A group of US oil refiners that warned against a costly shift to a boutique fuel blend in the midcontinent want President Donald Trump's administration to let the states transition as planned this summer to avoid market turmoil.
The Midwestern bloc was supposed to move last year to the lower-volatility summertime fuel, which would allow retailers to keep selling both typical 10pc ethanol gasoline (E10) and blends with up to 15pc ethanol (E15). But the Environmental Protection Agency (EPA) punted the shift just days before summer driving season, frustrating fuel makers and distributors that had already invested millions to move to the boutique blend.
"Fuel suppliers should not be put in the same situation again this year", the American Fuel & Petrochemical Manufacturers (AFPM) told EPA on Wednesday, according to a letter shared with Argus.
The risk of changing rules remains. While seven states are still set to transition, Ohio backed out last month. Midwestern governors that previously saw the fuel shift as a way to help out corn farmers and pressure oil refiners to lobby for simpler federal E15 rules are now staring down the possibility of higher pump prices in an election year.
Any other states that want to cancel the fuel change should have to make a request to do so immediately, according to the refiner group, and at the very least before pipelines start requiring the special blend by 1 April.
EPA justified emergency waivers last summer aborting the midcontinent fuel change and allowing E15 gasoline across the country by warning of "extreme and unusual fuel supply circumstances caused by global conflicts". But AFPM warned EPA that such a move this year would be on shakier legal footing, pointing to data showing ample gasoline stocks across the US.
The refiners' advocacy comes as a council of Republicans in the US House of Representatives has missed multiple deadlines for reaching agreement on biofuel policy reforms. Earlier drafts circulated by the task force floated allowing year-round E15 sales nationwide and stopping the Midwestern states' transition.
The Clean Air Act exempts E10 from summertime smog rules that would otherwise prevent its sale but does not extend the same treatment to E15, despite a similar volatility profile. The midcontinent states as a workaround won EPA approval to opt out of the special treatment for E10, effectively putting E10 and E15 on equal footing by requiring lower-volatility blendstocks for both. The consequence is more complicated logistics for refiners, which may have to cut production of butane, which raises volatility, or invest in infrastructure to store and transport excess supplies.
The states approved to move to the lower-volatility gasoline this summer are Illinois, Iowa, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin. Kansas has signaled it could join them in the future.
