Biden to Announce Plan to Ease Gas Prices as Inflationary Pressures Persist

April 12, 2022

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by Jeff Stein and Evan Halper (Washington Post) The EPA plans to issue a national, emergency waiver to allow use of blended biofuels over the summer hours after report is expected to show inflation keeps surging -- The White House plans to roll out new policies Tuesday aimed at curbing gas prices as it braces for a crushing new report that will show inflationary pressures on millions of Americans have intensified this year.

President Biden will announce plans for the Environmental Protection Agency to allow a blended form of gasoline that uses ethanol, known as E15, to be sold this summer — a measure long resisted by some energy and environmental groups that could help deliver short-term relief at the pump.

The administration will do this by having the EPA issue an emergency waiver for the summer sale of E15. Typically, E15 cannot be sold in most of the country between June 1 and Sept. 15 because of air pollution rules. The White House has argued that the use of E15 can shave 10 cents off each gallon of gasoline. E15 is currently sold in 30 states at more than 2,300 gas stations, the Energy Department has said, but that is just a fraction of the more than 150,000 gas stations in the United States.

The news will come during a day the president is set to visit the Poet ethanol plant near Des Moines as the administration pushes Congress to approve new energy subsidies aimed at reducing U.S. dependence on foreign fossil fuels.

The flurry of activity around gas prices will come just hours after the federal government is scheduled to release an inflation report that could show prices rising by as much as 8 percent relative to last year, despite the Biden administration’s months-long efforts to bring inflation down. High prices have emerged as a nettlesome political problem for the White House, lowering Biden’s popularity even as the United States sees a boom in job growth and economic output. READ MORE

E15 all year long (Politico's Morning Energy)

Ethanol’s Effect on Fuel Volatility (Environmental and Energy Study Institute)

RFA Thanks President Biden for Taking Action to Allow Summertime Sales of Lower-Cost E15 (Renewable Fuels Association)

EPA Will Allow More Ethanol in Gas This Summer in Bid to Tame Prices: Existing rules ban gasoline made of 15% ethanol in summer to cut pollution from the more volatile mix (Wall Street Journal; includes VIDEO)

Ag Policy Blog: President to Re-Establish Year-Round E15 During Visit to an Iowa Ethanol Plant (DTN Progressive Farmer)

Biden waiving ethanol rule in bid to lower gasoline prices (Associated Press)

Biden to announce US EPA emergency waiver allowing summer E15 fuel sales (S&P Global)

Summer ethanol decision lifts corn prices (Farm Progress)

Ethanol industry hopeful as Biden heads to Iowa -- Biden will discuss the administration's attempts to lower gas prices. (E&E News)

Biofuels caucus pushing hard for year-round E15 in Congress (Iowa AgriBusiness Radio Network; includes AUDIO)

Food Fight Heats Up for Ethanol: Costly gasoline spurs calls to allow higher ethanol-blend of fuel year-round, even as corn prices rise (Wall Street Journal; includes VIDEO)

Biden will allow summertime sales of higher-ethanol gas as prices remain elevated. (New York Times)

Biden to suspend ban on higher-ethanol gasoline to lower prices (Washington Times)

Biden to announce summer sales of 15 percent ethanol fuel blend: Announcement is part of the administration's response to energy market shocks following Russia's invasion of Ukraine (Roll Call)

Using Homegrown Biofuels to Address Putin’s Price Hike at Pump and Lower Costs for American Families (The White House)

What to know about Poet, the world-leading ethanol producer President Joe Biden is visiting in Iowa (Des Moines Register; includes VIDEO)

Biden To Visit Menlo Ethanol Plant, Make E-15 Announcement (NortwestMoInfo)

Tue. 9:25 a.m.: Biden waiving ethanol rule in bid to lower gasoline prices (Tribune Chronicle)

Axne says Biden showing that biofuels are part of U.S. energy mix (Radio Iowa)

GAZPOLITIK: President Joe Biden’s latest moves to temper high gasoline prices have environmentalists facing a dilemma: (Politico's Morning Energy)

GOOD NEWS AHEAD: The summer-time E15 measures could be well timed for lower gasoline costs this holiday driving season (Politico's Morning Energy)

MIXED EMOTIONS AMONG AG LAWMAKERS: (Politico's Morning Energy)

SfL Commends President Biden for Opening Up E15 Sales (Solutions from the Land)

MOMENTUM FOR E15 WAIVER PICKED UP STEAM WITHIN PAST 2 WEEKS (Brownfield Ag News)

Biden’s Ethanol Move Boosts Producers, Worries Meat Companies: Corn farmers and ethanol makers look for a bump in demand from summertime E15 gasoline sales; chicken producers fear higher grain costs (Wall Street Journal; includes VIDEO)

Biden to Allow Summertime E15 Sales (Southeast Ag Netw0rk)

Fuel Retail Industry Commends Year-Round E15 Sales (NATSO)

How Ethanol and E15 Gas Fit Into Biden’s Plans to Fight Inflation (Washington Post/Bloomberg)

Ethanol Supporters Thank Biden for E15 Waiver (Energy.AgWired.com)

Turning food into fuel won’t solve Bidenflation (Washington Examiner)

Ethanol Report 4-14-22 -- President Biden Announces Emergency Waiver for E15 (Energy.AgWired.com; includes AUDIO)

Excerpt from Politico's Morning Energy: It’s a huge win for agriculture states and ethanol backers but could garner pushback from environmentalists who fear greenhouse gas emissions linked to ethanol production and from refiners who question the legality of extending E15 sales.

