Trump to increase ethanol use in petrol to appease farmers, shuns oil producers - Reuters
As reported by Reuters, US President Donald Trump is seeking to eradicate limits on gasoline fuels that contain large amounts of ethanol, in an effort to bid up US consumption of corn in a bid to win back some support from American agricultural sectors, who have found themselves in a lurch thanks to Trump's trade war with China, an odd position for farmers who largely supported Trump in the last election.
Key highlights
President Trump wants to strike out limits on E15 gasoline, a fuel source with up to 15% corn-based ethanol mixed in, a move that will likely see negative fallout from the oil industry, who stand to lose out on profits as ethanol reintroduction eats away at oil consumption.
In an effort to secure votes in the American farming belts, Trump is looking to drive up consumption of corn, though the move sees the president take a step away from US oil refineries, and anger at lifting the E15 ban could damage Trump in other areas of the upcoming midterm elections.
"The American Petroleum Institute, the largest U.S. oil trade association, opposes lifting the ban, saying E15 gasoline ruins older cars and potentially voids warranties. “The only certainty from today’s actions is a lawsuit,” Chet Thompson, head of American Fuel and Petrochemical Manufacturers, said on Tuesday. He said the industry would challenge the finalized rule in court, saying the EPA has acknowledged it lacks the authority to change this rule." - Reuters
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
