Biden wants to expand use of ethanol gas blend into summer to ease pump prices

WASHINGTON – President Joe Biden announced Tuesday another step to try to reduce prices for drivers who have been paying more to fill up their tanks: expanding the availability of biofuels.

Visiting an ethanol plant in Iowa, Biden  said the administration plans to allow E15 – gasoline that uses a 15% ethanol blend – to be sold during the summer .

"You’re going to be able to keep filling up with E15," Biden said in a large barn in front of an American flag flanked by tractors. "It’s not going to solve all our problems. But it’s going to help some people."

E15 can cost 10 cents per gallon less on average at the 2,300 gas stations where it's sold, according to the White House.

There are about 145,000 gas stations around the country.

Tom Kloza, global head of energy analysis for OPIS (the Oil Price Information Service), said allowing E15 to be sold this summer is a good political move by the administration that will help some people save money, even though vehicles using the blend get slightly less gas mileage.

Overall, E15 is just a “bit player” in the fuel distribution system, Kloza said. The blend hasn’t caught on with the public, because drivers are often confused about whether E15 is a good choice for their car.

“If I were looking at a toolbox, this is not a hammer. This is kind of a little tiny screwdriver or maybe a piece of emery board or whatever,” Kloza said of Biden’s attempt to increase fuel supplies. “But I understand the rationale for it.”

Jack Mitchell, regional vice president of POET Bioprocessing, right, gives President Joe Biden and Rep. Cindy Axne, D-Iowa, a tour of the facility in Menlo, Iowa, on April 12.

Regular gas averages about $4.11 a gallon compared with $2.86 a year ago, according to AAA, and Biden is under political pressure to show he is doing what he can to ease the price pain at the pump.

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Americans are feeling pain at the pump, as gas prices hit record highs of $4.33 per gallon in March

Inflation hits high on oil price spike

 The Labor Department said Tuesday that consumer prices leaped 8.5% since last March, the fastest pace since December 1981. Inflation has notched 40-year highs for five straight months.

Gasoline prices, which jumped 18.1% from March 2021 to March 2022, were the main reason for the inflation spike.

Inflation is expected to “moderate" by the end of the year, White House press secretary Jen Psaki told reporters traveling with Biden to Iowa Tuesday.

“But we are not going to wait for that,” she said, pointing to Biden’s announcement as an example of steps the administration is taking to help consumers.

Biden said the United States would try to spur oil production and tap strategic reserves to ease gas prices, which spiked after Russia invaded Ukraine, prompting a ban on Russian oil imports.

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Democrats labeled the increase "Putin's price hike," though Republicans charge that Biden could do more to increase domestic oil production.

Iowa's Republican Party greeted Biden with a billboard blaming him for high gas prices.

"Joe did that," the ad asserts. 

Tom Seng, an energy expert at the University of Tulsa, called increasing the use of ethanol a short-term solution. It would raise the cost of corn and other grains used to make ethanol, he said.

Biofuels are limited, but EPA can grant waiver

Administration officials said the action Biden announced Tuesday will increase the use of home-grown biofuels, reducing dependence on foreign fuels.

Though almost all gasoline in the USA contains 10% ethanol, access to E15 is curtailed annually in some states from June 1 to Sept. 15 as a measure to limit smog during warmer weather.

The Environmental Protection Agency determined that lifting that restriction is not likely to have a major environmental impact because most of the gas stations that sell E15 are not in areas with air quality issues, according to the White House.  

The EPA is not likely to act until closer to June, when it will determine if a national fuel supply emergency still exists. The agency can grant waivers in 20-day increments. 

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An ethanol production facility.

Under President Donald Trump, the EPA granted E15 a waiver for year-round use in 2019. Last year, the U.S. Court of Appeals for the District of Columbia Circuit struck down the rule, saying the agency exceeded its authority. The U.S. Supreme Court declined in January to hear a challenge to the ruling.

Asked why Biden's actions won't run into the same problem, senior administration officials said – without going into detail – that Biden's approach is different.

In addition to addressing energy prices, Biden's Iowa trip is part of the administration's spotlight on rural communities this month. Cabinet secretaries and other administration officials are traveling to dozens of communities to tout what Biden is doing for rural areas. 

"Investments are being made to reflect the value and importance of rural places and people," Agriculture Secretary Tom Vilsack, the former governor of Iowa, said Monday.

Iowa is the nation's top producer of renewable fuel and the corn used to make it.

Elected officials, Republicans and Democrats, from Iowa and other Corn Belt states, as well as farm groups and biofuel producers, pressed Biden to use his emergency powers to allow summer use of E15.

A Harvard study last year said the use and production of ethanol emit up to 46% fewer greenhouse gases than gasoline. A University of Wisconsin study challenged that finding, saying ethanol is worse for the environment than gasoline, based on changes in how land is used to grow the corn used to produce it. The Argonne National Laboratory disagreed with the Wisconsin study last month, saying the group overestimated carbon loss from soil and double-counted some emissions, among other concerns.

Contributing: Paul Davidson