The move will require EPA to issue a national emergency waiver to lift current restrictions, which are in place to protect air quality in the summer months from June 1 to Sept. 15. The administration is also considering additional action that could lead to year-round E15 use, including coordination with state governments. EPA will also work with states to make sure any moves don’t have severe adverse impact on air quality, which an administration official told reporters was largely an issue in "very large urban centers, often on the coasts."

The administration is eager for solutions that could grant gas price relief as the midterms approach and consumer confidence in the economy descends. And despite the Biden administration’s adamant messaging that Russian President Vladimir Putin is to blame for the high gasoline prices, shifting blame doesn’t alter the reality that motorists are hurting. The U.S. has also coordinated releases of national crude stockpiles to help cool prices. The national average gasoline price was $4.114 on Monday, according to AAA.

Biden is making the announcement in Menlo, Iowa, during his first trip to the state since 2020 when he was a candidate. Rep. Cindy Axne (D-Iowa), one of the lawmakers pressing Biden to lift the summer ethanol restrictions, is planning to greet the president at the Des Moines airport tomorrow and attend his remarks.

POLITICO’s Kelsey Tamborrino and Ben Lefebvre have more. READ MORE

Excerpt from DTN Progressive Farmer: Emily Skor, CEO of Growth Energy, a lobbying group founded by POET CEO Jeff Broin, said, "This 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," Skor added.

Skor also said she hoped the move would lead the Biden administration and Congress "to deliver a permanent fix to restore year-round access to E15 in the years ahead."

...

The White House added EPA is considering other actions to further spur the use of E15 year-round, including continued talks with states that have already sent requests to EPA about year-round E15. READ MORE

Excerpt from Environmental and Energy Study Institute: While neat (pure) ethanol has a lower vapor pressure than gasoline, the interaction of small amounts of ethanol in gasoline causes the ethanol to more readily vaporize. Therefore, mixing small amounts of ethanol and gasoline causes the RVP of gasoline to increase. As the ethanol content in gasoline increases, however, the RVP of the finished gasoline decreases. The addition of 10 percent ethanol (E10) to gasoline raises RVP by approximately 1 pound per square inch (psi). However, at 15 percent ethanol, the National Renewable Energy Laboratory has found that the RVP is nearly the same as that of 10 percent ethanol. And, when increasing ethanol content beyond 15 percent, vapor pressure begins to decrease. A 50 percent blend (E50) has a lower RVP rating than gasoline.

The one-pound waiver does not extend to blends above E10, despite E15 and higher blends having either the same, or lower RVP ratings than E10. At the time the one-pound waiver was granted, blends higher than E10, such as E15 or E30, were not commercially available. High-ethanol blends, such as E85, do not require a RVP waiver, since their RVP rating is below that of gasoline. READ MORE

Excerpt from Farm Progress: Typically, only a 10% blended product is available during that time as further ethanol blending was previously capped due to smog concerns. Academic research has since suggested that higher blends of ethanol additives in fuel do not significantly increase smog output.

The energy industry is likely to bristle at this decision, especially since corn prices have been increasing alongside the energy surge. But voters are bristling even more at the prospect of higher fuel costs this summer, especially as travel plans increase following peak-pandemic isolation over the past two years.

For now, corn growers are likely to be the key beneficiary of the Biden EPA’s shift in policy. Fuel prices are likely to remain high amid the Black Sea conflict, but the addition of cheaper ethanol additives could help calm consumer dissent about strong fuel prices through the peak summer travel months. READ MORE

Excerpt from S&P Global: The White House said it would work with states to ensure the expanded E15 access has no significant air quality impacts this summer.

EPA is considering additional action to spur E15 use, including continued talks with states that have expressed interest in year-round access and modifications to E15 fuel pump labeling, the White House said.

EPA is also set to propose April 12 a new approval for canola oil that will add new pathways for fuels to participate in the Renewable Fuel Standard as feedstock for renewable diesel, jet fuel and other biofuels. READ MORE

Excerpt from The White House: The Administration has announced the following key steps:

$700 Million for Biofuels Producers: As part of the Pandemic Assistance for Producers initiative, USDA will provide up to $700 million in funding through a new Biofuel Producer Program. The Program will support agricultural producers that rely on biofuels producers as a market for their agricultural products. By making payments to producers of biofuels, the funding will help maintain a viable and significant market for such agricultural products. Producers can expect awards before the end of April.

