In welcome news for corn growers, the White House announced April 12 that the Environmental Protection Agency will allow gasoline blended with 15% ethanol—known as E15—to be used during the summer months to lower fuel costs for consumers. The E15 blend has been banned during summer months for a decade under the Clean Air Act.
The action requires an emergency waiver to be issued by EPA. In the absence of the actions announced by President Joe Biden, most fuel retailers would have been forced to stop selling lower-cost E15 to their customers on June 1 because of an oil industry lawsuit. EPA said it plans to take final action to issue the emergency waiver closer to June 1 and extend it through Sept. 15. The E15 blend is currently offered at 2,300 gas stations in the country.
The announcement was cheered by the Renewable Fuels Association, the advocacy group for the ethanol industry, which said E15 is “the lowest-cost and cleanest fuel available in the marketplace today.”
Biden visited the POET Bioprocessing facility in Menlo, Iowa, to formally announce the plan, along with other actions meant to stimulate increased domestic production and use of low-carbon renewable fuels. Headquartered in Sioux Falls, South Dakota, POET operates 33 bioprocessing facilities across eight states. The Menlo facility, which the company calls “state of the art,” can produce up to 150 million gallons a year.
RFA President and CEO Geoff Cooper and other ethanol industry leaders were on hand to participate in the event. “We applaud President Biden and his administration for recognizing that low-cost, low-carbon ethanol should be given a fair opportunity to strengthen our energy security and reduce record-high pump prices,” Cooper said. “Giving fuel retailers the freedom to offer E15 this summer will not only result in lower fuel prices for hardworking Americans, but it will also cut greenhouse gas emissions and reduce tailpipe pollution linked to cancer, heart disease, respiratory illnesses, and other health concerns. As our nation copes with energy price inflation and strives to enhance energy security and diversity, we salute President Biden for turning to America’s farmers and biofuel producers for ingenuity and solutions.”
Growth Energy CEO Emily Skor said in a statement the news is good for drivers who are facing much higher prices at the pump this year.
“This (is) welcome news for all American drivers seeking lower cost options at the pump. Lifting outdated and unnecessary summertime restrictions on E15 will ensure continued access to a fuel that has been saving drivers as much as 50 to 60 cents a gallon in recent weeks, offering working families relief at the pump at a time when they need it most.
“Not only is this decision a major win for American drivers and our nation’s energy security, it means cleaner options at the pump and a stronger rural economy. American biofuels like ethanol reduce greenhouse gas emissions by 46% compared to regular gasoline and are key to achieving the nation’s climate goals.”
Mixed reactions
It is not clear whether or how the move will affect prices at the pump. In recent months, according to the RFA, E15 has typically sold for 15 to 25 cents per gallon less than standard gasoline with 10 percent ethanol (E10), and 60 to 80 cents per gallon less than gasoline with no ethanol added (E0).
James Mintert, director of the Center for Commercial Agriculture at Purdue University where he is a professor and extension economist in the Department of Agricultural Economics, said of the move, “It’s positive for ethanol usage, but I don’t think it will provide a large boost to ethanol usage, in part because of the limited number of outlets where it’s available.”
Frank Macchiarola, the American Petroleum Institute’s senior vice president of policy, economics and regulatory affairs, said the ethanol move was a short-term fix that could raise prices, according to the Wall Street Journal. President Joe Biden is also releasing 1 million barrels of oil a day from the nation’s oil reserves, but critics say that’s not enough to move pump prices significantly.
Biden has been polling badly on the issues of inflation and rising fuel prices, with a March survey by ABC News and Ipsos finding that two-thirds of Americans fault Biden’s handling of those two issues. Russia’s invasion of Ukraine has sent prices of many commodities including oil and gas soaring, but inflation was well underway before the invasion.
Sen. Chuck Grassley, R-IA, said in a press release the president’s stop in Menlo, Iowa, is important to farmers and can help diversify the fuel industry. “I know Iowa biofuel producers can ramp up production and provide affordable, low-carbon biofuels to the country if the president allows summer sales of E15.”
U.S. Rep. Cindy Axne, an Iowa Democrat, said in a news release that families in her state have faced the impact of rising gas prices each time they fill up, which is why she has asked Biden to make E15 available year-round. This will not only help alleviate America’s pain at the pump, but it will also maximize carbon reductions from biofuels and create more opportunities in rural Iowa.
Grassley is a member of the Senate Agriculture Committee and Axne is a member of the House Agriculture Committee.
Sen. Roger Marshall, R-KS, a member of the Senate Agriculture Committee, said, “As a long-time advocate of year-round E-15, today’s announcement is certainly welcome news and will be beneficial for farmers, ethanol producers and rural communities throughout Kansas this summer. However, this is nothing more than another Band-Aid trying to cover up the crisis of record high gas prices that the Biden Administration’s policies have created. Instead of another temporary fix, Joe Biden needs to take concrete steps to unleash more American energy to keep gas prices down, including allowing for the sale of year-round E-15 into the future."
Dave Bergmeier contributed to this story. David Murray can be reached at [email protected].
