The Wall Street Journal's editorial board is accusing the ethanol lobby of "extortion" after Congress handed it a sweetheart deal as "political compensation" for the damage caused by President Donald Trump's tariff blitz, and warning that American drivers will pay the price at the pump.
In a scathing editorial published Sunday, the board described how the corn fuel lobby threatened to hold the five-year farm bill hostage unless Congress agreed to permit year-round sale of E15 fuel, a blend of 15 percent ethanol and 85 percent gasoline, and severely restrict waivers from the ethanol mandate for small refiners.
"Consider it political compensation for the damage caused by President Trump's tariff blitz," the board wrote.
The deal came after Trump's tariffs devastated farmers who lost access to foreign markets, particularly China, pressuring Congress to hand out concessions to agricultural interests. The $390 billion farm bill also included $66 billion in subsidies stuffed into last year's tax bill to alleviate farmers' pain.
The Journal warned the ethanol deal would hurt consumers. Trump's EPA recently raised ethanol quotas, which the agency estimated would cost Americans $20 billion a year in compliance costs that would be "passed along to drivers at the pump," the WSJ said. The board also warned that year-round E15 sales could increase smog during warm weather.
The deal's biggest losers, the board warned, are small Midwest refiners who would lose EPA waivers under the new legislation.
"Socking small refiners—many of which are in the Midwest and Rust Belt—won’t relieve the tariff pain. It merely redistributes it to other businesses," the editors concluded.
Iowa Republican Sen. Chuck Grassley, one of the deal's most vocal champions, has dismissed objections from small refiners, noting year-round E15 sales have been granted by executive order under both the Biden and Trump administrations.
"I never heard from the small refineries," Grassley told reporters in February, suggesting the opposition may be newly motivated rather than rooted in financial hardship
