EPA evaluating options ahead of summertime restrictions on E15 sales: Regan

The Environmental Protection Agency is looking at options for greater utilization of E15, a gasoline blend containing 15 percent ethanol, to help alleviate pain at the pump, EPA Administrator Michael Regan said April 6, as a deadline looms for either regulatory or legislative action to prevent a summertime halt in sales of that fuel across two-thirds of the country.

During a Senate Environment and Public Works Committee hearing on the agency's proposed fiscal year 2023 budget, Regan was pressed by several lawmakers on the role biofuels could play in bringing down gasoline prices that have shot up in response to Russia's invasion of Ukraine and geopolitical concerns over fuel supplies.

"With the gas prices that are sky high out there and the administration stating they want to do absolutely everything they can to bring down the cost to our consumers, E15 is often the most affordable option that exists for consumers at the pump," Senator Joni Ernst, Republican-Iowa, said, and asked Regan if "this low-cost option [would] be eliminated during our summer months."

Regan said that the EPA, in collaboration with the US Department of Agriculture, is currently evaluating what Clean Air Act authorities and flexibilities exist to potentially take advantage of E15.

While E10, which contains 10% ethanol and 90% gasoline, is widely accepted and available from retailers across the country year-round, E15 cannot be sold in conventional gasoline markets from June 1 to Sept. 15 due to EPA restrictions on air pollution from gasoline.

That blackout period was lifted by the Trump administration, but the DC Circuit Court of Appeals last year vacated the 2019 EPA rule that extended a summertime waiver of Reid Vapor Pressure requirements to biofuel blends containing more than 10% ethanol (American Fuel & Petrochemical Manufacturers v. EPA, 19-1124).

E15 summer remedies

The summertime sales ban impacts about 80% of the roughly 2,500 existing E15 retail locations. It does not impede year-round E15 sales in reformulated gasoline markets, representing about 30% of the US gasoline market.

Biofuel and farm groups contend the court's ruling will devastate the market expansion of homegrown biofuels if this barrier to sales is not resolved, as the restrictions have deterred some retailers from offering E15. The Supreme Court in January refused to hear an appeal from the ethanol industry to reinstate year-round sales of E15, leaving it up to the EPA or Congress to find a solution.

Bills have been introduced in the House and Senate to allow summertime sales of higher ethanol blends, and a bipartisan group of 16 senators last month wrote to President Joe Biden, asking him to "utilize any administrative authority to permit the sale of E15 fuel over the 2022 summer driving season."

Senator Tammy Duckworth, Democrat-Illinois, urged Regan to do his part to address the issue as well, particularly while Russia's actions continue to stress global energy markets.

"At $1/gal lower than gasoline blendstock, it seems that the Biden administration is missing an opportunity to introduce a readily available, strategic reserve of ethanol into the global economy," she said at the hearing. "And in fact, by blending in more ethanol, you would actually stretch the availability of diesel fuel itself."

Regan responded that he agreed that "E15 can provide a less expensive [fuel] option based on the data that we've seen as of late."

He again assured lawmakers that he is "evaluating what options we might have at EPA to look at utilizing E15 at a level that would be helpful to the American people and to help alleviate some of the pain that we've seen since Russia launched this war against Ukraine."

Of note, the EPA in the past has used its emergency fuel waiver authority to temporarily lift seasonal restrictions on E15. For instance, the agency in 2017 approved such a short-term waiver in response to fuel supply disruptions caused by Hurricane Harvey.

Stabilizing the RFS

In line with Biden's call for every option for providing relief at the pump to be considered, Regan said he is also "laser-focused around providing certainty" in the Renewable Fuel Standard program.

The agency is working on finalizing a rule setting the amount of renewable fuel that must be mixed with gasoline and diesel for the 2020, 2021 and 2022 RFS compliance years. New renewable fuel volume obligations (RVOs) for those years were pitched in December after much delay precipitated by the Trump administration leaving office without proposing an RVO for 2021.

"Whether it's E15 or RVOs, we need to have a comprehensive approach to alleviating our dependence on oil, and I think that this is a path that we should pursue and we are," Regan told lawmakers.

He later added that the EPA is "finally on a path to stabilize [the RFS] program."

He acknowledged concerns over the specific blending requirements in the latest proposal and the treatment of small refinery exemptions that must still be ironed out.

"But the reality is that this is the first time that the agency has put a string of three years together to create some predictability, and as we pursue ... 2023 and beyond, it's our opportunity to stop ping-ponging back and forth, learn from the past lessons of what the courts have dictated and move forward in a very sound way to meet Congress' intent of getting the biofuel levels introduced into this market that I think we all want to achieve," Regan said.

He described the pending proposal as the first step, with RVOs for 2023 and beyond providing an even greater opportunity to push biofuels production and deployment of sustainable fuels.