SAN DIEGO, Calif. (CNS Canada) — Building partnerships and growing markets was the theme of the National Ethanol Conference in San Diego, California, and members of the U.S. Renewable Fuels Association believe those goals align well with an increased focus on national security and America First protectionist policies under new U.S. President Donald Trump.
The head of the country’s largest industry group was optimistic for the future of the ethanol sector one month into Trump’s presidency.
While ethanol profits advanced year-over-year in 2016, prices for the commodity started to decline in the early weeks of 2017.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
A general weakening of demand for U.S. agricultural products was an early focus of the conference.
U.S. net farm income fell to a seven-year-low in 2016, while the aggregate value of crops hit the lowest point since 2010.
“There is a sense of unease spreading across rural America,” said Bob Dinneen, president and chief executive officer of the RFA and the industry’s lead lobbyist before the U.S. Congress and administration.
He said the industry is committed to strengthening and stabilizing farm income by providing demand.
“Of course, we’re doing this with a new president, new leadership.”
He believes the renewable fuel industry’s success depends on its ability to build partnerships with new allies and a coalition reflecting the country’s political reality.
Pointing out that ethanol can be “homegrown,” Dinneen followed up by aligning the U.S. ethanol industry with elements of Trump’s top-priority issues.
Trump campaigned on an America First attitude toward manufacturing and trade — something he’s kept since his election.
There is a sense of angst in the industry regarding the president’s evident disdain for multilateral trade pacts, especially because trade is crucial to agriculture and ethanol, Dinneen said.
However, he believes the president will support the interests of the industry.
“Trump’s a businessman, who most certainly appreciates the importance of trade,” Dinneen said. “Frankly, it’s going to be refreshing to have a leader who is willing to stand up for America in trade disputes.”
Scott Pruitt, who was recently appointed administrator of the Environmental Protection Agency, sued the EPA more than 10 times while attorney general of Oklahoma. During his time in that position, he fought the Renewable Fuel Standard, a program run by the EPA that dictates the amount of plant-based fuels to be blended into gasoline.
Trump also named Rick Perry, former governor of Texas, to be energy secretary, despite having previously said the Department of Energy should be shut down.
Dinneen said industry participants have been anxious about the appointment of Pruitt and Perry because those decisions may signal weakness in the president’s support for RFS.
“Their anxiety was relieved throughout the confirmation process when Mr. Pruitt repeatedly affirmed his commitment to uphold the law as Congress had written it,” Dinneen said.
“Trump, Pruitt and Perry understand that their perspective has changed and that they now represent the nation.”
Trump’s America First Energy Plan, released on inauguration day Jan. 20, made it clear the president intends to overhaul the regulatory codes to which the energy sector adheres.
“President Trump is committed to eliminating harmful and unnecessary policies such as the Climate Action Plan,” the online document on the White House website said.
“The president’s commitment to regulatory reform provides a perfect opportunity to finally bring fuel regulations into the 21st century,” Dinneen said.
However, the energy plan made no mention of ethanol or other biofuels.
“We are seeking to change that,” said Jeff Oestmann, president and CEO of East Kansas Agri-Energy.
Oestmann is also a member of the RFA board of directors and a veteran of the United States Marine Corps. He drafted a letter to Trump on behalf of U.S. military veterans who work in the ethanol industry.
The letter said thousands of veterans choose to work in the renewable fuels industry because they believe it contributes to national security, Oestmann said.
That’s directly in line with Trump’s America First Energy Plan, he said.
“Boosting domestic energy production is in America’s national security interest,” the plan said.
“President Trump is committed to achieving energy independence from the OPEC (Organization of the Petroleum Exporting Countries) cartel and any nations hostile to our interests.”
It also noted the president intends to work with allies in the Persian Gulf to develop a positive energy relationship as an anti-terrorism strategy.
“Personally, I would rather buy my oil, my fuel, from the Midwest than the Middle East,” said Oestmann.
Despite not mentioning renewable fuels in his energy plan, Trump stated his commitment to the industry in a letter read aloud by Dinneen. In the letter, Trump said that renewable fuels are important to America’s economy and energy independence.
He also called regulations on the industry “job-killing.”
Dinneen believe the Trump ad-ministration will stand up for American trade and ethanol.
In 2016, the renewable fuels industry exported 1.05 billion gallons to nearly 60 countries across the globe, which is the second-highest export volume on record, RFA data says.
The top markets for U.S. ethanol are Brazil, Canada and China, with the latter being the fastest growing export market by volume.
However, China’s implementation of tariffs has significantly slowed those imports, driving prices for ethanol lower, Dinneen said.
He added that the RFA, among other industry groups, have asked Trump to put China’s recent trade actions near the top of the administration’s China trade agenda.
Trump had campaigned on a promise to be tough on trade with China. In the coming months it will become clear where the line is between spurring demand and protectionism.
The RFA is fixated on growing demand, Dinneen said.
“But we have much more to do. We must expand existing markets, and open new markets for ethanol here, and abroad.”
