Higher-ethanol fuel fight resume

Source: By Marc Heller, E&E News • Posted: Wednesday, February 21, 2024

Biofuel groups pin hopes on EPA allowing year-round sales of E15 in Midwest states, plus an emergency waiver to allow summer sales nationally.

An E15 fuel sign sits on display.
An E15 fuel sign sits on display during the Iowa Renewable Fuels Association’s meeting on Jan. 28, 2014, in Altoona, Iowa. Charlie Neibergall/AP
 The annual debate over letting gas stations sell higher-ethanol fuel in summer is heating up again as industry groups await key decisions by the Biden administration.

Officials are weighing two possibilities to allow sales of 15 percent ethanol fuel year-round: a request by eight Midwestern states for a permanent waiver of summer restrictions, and an emergency measure to temporarily permit such sales throughout the country. Fuel that’s 10 percent ethanol, called E10, is standard nationally.

Biofuel groups partially cheered a Reuters news report, based on anonymous sources, that the administration is prepared to grant the states’ request but not make it effective until summer 2025. And a speech by Agriculture Secretary Tom Vilsack at an ethanol industry conference Tuesday hinted that the emergency measure could be put in place this summer as it has been for the past few years.

“If true, we appreciate the EPA’s decision to finalize year-round E15 in the eight states that petitioned them for this ability to offer year-round sales,” said Emily Skor, CEO of the ethanol group Growth Energy. “However, delaying the rule until 2025 will create a needless challenge for the millions of drivers that depend on E15 for summer savings and will require a solution to maintain continuity for this summer.”

An EPA spokesperson said the agency couldn’t comment on the Midwest states’ request as the agency’s draft final rule is being reviewed at the White House Office of Management and Budget.

A decision on an emergency waiver of summer restrictions isn’t imminent; in past years, that announcement has come in April as it’s based on market conditions and other short-term factors. In the past, the Biden administration has cited disruptions related to the Covid-19 pandemic and the war in Ukraine, for instance.

The Midwest states include Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. They asked EPA in 2022 to waive rules that effectively keep E15 out of the market in summer due to ozone regulations while allowing for E10 fuel, even though the difference between the two isn’t significant in the industry’s estimation. The change would put E15 and E10 on equal footing.

Petroleum groups opposed to additional E15 on the market say the Clean Air Act doesn’t allow for lifting the seasonal restrictions permanently and that only Congress can change that.

On a practical level, making E15 available in summer requires months of lead time so refiners can make changes to production, according to American Fuel & Petrochemical Manufacturers. Refiners start making that switch early in the year, and even a two-year advance notice could reduce overall supplies and drive up costs, the group said.

“We’ve made clear to the administration that it’s too late for 2024 implementation and even 2025 would be problematic,” said Patrick Kelly, the AFPM’s senior director of fuels and vehicle policy, in a statement.

Vilsack, at an ethanol conference, said he’s confident E15 will become available year-round, but he didn’t specifically say the administration is granting the Midwest governors’ request, according to news reports. He did say summer waivers are likely again.

E15 fuel is allowed in all states but California, where the Renewable Fuels Association has been pressing the California Air Resources Board to allow it as a lower-carbon alternative.

While the regulatory moves play out, ethanol advocates are pushing for legislation in Congress to allow E15 sales year-round nationwide. That effort has support as well from the American Petroleum Institute, which said it’s preferable to expanding availability in just a handful of states.