The Trump administration on May 31 finalized a rule for the Renewable Fuel Standard (RFS) program that will allow the year-round sale of gasoline containing 15 percent ethanol.
The Environmental Protection Agency (EPA) initially released the 2019 proposed rule modifications for the RFS on March 21.
Iowa Renewable Fuels Association (IRFA) Executive Director Monte Shaw said the final rule provides a reasonable, intellectually-consistent, legally-defensible solution for year-round E15 access.
“The Iowa biofuels community thanks President Trump for delivering on his promise to allow consumers year-round access to E15.” Shaw said in a press release. “This is positive news for rural Iowa at a time when we can really use it. E15 will provide an immediate boost for ethanol demand and the long-term potential is quite significant. As a lower-cost, cleaner-burning fuel, E15 has been in high demand where it has been available.”
William Wehrum, EPA assistant administrator for air and radiation, said the rule change was a presidential priority.
He said the new rule should cause a bump in sales at roughly 1,000 filling stations that already offer E15, while encouraging more to offer it.
Iowa Senator Joni Ernst, chairman of the Senate Agriculture Subcommittee on Rural Development and Energy and a member of the Senate Environment and Public Works Committee, had been pushing for the rule.
“Ethanol is an energy source that supports tens of thousands of jobs across the country,” Ernst said in a press release. “By granting the sale of E15 year-round, we’ll see an economic ripple throughout farm country, rural communities, and the entire nation.”
The rule change was announced one day before retailers were required by law to change to lower ethanol blends for the summer.
Sale of E15 had been restricted from use between June 1 and September 15 because the EPA had previously ruled that E15 creates more smog in the summer than E10 gasoline.
“President Trump delivered on his promise to Iowans,” Ernst said. “Expanded access to E15 provides Iowa consumers a cleaner, more affordable choice at the pump. We’ll see an increased demand for corn, thus creating an economic booster for our state’s growers.”
The E15 rule change came along with rule changes meant to boost transparency and prevent price manipulation of the Renewable Identification Numbers (RINs) used by refiners as credit for compliance with the biofuel blending quotas in the RFS program.
“This rule also reforms the RIN market by requiring public disclosure when RIN holdings held by an individual actor exceed specified limits,” Ernst said. “Transparency is critical here, and something that’s been lacking at EPA for quite some time. This is a step in the right direction, but I’ll continue to push the agency to be more forthcoming, especially when it comes to small refinery exemptions and the process in which they grant those waivers.”
“Some of the proposed RIN changes would have undermined the entire RFS,” Shaw said. “We urge President Trump to ensure those proposals remain, as President Reagan would say, on the ash heap of history, and that they not be resurrected in the future.”
Shaw warned that 39 small refinery exemption (SRE) requests could still upset the progress.
“If granted, these SREs would rip the heart out of the RFS,” he said. “Not just because of the destroyed gallons, but because they are simply unjustified given
the current market conditions. Today we thank President Trump for fulfilling his E15 promise. Yet if in the coming weeks, the Trump administration grants these SREs, it will break his other promise to biofuels supporters – to protect the RFS. We are sincerely thankful for today’s action that will create tens of millions of gallons of immediate demand for ethanol, but all of this will mean nothing if unjustified SREs gut hundreds of millions of gallons of demand. The fact is, to grant hardship waivers when RINs can be purchased for less than 10 cents is completely unjustifiable under the law, and we are calling on President Trump to ensure his EPA denies the 2018 SRE requests.”
The American Petroleum Institute (API) plans to sue the administration over the rule.
“This action by EPA makes no sense and is contrary to the law, congressional intent and decades of agency precedence,” said Frank Macchiarola, an API group director. “We will challenge it vigorously.”
API argued that the EPA is flouting the plain text of the Clean Air Act by extending an existing waiver to E15. Marathon Petroleum Corp. said the EPA’s move to consider E15 “substantially similar” to conventional E10 gasoline is “arbitrary and capricious” -- a fatal failing under a federal law governing rulemaking. The American Fuel and Petrochemical Manufacturers argued that the EPA is taking action previously rejected by Congress.
Ethanol advocates said the EPA is on solid legal footing. The EPA’s move to grant a waiver to E15 “reflects the best, most natural reading” of the Clean Air Act, and that higher-ethanol blend is substantially similar to E10, said Growth Energy Chief Executive Officer Emily Skor.
Shaw noted that the petroleum industry has vowed for years to sue the EPA over the E15 rule.
“The key for this rule is not just that it approves year-round E15, but that it does so based on the best science and legal precedents that will survive the Big Oil onslaught in court,” Shaw said. “The petroleum industry has tried everything to stop this day from coming. It’s no surprise they don’t want to compete with E15, which is lower-cost, cleaner, and higher-octane.”
This report includes information from the Washington Post News Service.