U.S. EPA Issues Waiver to Allow Temporary Sales of Summertime Higher-Ethanol Fuel

May 02, 2022

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by Stephanie Kelly (Reuters) The U.S. Environmental Protection Agency issued an emergency waiver for a higher-ethanol gasoline blend on Friday, allowing summertime sales of the fuel in an attempt to help lower gasoline prices at the pump.

The move represents a temporary win for the biofuels industry and corn farmers, as it will likely expand sales of corn-based ethanol, and a setback for oil refiners, which view ethanol as competition.

It also is an attempt to temper the pace of inflation which has surged to a 16-year high. read more

Rising consumer prices are seen as a major vulnerability for President Joe Biden's Democratic party leading into the November mid-term elections.

Biden first unveiled the plans to expand E15 sales earlier this month during a trip to an Iowa ethanol plant.

About 2,500 gas stations sell the higher-ethanol gasoline blend, called E15, as it is made up of 15% ethanol. There are more than 100,000 gas stations nationwide.

At current prices, E15 can save a family 10 cents per gallon of gas on average, said White House Press Secretary Jen Psaki in a statement on Friday.

E15 sales have been restricted during summer over concerns it contributes to smog in hot weather, though research has shown that the 15% blend may not increase smog relative to the more common 10% blends sold year-round.

The EPA on Friday said that consumers can use E15 without concern that its use in the summer will impact air quality.

EPA's emergency fuel waiver will go into effect on May 1 and will last for 20 days. However, Biden is committed to providing E15 all summer, Psaki said on Friday.

Though Friday's waiver for summertime E15 is temporary, biofuel advocates have pushed for a permanent way for the fuel to be made available year-round. Governors from eight Midwest states, many of which are major corn producers, took action this week to try to allow year-round E15 in their states. read more READ MORE

EPA formally issues emergency waiver for summertime E15 -- The administrator determined that 'extreme and unusual fuel supply circumstances exist,' EPA said in its announcement Friday. (Politico)

EPA Grants E15 Emergency Waiver for '22 -- EPA Grants Emergency Waiver to Allow E15 Sales to Continue Through Summer 2022 (DTN Progressive Farmer)

US EPA issues emergency fuel waiver to allow summertime E15 fuel sales (S&P Global)

EPA issues waiver to allow summer E15 sales (Agri-Pulse)

EPA APPROVES E15 WAIVER, ECONOMISTS EXPECT LITTLE AG IMPACT (Brownfield Ag News)

RFA Thanks EPA For Quick Action on Emergency E15 Waiver (Renewable Fuels Association)

Ethanol Report on E15 Action & Energy Analysis (Energy.AgWired.com)

EPA Issues Emergency Fuel Waiver for E15 Sales: The agency cited the Russia-Ukraine war as the reason for the waiver. (National Association of Convenience Stores)

OPINION: E15 receives green light for summer (Ethanol Producer Magazine)

Allowing E15 fuel year-round won’t increase sales very much, but it’s a symbolic victory for corn ethanol advocates (The Conversation)

More Biofuels Means Lower Gas Prices (Growth Energy/Ethanol Producer Magazine)

ABOUT THAT E15: (Poltico's Morning Energy)

From farmers to commuters, homegrown biofuels benefit everyone (Mankato Free Press)

Excerpt from DTN Progressive Farmer: "EPA is providing relief by extending the 1-psi Reid Vapor Pressure (RVP) waiver that currently applies to E10 gasoline to E15, which will enable E15 sales throughout the summer driving season in these areas, if necessary," the agency said.

"This action only extends the 1-psi waiver to E15 in parts of the country where it already exists for E10. E15 can already be sold year-round in parts of the country that have a reformulated gasoline program."

EPA said it does not "expect any impact on air quality" resulting from the waiver.

"EPA's research has shown no significant impact on evaporative emissions when the 1-psi waiver is extended to E15," the agency said. "With no significant impacts on emissions from cars and trucks, we expect consumers can continue to use E15 without concern that its use in the summer will impact air quality." READ MORE

Excerpt from S&P Global: The waiver covers a 20-day period, the maximum statutory limit, but the EPA said it would issue new waivers as long as "the extreme and unusual fuel supply circumstances" created by Russia's invasion of Ukraine persist.

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However, not everyone is on board with how the federal government is going about increasing use of biofuels as the views of the renewable fuel lobby continue to butt heads with those in the refining community.

The Fueling American Jobs Coalition has said that without action to lower biofuel blending requirements proposed for 2022, the E15 waiver would cause consumers to "pay more at the pump, without appreciably increasing ethanol consumption,"

The group of independent refiners, fuel retailers and union workers asserted that the E15 waiver would likely be overturned in court. It argued that such a waiver can only be granted when natural disasters create physical supply shortages, not "under the pretense of high fuel prices," as they say the administration has done.

Yet, the EPA believes it is standing on firm legal ground as it declared a fuel supply emergency based on the geopolitical conflict ensuing in Ukraine.

The agency said that it has been monitoring market supply disruptions caused by the conflict, and in consultation with the Department of Energy, determined there were "extreme and unusual fuel supply circumstances" that warranted waiving certain fuel requirements to help ensure adequate gasoline supplies.

The agency added that its research has shown no adverse air quality impacts from summer E15 use.

"Regardless of whether the waiver is legally justified, it will almost certainly allow for the sale of E15 during the entire summer of 2022, due to the nature of the US legal system where a lawsuit challenging the waiver will likely take years to resolve," Lavinsky (Corey Lavinsky, global manager of biofuels analytics at S&P Global Commodity Insights) said. READ MORE

Excerpt from Politico's Morning Energy: ABOUT THAT E15: Weeks after the Biden administration offered a waiver for summer-time sales of E15, fewer than 1,200 of the 2,300 gas stations equipped to sell the fuel were actually doing so, according to a Pro Analysis by POLITICO's Madi Alexander. The stations were largely concentrated in the Midwest. READ MORE A map showing states by the number of gas stations selling E15 fuel. The stations are concentrated in the Midwest, particularly Minnesota, Iowa and Wisconsin.