$5.6 million for Infrastructure for Renewable Fuels through the Higher Blends Infrastructure Incentive Program: To expand the infrastructure for renewable fuels derived from U.S. agricultural products, USDA is announcing $5.6 million in grants through the Higher Blends Infrastructure Incentive Program. The purpose of the program is to significantly increase the sales and use of higher blends of ethanol and biodiesel. The awards being announced today will support 9 projects in 7 states.

$100 Million for Biofuels Infrastructure: Investing in biofuels infrastructure ensures that market opportunities are available for sustainable fuel sources—and that those sustainable fuels can reach consumers. That is why USDA announced $100 million in new funding for grants for biofuels infrastructure. The funding will provide grants to refueling and distribution facilities for the cost of installation, retrofitting or otherwise upgrading of infrastructure required at a location to ensure the environmentally safe availability of fuel containing ethanol blends of E15 and greater or fuel containing biodiesel blends B-20 and greater. USDA will also make funding available to support biofuels for railways as a means of assisting with supply chains and helping to reduce costs for consumer goods and transportation.

Spurring a New Market in Sustainable Aviation Fuels: The Administration announced new actions to support sustainable aviation with a focus on low-carbon fuels that will create economic opportunity for agricultural communities. This included:
- A new Sustainable Aviation Fuel Grand Challenge to inspire the dramatic increase in the production of sustainable aviation fuels to at least 3 billion gallons per year by 2030;
- New and ongoing funding opportunities to support sustainable aviation fuel projects and fuel producers totaling up to $4.3 billion; and
- An increase in R&D activities to demonstrate new technologies that can achieve at least a 30% improvement in aircraft fuel efficiency.

Expanding Use of Canola Oil: Today, EPA is also announcing efforts to expand supply and choices for other forms of fuel, such as diesel and jet fuel. The Agency is proposing a new approval for canola oil that will add new pathways for fuels to participate in the Renewable Fuel Standard program to provide renewable diesel, jet fuel and other fuels. This action demonstrates EPA’s commitment to approving new petitions for renewable fuels that can provide greenhouse gas benefits as well as reduce reliance on petroleum fuels.

These actions are critical to building real energy independence and protecting Americans from volatile prices by reducing our reliance on fossil fuels. Together, they will create good-paying jobs, support American agriculture and manufacturing, and accelerate the transition to clean energy. READ MORE

Excerpt from Tribune Chronicle: “Homegrown Iowa biofuels provide a quick and clean solution for lowering prices at the pump and bolstering production would help us become energy independent once again,” said Iowa Republican Sen. Chuck Grassley. He was among nine Republican and seven Democratic senators from Midwestern states who sent Biden a letter last month urging him to allow year-round E15 sales. READ MORE

Excerpt from Politico's Morning Energy: MIXED EMOTIONS AMONG AG LAWMAKERS: The E15 announcement was a major win for farm-state lawmakers who have long demanded more biofuels in the country’s energy mix. But it wasn’t enough to stave off criticisms from some of those same members, with Republicans continuing to blame the administration for high gas prices in the first place.

Farm-state lawmakers have long been pushing for more opportunities to use biofuels as a transition to cleaner transportation and energy. Sen. Tammy Duckworth (D-Ill.) heralded the move as a cost-saver for consumers while driving job growth in the Midwest, saying in a statement she hoped to make the temporary waiver permanent.

Republicans were less effusive, striking more of an it's-about-damn-time tone.

"I’m glad President Biden is finally listening to what Senator [Joni] Ernst and I have been saying for months,” Sen. Chuck Grassley said. “Unlike tapping into the Strategic Petroleum Reserve and begging OPEC for more dirty oil, this is a step toward energy independence, lower gas prices and cleaner air."

House Energy and Commerce ranking member Cathy McMorris Rodgers said in a statement that "While biofuels are an important part of our fuel mix, let's be clear-eyed about what this announcement is. It’s another temporary attempt that distracts from the energy, inflation, and supply chain crises this administration’s policies helped create.”

INDUSTRY RESPONSE: Meanwhile, the Fueling American Jobs Coalition, which represents refinery workers, questioned the legality of waiving E15 limits, citing an attempt to do so under the Trump administration that was overturned in court. FAJC disputed the move would actually help bring down costs unless there was a major overhaul on the Renewable Fuel Standard, saying the tradable credits under the RFS were driving up prices by overburdening refineries.

“The most effective way to lower the price of gasoline at the pump would be to lower the ethanol volume mandate for 2022, which is currently proposed at an unachievable level that keeps RIN prices – and consumer fuel costs – at historic levels,” the group said in a statement Tuesday.

Advocates acknowledged a permanent solution to enshrine year-round E15 would likely involve congressional action, where the prospects are murky and would likely require concessions on a broader fuels policy reform to get oil backers on board. Rep. Angie Craig (D-Minn.) and Adrian Smith (R-Neb.) introduced legislation last year to grant waivers allowing the sale of higher blend fuels year-round after the D.C. Circuit decision vacating the Trump-era rule.

“This gets us to the summer, but now we've got 12 months, and we've got to make this a permanent fix,” Growth Energy CEO Emily Skor, who was in Iowa for the announcement, told reporters. READ MORE