Obama Administration Sets Record Amount of Ethanol for 2017

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Under quotas the U.S. Environmental Protection Agency, refiners must mix 19.28 billion gallons of renewable fuel into the U.S. gasoline and diesel supply next year, including up to 15 billion gallons of traditional, corn-based ethanol The EPA is forcing refiners to use a record amount of biofuel next year, delivering a victory to Midwest farmers at the expense of oil companies that say they are struggling with the program’s costs. For the first time, the targets match a 15 billion-gallon ceiling that Congress established for conventional renewable fuels in creating a program to boost their use 11 years ago. The 2017 quotas are certain to increase pressure on Congress and President-elect Donald Trump to overhaul the Renewable Fuel Standard. While Trump is unlikely to rescind the new targets now that they have been finalized, he may support efforts to overhaul it by Congress. President-elect Trump had varying positions of the program. In Iowa, he said the U.S. should increase biofuel mandates. But in September, his campaign issued a fact sheet calling for the elimination of the system for buying and selling biofuel blending credits, following criticism from billionaire investor Carl Icahn. His campaign later reissued the fact sheet without the language opposing the system. The EPA’s decision is good news for biofuel supporters who had argued that climbing gasoline demand justified hitting that 15 billion cap. Americans are on track to consume a record 144 billion gallons of gasoline this year, according to an October forecast from the U.S. Energy Information Administration. Oil companies blasted the move, arguing that the 2017 quotas push them beyond a “blend wall” where they are forced to mix a higher amount of ethanol into fuel than the 10 percent level approved for use in all cars and trucks. Oil companies and industry trade groups had unsuccessfully lobbied the administration to keep total ethanol levels at 9.7 percent of gasoline demand — an amount that would provide a buffer below the conventional 10 percent blend while also accommodating sales of ethanol-free gasoline coveted by boaters.