API Supports Legislation That Would Help Address Potential Fuel Supply Impacts in Midwest

Source: By Will Hupman, API • Posted: Sunday, December 11, 2022

API and 11 other trade associations are asking Congress to head off pending changes to regional gasoline standards that could result in gasoline supply disruptions in the Midwest as early as next year.

In a letter to congressional leaders, API and the other groups support bipartisan legislation that would allow the year-round sale of E15 gasoline nationwide. This would ensure uniformity across America’s fuel supply – bringing regulatory certainty and consistency for refiners, fuel marketers and retailers – and could help spare consumers from potentially higher costs and supply disruptions.

By allowing for the year-round, nationwide sale of E15 while also preserving access to lower ethanol gasoline blends, the legislation strengthens the reliability of the fuel supply chain and ensures American consumers have access to the fuels they depend on every day.

Legislation is needed in response to nine Midwestern governors who petitioned EPA earlier this year to remove the summertime waiver for 10% gasoline blends, for the stated intent of allowing the sale of E15 year-round in their states.

But granting the governors’ request would require production and regional distribution of two new grades of lower vapor pressure gasoline, effectively creating a boutique fuel market in the Midwest. In a separate letter to leaders of the jurisdictional committees in the House and Senate, I cautioned that if the governors’ petitions bring about final regulatory action by EPA, the resulting state-by-state outcome could negatively impact the reliability of gasoline supply to consumers in those states.

The potential problems would be addressed by proposed legislation authored by U.S. Sen. Deb Fischer (R-Nebraska), allowing year-round, nationwide sale of E15. API and the other groups wrote:

By ensuring uniformity across the nation’s fuel supply chain, federal legislation will provide more flexibility and result in more consistent outcomes than a state-by-state regulatory landscape. In the absence of such legislation, we could see gasoline marketplace uncertainty and political disputes over E15 continue to resurface every summer. Thus, we urge Congress to act quickly to adopt legislation that will bring certainty and consistency to the fuel market, while also finally resolving long-standing differences among many stakeholders about fuel volatility regulations.

The Fischer legislation is supported by an unprecedented mix of stakeholders. In addition to API, these include the Renewable Fuels Association, the National Corn Growers Association and the National Association of Truck Stop Operators.

Timing is especially urgent if EPA proceeds on the governors’ requests with the intent to finish new regulations prior to the 2023 summer driving season. Such a short timeline would leave no opportunity to make the refinery and infrastructure upgrades necessary to ensure an adequate supply of E10/E15 fuels.    

Midwest states could be at increased risk of gasoline supply disruption if EPA takes the wrong approach on the governors’ petitions. Pursuing the commonsense solutions in Sen. Fischer’s legislation is the better approach for policymakers to choose.

About The Author

Will Hupman is API vice president of Downstream Policy. Will rejoined API after serving as director of Federal Affairs for the Sherwin-Williams Company. Prior to working for Sherwin-Williams, Hupman spent six years on API’s federal relations team, engaging on a range of fuels, tax and environmental issues. He earned his bachelor’s degree from the University of North Carolina at Chapel Hill and a J.D. from Louisiana State University.