EPA pushes forward plan to increase ethanol mix in gasoline

President Trump on Tuesday advanced a plan that would expand the use of ethanol in gasoline across the U.S., a move pushed by corn farmers but expected to draw ire from the oil and gas industry.

The latest step pushes forward a proposal that would allow the year-round sale of gasoline blended with up to 15 percent ethanol, known as E15. Previously, E15 was restricted under air pollution requirements between June 1 and Sept. 15, as science shows burning ethanol in warmer temperature leads to heightened ground-level ozone pollution and smog. The new plan will effectively lift those sales barriers.

{mosads}Also under the plan, Trump will make it harder for refiners to trade credits for biofuel use known as renewable identification numbers (RINs).

Currently, refiners and importers of natural gas must blend their fuels with ethanol before sale or purchase RINs sold on the market.

The administration’s RIN reform would include requiring public disclosure of RIN, limit the length of time that nonrefineries or importers can hold a RIN and improve compliance obligations on a more frequent basis. The White House last October directed the Environmental Protection Agency (EPA) to initiate a rulemaking to expand waivers for E15 and change way RINs were traded on the market. Tuesday’s proposed rule very closely resembles the plan put forth by Trump.

The EPA on Tuesday said it will be looking for public comment on the rule and will hold a public hearing March 29.

“Consistent with President Trump’s direction, EPA is working to propose and finalize these changes by the summer driving season,” EPA Administrator Andrew Wheeler said in a statement. “We will be holding a public hearing at the end of this month to gather important feedback.”

Trump has long hinted at his plans to expand the ethanol market, a promise he first made during his presidential campaign.

Last July, he said he was “very close” to allowing higher ethanol content in gasoline.

The ethanol industry has long pushed for a waiver from the EPA that would allow fuel stations to sell E15. Currently, most gasoline sold in the U.S. contains 10 percent ethanol, with about 1 percent of filling stations selling E15.

“I stuck with ethanol, most of the other candidates weren’t there,” Trump said in July.

Former EPA Administrator Scott Pruitt had planned to allow E15 sales year-round as part of a deal between oil and corn interests to change how the administration enforces the federal mandate to blend ethanol into gasoline.

But that deal fell apart amid corn-state opposition to allowing ethanol exports to count toward the federal mandate, effectively reducing the mandate.

The ethanol industry hailed Trump’s plan Tuesday, calling it a cleaner fuel choice for American.

“This rule is a critical milestone for rural Americans who make renewable biofuels and for all American drivers, who may soon have a cleaner, more affordable, higher-octane fuel all year long,” said Growth Energy CEO Emily Skor in a statement.

Supporters called the move a win for American farmers.

“With ethanol plants shutting down or idling and farmers experiencing the worst conditions in more than a decade, removing the summertime ban on E15 once and for all would send a desperately needed signal to the marketplace,” said the Renewable Fuels Association in a statement.

The American Petroleum Institute (API) pushed back, calling the decision a “lose-lose” for American consumers.

“The administration needs to scrap this anti-consumer policy that exacerbates problems with the failed Renewable Fuel Standard,” said Frank Macchiarola, API’s vice president of downstream and industry operations.

“Studies have shown that E15 gasoline can damage vehicle engines and fuel systems — potentially leaving Americans to pay expensive car repair bills due to bad policy out of Washington.”