An Otherwise Unpublished Wall Street Journal Op-ed on Renewable Fuels

September 6, 2025/Hoekstra Trading LLC/Comments Off

This Editorial from yesterday’s Wall Street Journal is titled :

The Wrong Way to Help Farmers – To ease tariff pain in the Farm Belt, Trump is doubling down on the ethanol mandate that will raise fuel costs for everyone else.

It is a confusing editorial about a confusing topic.

Let’s dissect its 3-part subtitle:

To ease tariff pain in the Farm Belt . . .
Trump is doubling down on the ethanol mandate . . .
that will raise fuel costs for everyone else.

I begin the dissection with the second clause:

Trump is doubling down on the ethanol mandate

There is no ethanol mandate. There Is a Total Renewables Mandate and an Advanced Renewables Mandate. What is sometimes called the “ethanol mandate” is the difference, or “gap” between the two. The basic equation is: Total Renewables Mandate = Advanced Renewables Mandate + The Gap

The Advanced Renewables Mandate — pertains to certain renewable fuels, most of which cost more than the petroleum fuels they replace and therefore require a subsidy to be price competitive. For example, diesel fuel made from soybean oil is an advanced renewable fuel that costs nearly triple the cost of diesel fuel made from petroleum. It is heavily subsidized. No trucker would buy a drop of renewable diesel fuel without it being heavily subsidized. The same is true for renewable diesel fuel made from wood chips and renewable natural gas made from cow manure.

The Gap — between Total Renewable Fuel and Advanced Renewable Fuel can be filled by any renewable fuel, but is always filled by ethanol. That’s because ethanol (the renewable fuel that is blended into U.S. gasoline) is by far the most economical of any renewable fuel. In fact, ethanol costs even less than pure petroleum gasoline¹. Contrary to the suggestion in the editorial, ethanol neither requires nor gets any federal subsidies. Ethanol is in our gasoline because it earns its way in on economic grounds in direct competition with petroleum gasoline.

Next, the 3rd clause:

that will raise fuel costs for everyone else

This clause is partly true, but still confusing. The use of Advanced Renewable Fuels (like renewable diesel) raises fuel costs. But the use of ethanol in gasoline reduces fuel costs. The total cost of fuels is higher to the extent the higher cost of advanced renewable fuels exceeds the lower cost of ethanol.

And finally, the first clause:

To ease tariff pain in the Farm Belt

It may be true that some in the Farm Belt feel pain because of the tariff plan announced on July 31, 2025. But to claim this pain is the reason for “doubling down on the ethanol mandate” is a huge stretch. First, there is no ethanol mandate to double down on. Second, anyone with serious interest in renewable fuels knows that many other factors lie behind the renewable fuel mandate levels that were proposed by EPA on June 25, 2025.

Are the authors themselves confused on these basic points? Evidently, they are.

Footnote: ¹ OBJECTION! Ethanol may cost less than gasoline, but it also has less energy per gallon than gasoline which makes it less economical. OBJECTION OVERRULED. It is true that ethanol has less energy per gallon than petroleum gasoline, but ethanol is still less costly than the petroleum gasoline it replaces, even on an energy-equivalent basis.