Big Corn vs. Big Oil: Zero-Sum Game

By: Daniel Guttman / October 10, 2018

E15 Blog


On Tuesday, President Donald Trump held a rally in Council Bluffs, IA  supporting Iowa Republican candidates and promote his administration policies supporting ethanol production. Iowa, being central to what we often refer to as the “Big Corn” industry was pleased to hear what he had to announce. “We’re heading to Iowa where we have a big statement to make on ethanol for our farmers,” Trump said. “We want to get more fuel into the system…a promise I made during my campaign, and you know I keep my promises.”

Two major bullet points came from  the announcement: Trump will direct the EPA to allow year-round use of gasoline blended with 15% ethanol, or E15 as well as directing them to pursue changes as a way to end manipulation and bolster transparency in the Renewable Identification Number (RIN) market.

The announcement comes after roughly 18 months of relatively damaging policies to the agricultural industry. These include the increased amount of waivers granted to oil refiners, reducing their obligations to buy and blend corn into their fuel mixes; reducing demand and plunging the RINs market to a 5-year low, down from over $1.00 last year to only $0.12 today. The industry also felt a hit from the recent “trade wars” as China retaliated with tariffs on American soy, corn, wheat, cotton, rice, beef, pork, poultry, fish and dairy products. Soybean prices have declined more than 20% and corn prices are down 10% this year.

The combination of the two policy announcements on Tuesday is the attempt to appease both “Big Corn” and “Big Oil” in a battle that is often viewed as a zero-sum game and a difficult balancing act at best. This delivers on his campaign promise to support ethanol while also addressing some independent refiners concerns about the high cost of fulfilling the U.S. Mandates compelling them to use corn-based fuel additive.

The announcement was unsurprisingly, well received in the Farm Belt area, but oil refiners are not happy and have already promised to challenge it in court. The battle between corn and oil clearly is not over.

Categories: RIN, Ethanol, big corn, big oil, E15, Trump

Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.

Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.


Contact Us