President Joe Biden on April 12 announced the suspension of a federal rule that prohibits the sale of E15 blended biofuels between June 1 and Sept. 25 in an effort to combat inflation and high fuel prices. E15 sales are typically banned during the summer under the Clean Air Act because of air pollution concerns.
The decision was hailed by the ethanol and corn industries. Corn futures were up 0.9 percent in pre-market trading after the announcement.
“Corn growers thank President Biden for ensuring drivers continue to have access to a lower-cost fuel choice and acknowledging how renewable ethanol helps reduce prices, lower emissions, and improve our nation’s energy security,” said Chris Edgington, President of the National Corn Growers Association (NCGA). “Farmers are proud to contribute to cleaner, less expensive fuel choices.”
The Labor Department on April 12 reported that consumer prices in March were 8.5 percent higher than a year ago, the sharpest increase since December 1981. Gas prices are up 48 percent since last year, in part because of instability in global markets after Russia’s invasion of Ukraine. On April 12, AAA’s national gas average was $4.09 a gallon.
According to NCGA, ethanol has been priced an average of 80 cents less per gallon than unblended gasoline at wholesale through March, and drivers currently save up to 20 cents or more per gallon where E15 is available. Bloomberg reported, however, that only 2,300 of the nation’s more than 150,000 filling stations sell E15, which is currently 5-10 cents cheaper per gallon than the much more common E10.
Biden said more than $100 million will be dedicated to build a biofuels infrastructure that supports farmers and the farm economy, provides more jobs, reduces reliance on foreign oil, and offers consumers a choice at the pump. The ethanol industry estimates summer sales this year could account for about 250 million gallons of E15.
As part of the Pandemic Assistance for Producers, the White House said USDA will also provide up to $700 million in funding through a Biofuel Producer Program to support agricultural producers that rely on biofuels producers to maintain a “viable and significant” market for agricultural products.
Corn use for ethanol has more than tripled since 2005, when President George W. Bush enacted the Renewable Fuel Standard that compels refiners and fuel importers to use a variety of biofuels. Ethanol now accounts for about 10 percent of U.S. gasoline usage, Bloomberg reported, up from less than a 10th of 1 percent in 1993.
In 2019, President Donald Trump attempted to allow E15 to be sold year-round, but the decision was overruled by a federal court, which said EPA exceeded its authority in making the decision.
Many oil companies have battled the use of E15 for years, Bloomberg noted, warning about potential engine damage from motorists inadvertently pumping the fuel into vehicles and other equipment not approved to use it. Some automakers have also warned that car warranties would be voided if motorists use E15. In addition, several environmental groups have pushed against E15, arguing that it will drive the production of more corn and more water pollution from agricultural runoff.
In August 2021, CHS Inc. announced that it would offer E15 at an additional 19 fuel terminals in Minnesota, Wyoming, Iowa, Nebraska, Missouri, and Kansas (GM Aug. 6, 2021). CHS is registered with the U.S. Environmental Protection Agency as an E15 manufacturer and sells E15 as an approved grade of fuel through its Cenex® brand retail locations.