LINCOLN, Neb. (DTN) -- New data from the U.S. Energy Information Administration show the Biden administration's waiver that allowed E15 sales last summer in response to higher gas prices from the war in Ukraine, led to an all-time-high ethanol blending rate and saved consumers at the pump.
The EIA report was released on Wednesday and highlighted by the Renewable Fuels Association in a news release.
The EIA said the U.S. ethanol blend rate hit a summer record 10.5% in 2022 and averaged about 10.6% in June and August.
"Fuel ethanol's price discount to gasoline was one factor that led to the higher summer blend rate in 2022," the EIA said.
"Although ethanol prices have been high in 2022, they have been low relative to gasoline prices, which were at their highest since 2014 this summer because of low domestic inventories and constraints on refining capacity."
RFA President and CEO Geoff Cooper said the data show drivers will turn to lower-cost fuels when gasoline prices are high.
"This new analysis from EIA confirms that American drivers gravitated toward lower-cost E15 and E85 this summer as war in Ukraine drove pump prices to record heights," he said in a news release.
"The report also demonstrates that President Biden made the right call by issuing emergency waivers to allow the continued sales of E15 through the summer months. The Biden administration's emergency waivers helped stave off fuel shortages and ensured consumers had uninterrupted access to E15, which was typically priced 20 cents to 40 cents per-gallon lower than regular gasoline. EIA's analysis also shows that consumption of lower-carbon renewable fuels increases, as expected, when the Renewable Fuel Standard and its RIN (renewable identification numbers) market mechanism are allowed to work as intended. This report comes at a critical time and underscores the importance of permanently removing the summertime barrier to E15 sales and implementing robust RFS volume requirements for 2023 and beyond."
A total of nine states have petitioned EPA to allow them to permanently offer year-round E15 in their states. That includes Iowa, Illinois, Kansas, Minnesota, Nebraska, North Dakota, South Dakota, Wisconsin and Ohio, https://www.dtnpf.com/….
RFA's Chief Economist Scott Richman also conducted an analysis that found an additional 194 million gallons of E15 were sold during the summer as a result of the Biden administration's RVP waivers, saving American consumers $57 million.
EIA said in the report it had raised its forecast for the average 2022 fuel ethanol blend rate to a record 10.4%.
"This year's annual average blend rate has been higher so far than in prior years, averaging 10.3% from March through July, compared with 10.1% for the same months in 2020 and 2019 -- the most recent year that EPA set RFS targets for ethanol at the current maximum," EIA said.
"Following August's average blend rate of 10.6%, the 2022 annual average blend rate increased to 10.4%. We forecast the annual average fuel ethanol blend rate to remain near current levels and end the year at 10.4%."
EIA also said E85 sales have been on the rise.
"From June to August 2022, U.S. production of E85 conventional gasoline was at record levels, averaging 21,000 barrels per day over those three months. In comparison, conventional E85 production averaged 15,000 b/d from June to August 2021 and was generally lower in all prior months. In addition, E85 is becoming increasingly available. According to the U.S. Department of Energy's Alternative Fuels Data Center, the United States had 4,331 E85 fueling stations as of January 2022, a 10% increase (385 stations) from the prior year."
Todd Neeley can be reached at firstname.lastname@example.org
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