Biden Seeks to Lower Gas Prices With More Ethanol

Wants EPA to allow high-ethanol E15 fuels during summer months

The Biden administration announced, on April 12, 2022, that the Environmental Protection Agency (EPA) plans to make E15 gasoline (i.e., gasoline that is 15% ethanol) available this summer, in an attempt to counter the impact of rising oil prices. Currently, EPA rules prohibit the sale of E15 gasoline in most of the U.S. from June 1 to Sept. 15.

The White House press release indicates that E15 fuel is available at about 2,300 gas stations nationwide and that it costs about 10 cents less per gallon on average than alternative fuels. However, E15 is less "energy dense" than alternative gasolines, meaning that drivers must buy more of it. Nonetheless, administration officials indicate that using it should deliver savings to most consumers.

Key Takeaways

  • The Biden administration has asked the EPA to allow the use of high-ethanol E15 gasolines during the summer.
  • The goal is to reduce gas prices and reduce reliance on imported oil.
  • However, the savings to consumers from this initiative is likely to be pennies on the gallon.
  • The administration also announced other initiatives related to promoting biofuels.

Emergency Waiver

To allow summertime sales of E15, the EPA is planning to issue an emergency waiver of its rules restricting E15 usage. After granting the waiver, the EPA will work with the states to ensure that there are no significant negative air quality impacts through the summer driving season. The EPA also is considering additional actions to facilitate the use of E15 year-round.

Promoting Energy Independence

The Biden administration touts this move toward allowing higher levels of ethanol blending in gasoline as a means to reduce dependency on foreign fuels. It states that relying more heavily on home-grown biofuels will help the U.S. move toward "real energy independence."

Related Administration Initiatives

The Biden administration's press release also touts "a historic release" from petroleum reserves around the world that is slated to put 240 million barrels of oil on the market in the next six months, or more than 1 million barrels per day. Meanwhile, President Biden has called for a "use it or lose it" policy to increase domestic oil production. Under this proposal, oil companies would pay fees on wells from their leases on acres of public lands that they are holding without producing.

The U.S. Department of Agriculture (USDA) will provide up to $700 million in funding through a new Biofuel Producer Program. This program will make payments to producers of biofuels to support this market. The USDA is also funding over $100 million in infrastructure investments designed to expand the availability and usage of biofuels.

Additionally, the administration announced a $4.3 billion program to support sustainable aviation fuel projects and fuel producers. A key goal is increasing the production of sustainable aviation fuels to at least 3 billion gallons per year by 2030.

Finally, the EPA is proposing a new approval for using canola oil in the Renewable Fuel Standard program to provide renewable diesel, jet fuel, and other fuels.

Article Sources
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  1. The White House. "Fact Sheet: Using Homegrown Biofuels to Address Putin's Price Hike at the Pump and Lower Costs for American Families."

  2. Reuters. "Biden to Allow Higher-Ethanol Fuel Sales in Summer to Check Gas Prices."

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