Takeaway

The Renewable Fuels Association (Troy Bredenkamp, Senior VP of Government Affairs) argues that waiver requests from Alabama and Louisiana to escape 2027 RFS blending obligations are economically incoherent — ethanol is currently the cheapest blendstock in the pool, and stripping it out would raise, not lower, gas prices. For traders, the near-term relevance is policy headline risk around ethanol/grain demand rather than any price catalyst: the presenter expects the EPA to deny the waivers, as it has every prior request, and flags a shrinking legislative window for year-round E15.

What the presenter said

• Alabama and Louisiana are seeking RFS waivers from 2027 blending obligations, claiming it would lower fuel costs [00:10].
• The RFA contends the waiver argument is misguided: waivers could drive gas prices higher, threaten grain demand, and weaken rural economies [00:20].
• States have requested RFS waivers roughly a dozen times before, typically citing high gas prices or insufficient renewable fuel supply — reasons the presenter says don't currently apply [00:30].
• "The wholesale price of ethanol is currently a dollar lower than the wholesale price of gasoline" [01:16].
• The presenter calls removing the obligation to blend the lowest-priced component in order to lower gas prices "absolutely asinine" [01:39].
• The RFA is preparing a legal case against the current waiver requests [01:53].
• Past waiver requests have consistently been denied by the EPA due to a high approval standard [02:15].
• Refiners are posting near-record profits this quarter, on par with last quarter; the presenter argues governors should take up fuel costs with refiners, not the RFS [02:29, 02:41].
• There is a bipartisan push for year-round E15, but Congress is running out of time to pass it [02:58].
• Confirming 25 Trump-appointed federal judges — a GOP priority — is estimated to consume ~200 hours of Senate floor time, squeezing out legislative bandwidth for E15 [03:07].

Trade ideas

• None stated. The presenter puts forward no actionable trade. The market view embedded in the discussion is supportive of ethanol demand into 2027 (waivers seen as likely to fail, ethanol cheapest in the blend pool), with the main swing factor being whether year-round E15 legislation clears Congress before the current session runs out of floor time.

Levels and data cited

• Ethanol (wholesale): "a dollar lower than" wholesale gasoline (relative level; no absolute prices given).
• Refiner profits: near-record profits this quarter and last quarter (per the speaker; no figures given).

Risks and what would invalidate this

• RFS waivers could drive gas prices higher (per the presenter, the opposite outcome is asserted by the requesting states — the dispute itself is the risk).
• RFS waivers could threaten grain demand.
• RFS waivers could weaken rural economies.
• Congress is running out of time to pass year-round E15 legislation.