Did Trump’s renewable fuels policy really cost corn growers $3.65 billion in 2017?

In Washington, new evidence has appeared that a Trump Administration shift on US low carbon fuel policy may have cost US corn growers an estimated $3.65 billion. The mechanism? A secretive effort by Administration officials installed at the US Environmental Protection Agency that destroyed an estimated 1.37 billion gallons of annual demand for low-carbon renewable fuels, in favor of fossil fuels. Officials at the agency exploited a loophole in US low carbon fuel legislation that allows small oil refineries to gain hardship waivers in cases of severe distress from complying in full with US low carbon fuel laws.  Now, evidence on the scale and nature of hardship waivers has appeared in response to Freedom of Information Act and Congressional requests.  The EPA has now acknowledged that the number of hardship waivers granted in 2017 by the Trump Administration is nine times the average annual level granted from 2013 to 2015.Based on EPA’s admissions, the Renewable Fuels Association estimates that “small refiner exemptions have resulted in effectively lowering the 2017 required volume of renewable fuels by 1.37 billion gallons, or 7%. The data also show that small refiner exemptions also effectively reduced the 2016 RFS requirement by 523 million gallons.”The losers? Corn growers, it appears. In 2013 the Center for Agricultural and Rural Development at Iowa State University published a study which looked at the impact on corn prices from a 1.4 billion gallon decrease in ethanol demand. The Center found that the impact was 25 cents per bushel. Applying that figure to the 14.6 billion bushel 2017 corn crop leads to the lost profits figure of $3.65 billion.