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The US will allow refiners and retailers to supply a gasoline blend with more ethanol than is usually allowed in some states, starting in May, and will waive other fuel rules, amid efforts to temper pump prices that have surged because of war in the Middle East.
The Environmental Protection Agency (EPA) on Wednesday issued emergency waivers allowing continued nationwide sales of gasoline with up to 15pc ethanol (E15), administrator Lee Zeldin announced Wednesday in brief remarks at the CERAWeek by S&P Global conference in Houston, Texas. The typically cheaper blend would have otherwise been restricted in much of the US during the summer because of rules to limit smog that do not apply to typical E10 gasoline despite a similar volatility profile.
The waivers also standardize blending rules across the US, reducing the risk of price spikes in areas where boutique rules can create fuel islands. The agency said this would help create more of a "single national gasoline pool" this summer.
For instance, EPA is allowing continued sales of E10 this summer in a group of Midwestern states that would have otherwise required that blend to be mixed with less volatile but costlier blendstocks. Governors of those seven states had asked for that carveout after war in the Middle East broke out.
The agency will also suspend federal enforcement of requirements for other regions of the US to switch to similarly low-volatility "boutique" gasoline fuel blends this summer. California and major metro areas such as Denver, Colorado make the switch each year as part of federally approved plans to comply with national air quality standards. It will be up to states and local jurisdictions to decide whether to maintain those specific standards, the agency said.
"Through the waiver, we are fortifying the domestic gasoline supply chain and providing Americans relief at the pumps ahead of the upcoming summer driving season," Zeldin said.
EPA can issue emergency waivers in "extreme or unusual" fuel supply situations that last 20 days and will have to be renewed to last through the summer.
The Wednesday announcement weeks ahead of the start of the summer driving season comes after oil refiners lobbied President Donald Trump's administration to clarify its summer plans sooner than in years past. The first round of emergency waivers last year came just days before summer driving season kicked off, frustrating fuel makers and distributors that had already invested millions to move to the boutique Midwestern blend. Pipelines too start moving to summer blends well before fuel reaches motorists.
Fight in Congress continues
While EPA has issued emergency waivers allowing continued E15 sales for the last four years, ethanol advocates cheered the announcement.
"With rising fuel prices and a war in the Middle East, this is the worst time to force retailers to bag E15 pumps," said Iowa Renewable Fuels Association executive director Monte Shaw.
But they also pushed Congress to find a more durable solution that does not depend on regulators. Congress has struggled for months to reach agreement on biofuel policy legislation that would permanently adjust air quality rules to allow E15 sales year-round. Some refiners have objected to earlier proposals that would restrict their ability to win exemptions from biofuel blend mandates.
Lobbyists close to the debate say there is disagreement in Congress over whether to continue pushing for far-reaching biofuel legislation that limits those exemptions or a slimmer E15 bill instead. Senate Agriculture Committee chair John Boozman (R-Arkansas) said at an event in Washington, DC on Monday that he supports E15 but that restricting exemptions could lead small refineries, including one in his state, to close.
Ethanol is typically cheaper than gasoline blendstocks, and the spread has widened since Tehran has retaliated against US-Israeli strikes by attacking energy infrastructure and halting tanker traffic. At the same time, E15 is not sold at the vast majority of retail fuel stations in the US, limiting the role the biofuel can play in curbing pump prices without other changes.
Farm advocates blame the lack of availability on the long-running impasse in Congress deterring retailers from investing in higher-blend infrastructure.
EPA is separately planning to finalize new biofuel blend quotas, which shape production margins for ethanol and demand for crops like corn, sometime this month.
