Biden eases ethanol restrictions in bid to tame U.S. fuel prices

Biden eases ethanol restrictions in bid to tame U.S. fuel prices

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The Biden administration is temporarily lifting seasonal restrictions on sales of gasoline blended with higher levels of ethanol, the latest White House effort to keep gasoline prices down.

President Joe Biden will announce during a visit to Iowa on Tuesday that the Environmental Protection Agency will issue a national emergency waiver to allow E15 gasoline — gasoline containing up to 15 percent ethanol, up from the standard 10 percent — to be sold across the U.S. sales within the range. America this summer.

At current prices, using the E15 could save drivers an average of 10 cents a gallon, senior government officials said.

Ethanol, usually made from corn, is a renewable fuel that can be blended with gasoline to reduce the amount of oil needed. But burning large amounts of ethanol in hot summer weather can cause smog, which led the EPA to ban the sale of E15 in 2011 from June 1 to September 15.

The White House statement came hours before inflation data expected to show U.S. consumer price growth soared in March as energy and food prices rose following Russia’s invasion of Ukraine.

Average gasoline prices hit a record high of more than $4.30 a gallon last month as the Ukrainian invasion sparked fears of a crude oil shortage. The national average on Monday was about $4.11 a gallon, according to auto group AAA, slightly below recent highs but more than 70% higher than when Biden took office last year.

Amid a challenging domestic political landscape and crucial midterm elections looming, the White House has sought to blame Russian President Vladimir Putin for rising consumer costs and has repeatedly referred to rising inflation as “Putin’s price hike.”

“The president . . . is trying to use all the tools at his disposal to address the price hikes stemming from Putin’s further invasion of Ukraine, a senior administration official said, noting that the administration announced last month that a record $180 million would be released from the U.S. A six-month emergency reserve of barrels of oil.

This is the third time the president has used the Strategic Petroleum Reserve since November last year. Bids tame prices.

Biden has also asked U.S. oil producers to ramp up production and rely on Gulf allies to increase output, though neither move has come to fruition.

About 2,300 gas stations across 30 states sell E15s, a fraction of the roughly 150,000 gas stations nationwide, according to the U.S. Department of Energy.

The administration of then-President Donald Trump lifted the seasonal restrictions in 2019, but the court rejected the request. A senior Biden administration official said they believed the latest move would not face legal challenges, explaining: “The approach, the process and the specific authority are different here.”

Administration officials said the EPA will work with states “to ensure that the entire summer driving season does not have a significant impact on air quality.” The agency’s analysis suggests the emergency waiver is “unlikely to have a significant impact on the ground” because E15 is more readily available in the Midwest than in large coastal cities where smog is more prevalent.

Ethanol industry and politicians from agriculture-dependent states have put pressure on the Biden administration to lift restrictions. Last month, a group of senators including Iowa Republican Chuck Grassley — the country’s largest corn and ethanol-producing state — urged Biden to reconsider. The EPA is considering other steps to increase the availability of the E15, senior administration officials said.

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