Pain at the Pump Drives Biden’s Suffering in the Polls
by Ben Lefebre (Politico) “Feeling pain at the pump? Biden doesn’t care,” Republican National Committee Chair Ronna McDaniel posted on Twitter last week.
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And some of those discussions would likely backfire on Democrats, especially any effort to reduce ethanol blending levels in the nation’s gasoline pool, a program that the agricultural interests and farm-state lawmakers aggressively defend. Even the possibility of examining the Renewable Fuel Standard that governs biofuels drew a preemptive rebuke from the industry.
Geoff Cooper, head of the Renewable Fuels Association, a lobby group, said in a letter to Biden on Tuesday that they “were shocked to learn that one of the potential actions reportedly being discussed by the White House” concerned lowering ethanol blending requirements. In fact, he noted, the 1.1 billion barrels per day of biofuels that are blended into motor fuels were actually lowering the prices at the pump. READ MORE RFA Letter
RFA to Biden: ‘Double down’ on ethanol to cut prices at the pump (Renewable Fuels Association/Ethanol Producer Magazine)
Ethanol Waiting for Biden RFS Action: Biofuels Leaders Ask Biden to Fulfill Campaign Pledge to Support RFS (DTN Progressive Farmer)
Biofuels industry seeks certainty, stability: Growth Energy’s Skor testifies before House Ag on need for RFS levels and year-round E15. (Farm Progress)
The Enegy Price Storm: … GAS PRICE CAMPAIGN SEASON: (Politico’s Morning Energy)
BUT NOT ALL IS ROSY FOR INDUSTRY: (Politico’s Morning Energy)
Biofuels Groups Urge White House To Preserve RFS In Face Of Gas Hikes (Inside EPA)
Hearing Looks at Rural Renewable Economy (Energy.AgWired.com)
Biden’s Gas-Price Diversion: He sends out the FTC posse to chase the wrong suspects. (Wall Street Journal)
China Releasing Some Oil From Strategic Reserves After U.S. Invite (Bloomberg)
Biden’s Remedy for High Gas Prices: Blame Oil Companies (Bloomberg)
Biden Asks FTC to Examine Oil, Gas Companies’ Role in High Gasoline Prices (Wall Street Journal; includes VIDEO)
Biden asks for probe of potential ‘illegal conduct’ on gas prices (The Hill)
Biden’s conundrum: High energy prices are unpopular but could aid climate agenda (Houston Chronicle)
U.S. again presses OPEC+ as it weighs reserve release (Reuters)
No One Falls for Biden’s Gas-Price Blame Game (Wall Street Journal)
Kildee highlights bill that would allow more ethanol in gasoline year-round (ABC 12; includes VIDEO)
Excerpt from Renewable Fuels Association/Ethanol Producer Magazine: “In fact, cutting RFS volumes would most assuredly have the exact opposite effect on consumer gas prices. Reducing the domestic usage of low-cost renewable fuels like ethanol would increase demand for petroleum at a time when global oil inventories are already strained and prices are at seven-year highs.”
RFA noted that ethanol presently extends the U.S. gasoline supply by nearly 1.1 million barrels per day, equivalent to the combined crude oil production from Alaska, California, Utah, and Wyoming. According to a renowned economist and energy policy advisor to two former presidents, the use of roughly 1 million barrels per day of ethanol in the United States has lowered the average price of crude by $6 per barrel, thereby cutting the retail gasoline price by $0.22 per gallon.
The letter also pointed out that gasoline with just 10 percent ethanol (E10) is currently selling for 10-15 percent less (typically 35-50 cents per gallon) than “ethanol-free” gasoline (E0). Higher blends like E15 and E85 offer even greater savings.
“Rather than undermining the market for low-carbon renewable fuels, we encourage you to follow through on the President’s Day 1 pledge to ‘double down on the liquid fuels of the future,’” Cooper wrote. “This includes immediately proposing strong RFS volumes for 2021 and 2022, and taking swift regulatory action to facilitate the rapid expansion of E15 availability nationwide.” READ MORE
Excerpt from Farm Progress: During her testimony, Skor emphasized the importance of swift action on the Environmental Protection Agency’s rulemaking on the long-overdue annual renewable volume obligations under the RFS. The RVOs for 2022 are due by Nov. 30, 2021, an annual deadline set by Congress in the RFS. EPA has not even issued a notice of proposed rulemaking to establish those obligations. Additionally, the final “set” rulemaking was due Nov. 1, 2021, and EPA has not issued a notice of proposed rulemaking for that, either.
Skor also expressed concern about EPA reopening the 2020 RVOs retroactively and acceding to requests by oil states and refineries to lower 2020 RVOs for reasons unrelated to RFS compliance.
