Biden EPA to Allow Summer Sales of High-Ethanol E15 Gasoline

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(Bloomberg) -- Biden administration officials have decided to issue an emergency waiver that will allow widespread sales of higher-ethanol E15 gasoline this summer, following a strategy used last year to help tamp down high pump prices.

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The move, set to be announced by the Environmental Protection Agency on Friday, will temporarily exempt the 15% ethanol fuel blend from volatility requirements that effectively block sales from June 1 to Sept. 15 throughout much of the country. The planned exemption was described by people familiar with the matter who asked not to be named because the decision isn’t public. Spokespeople for the EPA did not immediately respond to requests for comment after normal business hours.

The waiver comes after weeks of lobbying by ethanol advocates, including elected officials from corn-producing Midwest states, who were frustrated by a separate Biden administration decision to delay another policy shift that aimed to more permanently expand summertime E15 sales.

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It also is the latest sign of the biofuel industry’s political clout in the nation’s capital, coming just days after House Republican leaders yielded to demands of Midwest lawmakers and gave biofuel tax credits a last-minute reprieve from their bill abolishing hundreds of billions of dollars in clean energy incentives.

To justify the emergency move, the EPA is set to cite similar conditions that provided the foundation for a series of the temporary waivers last year, the people said. At the time, the EPA argued that the fuel volatility waiver for E15 was in the public interest and needed to address “fuel supply circumstances” spurred by the war in Ukraine.

Ethanol advocates argued those circumstances are actually worse now — with tight gasoline inventories and less emergency crude in the nation’s stockpile even as the war rages on.

There are political benefits, too. While gasoline prices aren’t near last year’s highs, they remain elevated heading into the summer driving season — and are one of the most visible forms of inflation, weighing on Biden’s reelection bid. If prices spike again, Biden could point to the E15 action as an attempt to provide relief.

Even so, E15 is only available at about 2,700 of the nation’s more than 150,000 filling stations. However, an analysis conducted for the pro-ethanol group Growth Energy said that when summertime E15 sales were greenlighted last year, the blend cost 16 cents-per-gallon less than conventional E10 on average.

Oil industry advocates have questioned the legality of the emergency approach, raising the specter of a court challenge.

Conventional E10 gasoline, which is widely sold across the US, has a partial waiver from the same fuel volatility limits already — an exemption Midwestern governors have asked the EPA to abolish.

--With assistance from Kim Chipman.

(Updates with waiver justification and other details from fifth paragraph.)

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