California Can Reduce Gasoline Prices by Adopting E-15 Ethanol Blend

September 24, 2024

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(Aemetis) Aemetis, Inc. (Nasdaq: AMTX), a California renewable fuels producer, today called for the California Air Resources Board (CARB) to immediately implement a 15% ethanol blend in gasoline to reduce gas prices for California consumers and reduce greenhouse gas emissions (GHG) from motor vehicles. California stands alone among the 50 states in not adopting a 15% blend of fuel ethanol. The US EPA approved E-15 for use in light duty vehicles in 2011, and 49 other states have adopted a 15% ethanol blend. California still mandates a 90% petroleum blend in every gallon of gasoline.

In response to Governor Newsom calling a special session of the state legislature, the State Assembly is currently holding hearings regarding the need for lower fuel prices in California. An obvious solution is to allow consumers to purchase lower cost, cleaner burning, domestically produced renewable fuel instead of mandating higher cost, polluting imported petroleum fuel.

A recent study by UC Berkeley and US Naval Academy economists found that allowing an E-15 blend could save California drivers $2.7 billion at the pump annually, which translates into approximately $0.20 per gallon every time a motorist fuels their car.

A typical California household would save about $200 per year on gasoline expenses, and for many lower income residents of the Golden State, that money could be spent on items like childcare, groceries, or prescription medications.

Moving to an E-15 blend would have an immediate impact on California’s environment as ethanol is derived from renewable sources and emits 46% fewer air pollutants than gasoline. According to the Environmental and Energy Study Institute, the US transportation sector accounts for 27 percent of US greenhouse gas emissions. Increasing California’s ethanol blend would reduce emissions and likely reduce gasoline usage in the state, while providing an immediate and measurable benefit to the state’s ambitious goal of reaching net carbon neutrality by the year 2045.

A study commissioned by CARB found that adopting E-15 in the state could cut emissions of tailpipe pollutants such as particulate matter and carbon monoxide, which cause air quality and human health problems.

“As the transition to EV’s and other zero tailpipe emission vehicles take place over the next decade, California should adopt every tool available – today – to expedite the reduction of harmful fossil fuel emissions,” said Eric McAfee, Chairman and CEO of Aemetis, Inc. “The most immediate cost-saving and environmentally beneficial step the state can take is the implementation of E-15,” added McAfee.

The adoption of E15 supports the broader goals outlined in California’s climate action plans, which include reducing dependence on fossil fuels, decreasing air pollution, and promoting the use of renewable energy. By transitioning to E15, California can make substantial progress in achieving these goals.

The steps required to allow an E-15 blend in California have been conducted, including source testing and on-road testing. Billions of miles have been driven on E-15 across the United States since 2011. CARB can adopt new rules that will allow E-15 to be sold in California as soon as 2025.

“We applaud Governor Newsom’s focus on the chronic problem of high gas prices in California, and we urge the state legislature’s special session to call on CARB to implement E-15,” said McAfee.

About Aemetis

Headquartered in Cupertino, California, Aemetis is a renewable natural gas, renewable fuel and biochemicals company focused on the operation, acquisition, development and commercialization of innovative technologies that replace petroleum-based products and reduce greenhouse gas emissions. Founded in 2006, Aemetis is operating and actively expanding a California biogas digester network and pipeline system to convert dairy waste gas into Renewable Natural Gas. Aemetis owns and operates a 65 million gallon per year ethanol production facility in California’s Central Valley near Modesto that supplies about 80 dairies with animal feed. Aemetis owns and operates a 60 million gallon per year production facility on the East Coast of India producing high quality distilled biodiesel and refined glycerin for customers in India and Europe. Aemetis is developing the sustainable aviation fuel (SAF) and renewable diesel fuel biorefinery in California to utilize renewable hydrogen, hydroelectric power, and renewable oils to produce low carbon intensity renewable jet and diesel fuel. For additional information about Aemetis, please visit www.aemetis.com. READ MORE

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Excerpt from Politico Pro: It will also consider a new bill from Assemblymember Cottie Petrie-Norris, chair of the special-session Petroleum Gasoline and Supply Committee, that would require the California Air Resources Board to complete its review of whether drivers should be allowed to use gasoline that has a higher percentage of ethanol by the end of 2025. She introduced that bill Tuesday as ABX2-9.

“We must explore all options, including looking at gasoline blends that could reduce prices and emissions,” Petrie-Norris said in a statement. READ MORE

Excerpt from Los Angeles Times: To the editor: Our legislators will soon be asked by the California Air Resources Board to consider new limits on the amount of carbon in gasoline. To do that, naturally, they asked CARB whether its earlier estimate that this could increase the price of gas by about 47 cents a gallon was still accurate. (“As Newsom urges refinery controls, California regulators consider hike in gas prices,” Oct. 10)

This is particularly important, since other analysts have said the cost increase per gallon of gas could be considerably higher.

CARB’s head Steven Cliff replied that the board is not equipped to analyze the effect of this change on retail gasoline prices. Instead, he said, it could look only at the economic impacts, including growth, job creation and public health — and on that basis, the board determined that the change is a net positive for Californians.

Can someone please tell me how it is possible to quantify the net economic benefits of a rule change when one of the most important variables is either unknown or hidden from view?

Gordon J. Louttit, Manhattan Beach

To the editor: Your article on the potential gas price increase that could result from California’s low carbon fuel standard overlooked the proven role ethanol can play.

California is the only state in the nation that caps the amount of low-cost ethanol allowed in gasoline at just 10%. Thousands of gas stations in other states sell gasoline containing 15% ethanol (called E15), often at a 15- to 30-cent-per-gallon discount to regular gas.

Indeed, a recent study by researchers from UC Berkeley and the U.S. Naval Academy found that allowing E15 could reduce gas prices by 20 cents per gallon in California, amounting to annual savings of $2.7 billion statewide.

Meanwhile, CARB’s own studies found E15 could provide significant environmental benefits by cutting emissions of the tailpipe pollutants that cause air quality and human health problems.

A bill (ABX2-9) to speed the approval of lower-cost E15 in California passed unanimously out of the state Assembly on Oct. 1 in a special session. But, in a head-scratching move, the Senate refused to consider the bill. California drivers, who pay the highest gas prices in the country, deserve better. Allowing E15 is an easy fix that can help save money and clear the air.

Geoff Cooper, Ellisville, Mo.

The writer is president and chief executive of the Renewable Fuels Assn., a trade group advocating for the ethanol industry. READ MORE