According to Bloomberg News, only 1,430 out of 122,000 retail fuel stations nationwide sold E-15. E-15 cannot be sold through the black nozzles to non-flex fuel vehicles from June 1st to September 15th without the vapor waiver that E-10 has from EPA. It will be difficult to expand sales of ethanol through E-15 unless retail fuel stations can sell it year-around. The petroleum industry knows that and has been using its considerable influence within the Trump administration and EPA to see to it that the E-15 vapor waiver has been idling in bureaucratic purgatory.

Trump announced on May 8th in the Oval Office that he was going to approve E-15. They have continued to announce that it will happen ‘soon’. The roadblock was that he wants something from the ethanol industry to give to refiners first before he keeps that promise. You have to listen closely to comments about E-15 from the likes of Ag Secretary Sonny Perdue to get the nuances of the ‘deal’ that they are demanding.

The White House has told USDA to talk to the corn growers and ethanol people and find out something they are willing to concede to retailers to get the E-15 vapor waiver. The corn growers and ethanol industry already believed that they had 2.25 bln gallons of RIN waivers stolen from the RFS by Trump and the idea of conceding something else was absolutely absurd and insulting. Trump wants to be able to announce the E-15 vapor waiver before the mid-term election and stand up and brag to farmers how he followed through on his promise. Like so many things with what he promises you, it is not a full rendition of what you actually get. They will remain quiet about what was conceded to get it.

Those 2.25 bln gallons of RIN waivers, given to petroleum refiners so that they do not have to blend ethanol, should have been good for ten E-15 waivers but he still wants something more. Trump has been good at setting fires and then coming in acting like the fireman wanting all the credit for putting it out. 2.25 bln gallons of RIN waivers granted to refiners was one heck of a 5-alarm fire and it would take more than the E-15 vapor waiver to put it out.

The lack of need by refiners to blend ethanol to comply with the RFS despite the market incentive to do so is showing up in the weak ethanol fuel market. Unleaded gas has gone up while ethanol has not with the spot spread widening to 80 cents gallon. The market is screaming for refiners to blend ethanol but with RIN waivers they don’t have to, as it is not their product. Trump RFS policy did this. The market is telling them to blend ethanol. So, if that is not happening one must ask why?

A Coke distributer is not going to sell Pepsi if he can avoid it. The petroleum industry, as I have previously alluded, will resist selling ethanol if it cost a nickel a gallon. It is not their product. That was the purpose of the RFS. It was to guard market access for 15 bln gallons of corn ethanol demand. The Trump administration is undermining the RFS with RIN waivers and has refused to approve the E-15 vapor waivers, which would open more access to consumers, demanding more concessions for refiners first. That is the reality.

FAPRI says it will reduce the effective RFS 15 bln gallon volumetric support to 13.7 bln gallons. Given cheap corn and relatively high-priced fuel at the pump, ethanol plants should have been rocking, making money, but they are instead “idling” plants because of poor margins. They are still promising that the E-15 vapor waiver is coming in spite of having delayed the process enough to miss last summer’s market. The tariffs have stifled ethanol and DDG exports. I know that Trump promised that he was pro-ethanol but this is as anti-ethanol as it can get.

Trump says that he wants middle ground between farmers and refiners so he can call it a win-win but the reality is that it is the dang-dest screw job for the ethanol industry and corn farmers that I have ever seen called a win. A lot of farmers do not know enough about the RFS to know what he has done to them and the Corn Growers and ethanol industries who do know are afraid their Trump supporting constituencies will believe Trump and not them, so are protesting quietly. They are fearful of offending anyone, particularly Trump.

The EPA launched a website that tracks RIN prices making the process more transparent. That would be good for all but doesn’t change the score. Senator Grassley summed it up saying “We ain’t going to be played for a sucker…and that is what they are trying to do.”

I agree that that is what they are trying to do but I am not confident at all that they will not win because they are winning. They kicked our butts with the RIN waivers, confirmed by the FAPRI analysis of the loss of corn demand, then dangle out a promise of the E-15 vapor waiver contingent on the demand that we offer up something else in tribute before getting Trump’s final blessing on E-15. Even Grassley and Ernst stop right at the line where they actually criticize Trump by name. They blast his policies while participating in the illusion that Trump is not responsible for them.

I have not heard my Congressman, Steve King, support ethanol either but then again, he was the anti-ethanol Ted Cruz supporter. He is lucky to be living in an ethanol district where they do not care that their Congressman has no concept of constituent service.

I, frankly, was not so surprised that Trump was doing this. What shocked me was how so many in the ag sector are giving him political cover while he is doing it. If the victim doesn’t protest, it is hard then to claim rape.

David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.