Oil lobby clashes with Trump over ethanol plan

The oil industry is trying to stop the Trump administration from implementing a plan to allow more ethanol to be blended into gasoline during summer months.

President Trump has stated that he’s committed to allowing E15 — gasoline with 15 percent ethanol — to be sold in the summer, which is currently prohibited due to air pollution concerns.

The Environmental Protection Agency (EPA) is expected to propose regulatory action to allow E15 soon, fulfilling a longstanding wish of the ethanol and corn industries, and lawmakers representing corn-heavy states.

{mosads}But the American Petroleum Institute (API) — whose member oil companies might sell less gasoline if the policy goes through — has launched a campaign to push back.

It argues that higher ethanol blends are unsafe for car engines, the change can’t be accomplished without congressional action and such a policy would kill bipartisan momentum to reform the Renewable Fuel Standard.

“The E15 waiver is a flawed, anti-consumer policy,” Frank Macchiarola, downstream group director for the API, told reporters Friday.

“With this so-called deal, the EPA would be giving the store to the ethanol lobby and sticking the American consumer with the tab,” he said. “We know that there is time. They can step back from this, they can reconsider it. And that’s what we’re urging them to do.”

Macchiarola said the group might support allowing E15 year-round, but only if Congress does it and also agrees to completely end the federal ethanol mandate in 2022.

The ethanol industry has been pushing relentlessly for the E15 policy.

“EPA’s nonsensical restriction on E15 is preventing consumers from saving money at the pump precisely when prices are typically at their highest and is hamstringing further expansion in the marketplace,” Bob Dinneen, president of the Renewable Fuels Association, said in a statement this month calling on the EPA to undo the restrictions.

The EPA is considering, as a favor to oil refiners in return for the E15 policy, putting new restrictions on the ability to trade the ethanol credits that refiners often buy to comply with the ethanol mandate. Refiners have complained that speculative trading unnecessarily boosts costs of the credits.

But Macchiarola said that’s also unacceptable and would hamper the market for the credits, known as Renewable Identification Numbers.

“RIN limits may hamper market liquidity, and in no way compare to the significance of allowing more incompatible fuels into the marketplace,” he said.

API launched an advertising campaign earlier this month on the web and television warning about the dangers of E15 for engines. Macchiarola declined to say how much the group spent on the ads.

API also joined with the American Fuel & Petrochemical Manufacturers earlier this week to write an open letter directly to Trump to oppose the policy.