“The Biden administration simply cannot meet its climate goals while retroactively rolling back low-carbon biofuel blending requirements even further to help oil refiners, in particular, when the hardship they claim resulting from the COVID crisis has been widely shared across a number of economic sectors,” Skor states in the written testimony.
In response to questioning Skor adds this would be an unprecedented move that not only exceeds EPA’s legal authority under the RFS, but also would fail to recognize the RFS’ built-in mechanism, via the annual RVO percentage standard, that already accounts for any changes in fuel demand that differ from original projections. She says the RVOs need to be at least set at 15 billion gallons of conventional biofuels for 2021 and 2022 as outlined by Congress.
When asked whether the biofuels industry was better or worse off under this administration, Skor says the release of the RVOs levels is the “first real test of the administration’s commitment to follow through” on many of the comments made by President Biden on the campaign trail.
Skor also reiterated the need for year-round E15 use, and voiced support for legislation introduced by Rep. Angie Craig, D-Minn. She says two things help reduce the price of fuel: year-round E15 use and a strong implementation of the RFS. With the retail price of gasoline up $1/gallon, a strong RFS encourages and requires more blending of low-cost biofuels and year-round E15 supports drivers in offering a cheaper fuel source to manage fuel costs appropriately.
The Year-Round Fuel Choice Act of 2021 would make a slight, yet critical change to the Clean Air Act. The change would ensure the EPA can grant Reid Vapor Pressure volatility waivers to allow E15 and higher blend fuels to be sold at fuel retailers all months of the year. The D.C. circuit court ruling earlier this year would hinder retailers’ ability to sell E15 in the summer months, and this bill seeks to fix that by ensuring consumers and retailers can utilize E15 all year by allowing the EPA to grant RVP waivers.
Rep. Cindy Axne, D-Iowa, also a supporter of the E15 year-round legislation, says it is a top priority to see the legislation pass. Skor says the misguided court case will prohibit 85% of retail locations to not offer E15 during 3.5 months over the summer each year. E15 averages 5-10 cents per less than standard 87 gasoline, while offering a cleaner burning fuel. The E15 was already allowed for three summers and used on 25 billion miles.
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Skor also reiterated the climate benefits of current biofuels available today to help meet the Biden administration’s reduced emission goals. California’s Low Carbon Fuel Standard proves biofuels available today account for 80% of the credits issued.
“We have the ability to do so much more with the use of higher blends,” Skor says. By using modeling that accurately reflects what happens on the farm and in the plant, the 270 million cars on the road today using the low carbon fuel can also build momentum for additional R&D to expand into hard to electrify industries such as aviation biofuels. READ MORE
Excerpt from Politico’s Morning Energy: BUT NOT ALL IS ROSY FOR INDUSTRY: President Joe Biden wrote to Federal Trade Commission Chair Lina Khan on Wednesday to probe whether the oil and gas industry is manipulating the gasoline market to drive up prices. “Usually, prices at the pump correspond to movements in the price of unfinished gasoline,” he wrote. “But in the last month the price of unfinished gasoline is down more than 5 percent while gas prices at the pump are up 3 percent.”
Industry groups rejected Biden’s premise, reiterating their claims that it was the administration’s policies that were pushing up prices. And Kevin Book, managing director of ClearView Energy Partners, said Biden’s move “looks to us more like political signaling than economic substance,” adding that “past FTC investigations have generally been inconclusive, and the price divergences cited in today’s letter have happened on several occasions in the last decade.” Lorraine Woellert has more.
MARKEY JOINS THE SPR TRAIN: Climate hawk Sen. Ed Markey pushed for the U.S. to tap into the Strategic Petroleum Reserve and ban U.S. oil exports. Speaking with ME after a League of Conservation Voters event on Wednesday, Markey called the SPR “a weapon against oil company price gouging at the pump.” Senate Majority Leader Chuck Schumer has also called for tapping into the SPR, though Democrats aren’t united on the front, with House Majority Leader Steny Hoyer rejecting the idea. The White House has not taken a firm stance on the proposal.
Most market analysts say SPR releases cause little more than a blip in the market, but Markey said doing so would be “a signal” to industry “with more action to follow from the federal government.” During the LCV event, Markey said Democrats’ reconciliation package would be a boon for electric vehicles and other domestic clean energy technology that could allow the U.S. to wean itself off of global oil and gas markets. Read more from your host here.
YOUR SPR TOO, PLEASE? The Biden administration talked to some of the world’s biggest oil consumers about releasing some of their petroleum reserves as well, Reuters scooped. After the administration requested OPEC+ boost its output to help alleviate global oil prices, Biden officials discussed the potential releases with their counterparts in China, Japan, South Korea and India, Reuters reports, though there has been no policy decision on actually tapping into the stockpiles. READ MORE