EVANSVILLE, Ind., Oct. 10 (UPI) -- While farmers celebrate President Donald Trump's plan to increase ethanol sales, economists warn the impact of the policy change will take many years to materialize.
At a rally in Iowa Tuesday, Trump said he would direct the Environmental Protection Agency to allow year-round use of gasoline blended with 15 percent ethanol -- a biofuel made from corn -- known as E15. Current EPA regulations only allow E15 to be sold during winter months to minimize smog-producing evaporative emissions. The restrictions mean few service stations sell E15, instead opting for blends with less ethanol that can be sold year-round.
Trump's announcement was hailed a victory for farmers who have seen corn and soy prices plummet due partly to the administration's trade disputes with China, Mexico and Canada.
"This will create more demand for corn," said farmer Curt Mether, president of the Iowa Corn Growers Association. "We're just taking a victory lap over it. The agricultural economy is kind of rough right now, so we're just going to try and enjoy this."
But economists say the new policy will create little immediate change.
"I call it the E15 dream," said Wallace Tyner, an agricultural economist at Purdue University. "The industry thinks that magically all these pumps selling E15 are going to appear, and all these consumers are going to flock to them. I just don't think that's going to happen."
Trump's mandate does not automatically change EPA regulations, but it instructs the agency to review its E15 policy -- a process that will take months, Wallace said. While it's likely the agency will follow the president's recommendation, approving year-round sales is only the first hurdle the ethanol industry faces in getting E15 to drivers.
E15 blended fuel is approved for all cars built after 2001, according to Iowa Corn, but car companies only warranty their cars for fuel with 10 percent ethanol, Wallace said.
"Why would a service station owner add pumps for another grade of fuel and risk problems with auto manufacturers?" Wallace said. "As a filling station owner, you just can't risk it."
Another concern -- it's possible a future administration will reverse Trump's change.
"Ethanol is very volatile," Wallace said. "E15 produces more evaporative emissions during the hotter summer months."
A complete shift to E15 blends would create noticeably more smog, especially in cities, during the summer, he said.
"That's why the EPA only approved E15 for use during the winter months."
Industry groups counter that ethanol produces fewer carbon emissions than fossil fuels, making it a cleaner option overall, said T.J. Page, market development manager at Iowa Corn.
"In the short term, we're not going to see any major changes," Page said. "But in the next few years, we should start to see more E15 offered at the pumps. We live in an E10 world now. This signals to us that we're moving into an E15 world."