subsidy.
The example of a politician refusing to pander may have helped him. He won that caucus.