The Environmental Protection Agency is lifting restrictions on summer sales of E15, checking off a top policy priority for corn growers and the biofuel industry but kicking off a new chapter as the battle over the higher ethanol blend likely heads to the courts.
Under the rule released Friday, fueling stations across the country will be able to sell E15, a blend of vehicle fuel with 15 percent ethanol, as consumers hit the road for the summer driving season. The rule also modifies regulations for the biofuel credit market, changing the way Renewable Identification Numbers can be held or reported. Most gasoline on sale now contains about 10 percent ethanol.
“Following President Trump’s directive, today’s action expands the market for biofuels and improves the RFS program by increasing transparency and reducing price manipulation,” EPA Administrator Andrew Wheeler said.
Speaking to reporters on Friday, Bill Wehrum, EPA’s assistant administrator for air and radiation, said the agency expects the action to boost renewable fuel sales.
“We’re at a point where the market is saturated with E10, and to be able to blend more ethanol into the gasoline supply, we need to go above E10, and that’s where E15 comes in,” he said.
After floating some ideas in the proposed rule that raised eyebrows in oil and biofuel offices alike, the final rule is a fairly straightforward Reid Vapor Pressure waiver and RIN market reform measure. There’s no mention of the blender pump language in the proposed rule, and the RIN position and holding limits that concerned refiners are also left out.
But that doesn’t mean any of those issues are off the table in the future. Wehrum said the RVP waiver “was never intended to be the place where we would finalize” changes to blender pump regulation. As for the RIN reforms in the proposed rule but not made final — limiting RIN purchases to only obligated parties and limiting the duration non-obligated parties can hold RINs — Wehrum said those ideas are not rejected, but “we’re putting them in a parking lot right now.”
“We’re going to work in a stepwise fashion and once we get better insight into the market, we will have those proposals still available there to take final action on if we wanted to,” Wehrum said of the RIN reforms. “We proposed them because we think they could be very well be effective tools for dealing with manipulation if it’s found to exist.”
The action brings to a close a lengthy chapter in the E15 fight. The fight for RVP relief has been a top lobbying issue for the biofuel sector for years, which was glad to see President Donald Trump announce plans to address the issue last October. But that announcement was followed by months of inaction and a prolonged government shutdown, raising concerns that the EPA would either miss the June 1 deadline or be forced into a sort of buzzer-beating regulation.
But now, attention shifts to the likely legal challenge to come from the oil industry. The sector has been vocal from the beginning of the process of its intent to sue if EPA follows through with the E15 changes, saying the agency lacks the legal authority to do so. Wehrum addressed that possibility with reporters Friday morning, saying he expected the language to hold up to legal scrutiny.
“We believe everything we’re doing is wholly consistent with the act,” he said. “If we didn’t believe that, we wouldn’t be doing it.”
This summer will be the first year the higher ethanol blend can be sold after years of effort on the part of the biofuels industry to secure the waiver. Growth Energy CEO Emily Skor said the lack of interruption in E15 availability could be a huge boost to the overall sale of renewable fuels.
“We estimate this one change will generate over a billion new gallons of ethanol demand in the next five years,” she said in a statement. “Over time, demand for E15 could boost the market for American grain by an additional two billion bushels.”
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