Biden Approves State E15 Requests

ORLANDO, Fla. (DTN) -- EPA has approved E15 petitions for eight states effective in 2024, in a proposal announced by an agency official Wednesday during the national ethanol conference in Orlando, Florida.

The proposal will be up for a public comment period and covers eight of the nine states' petitions, including Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin. North Dakota was the lone state that petitioned the agency and did not receive approval.

Ben Hengst, deputy director of EPA's Office of Transportation and Air Quality, told the ethanol industry audience the agency determined those states have provided enough information to support the move that would essentially put E10 and E15 on equal regulatory footing to allow permanent E15 sales in those states.

The Clean Air Act allows governors to notify EPA that they wish to reject the use of the 1-psi waiver for E10 in their states. This would result in the application of the same volatility limitation to both E15 and E10 -- essentially putting E10 and E15 on the same footing.

The administration still has not taken action to allow E15 sales for the upcoming 2023 driving season beginning in three months.

While ethanol industry officials hearing the announcement were pleased, Hengst then fielded a few pointed questions from the audience.

A couple of ethanol industry officials questioned why EPA delayed the proposal nearly 10 months.

Monte Shaw, executive director of the Iowa Renewable Fuels Association, asked Hengst why the agency didn't respond to the governors' petitions within the 90 days required by the Clean Air Act.

"The governor (Iowa Gov. Kim Reynolds) has worked very hard to get that request in on time so that the 90-day rule would still get plenty of time for implementation in 2023," Shaw said to Hengst.

"The science was clear. The law was clear. So, there is a lot of frustration. The question is I would just say please take back to your folks at EPA, that you know that the agency and White House missing the statutory deadline is penalizing thousands of retailers and millions of consumers, and they should not be the ones paying the price literally at the pump for the inability of an agency to meet the deadline."

Hengst said there were a number of reasons why the E15 proposal was delayed.

"I will say from our team's perspective, this is an area that EPA has never issued a rule," he said.

Because the agency is often taken to court, Hengst said the agency took its time on the legal, technical analysis.

Although EPA released a proposal addressing the states' petitions, E15 may not be available in the summer 2023 before the driving season launches in June.

Unless Congress or the EPA acts quickly in the coming weeks, Renewable Fuels Association President and CEO Geoff Cooper said during an address to the industry Wednesday, the Biden administration likely will have to issue an emergency waiver as it did last summer to allow E15 sales to continue in June through September.

"So, we'll have to start over in the new Congress," Cooper said. "And we expect legislation to be reintroduced very soon in both chambers. And we're going to need your help to get that across the finish line. But the bottom line is, if Congress and the administration failed to act before summer, consumers will lose access to the lowest-cost fuel at the pump right at a time when you're going to need it most.

"In fact, all signs are pointing to another fuel supply crunch and high gas prices this summer. And those are core for the same conditions that led the administration to issue emergency waivers last year. So, as we're talking today, on March 1, the outlook for E15 this summer remains a bit uncertain, but we're gonna keep pushing."

To that end, a bipartisan group of 17 senators sent a letter to President Joe Biden on Tuesday, pressing the administration to approve E15, https://www.thune.senate.gov/….

"Taking early action on E15 will send timely and necessary signals across the energy supply chain so that fuel producers and retailers will have the certainty they need to ensure affordable, reliable, and cleaner fuel options for American consumers throughout the year," the senators said in the letter. "Further, U.S. use of E15 will continue to displace Russian oil and finished gasoline products, ease domestic and global supply constraints, and lower net domestic fuel prices."

The letter was signed by Sens. John Thune, Richard Durbin, Tammy Baldwin, Sherrod Brown, Kevin Cramer, Tammy Duckworth, Joni Ernst, Deb Fischer, Chuck Grassley, Josh Hawley, Amy Klobuchar, Roger Marshall, Jerry Moran, Pete Ricketts, Mike Rounds, Tina Smith and Debbie Stabenow.

The Midwest governors petitioned the EPA last year, asking for a change in the Clean Air Act to allow their states to sell E15 year-round.

Growth Energy CEO Emily Skor said that while the EPA's proposal was long overdue, there needs to be a permanent fix.

"There's no denying that the simplest, best solution to unnecessary and outdated restrictions on year-round access to E15 is a permanent, federal legislative fix," Skor said in a statement.

"American families need the cost savings that E15 provides. Ethanol producers need a robust fuel market to reliably make new investments that create jobs and lower carbon emissions. American drivers have been able to purchase E15 every summer since 2019, and this summer should be no different."

The senators said in the letter to Biden that consumers need E15 this summer to combat what is expected to be higher gasoline prices as fuel demand increases.

"Preventing a disruption in consumer access to E15 through the summer of 2023 remains a straightforward, no-cost solution at your disposal to recommit our nation's broader response to the effect of Russia's actions and the war's collateral effect on fuel markets while advancing our domestic energy and environmental needs," the senators said in the letter.

Cooper said during his address that keeping year-round E15 in place has been like driving down many streets with dead ends.

That may be the case when it comes to E15 sales this upcoming summer.

"Unfortunately, today, unless the president or Congress acts quickly, the answer is no," Cooper said.

"We're getting closer to summer with each passing day. The administration is now saying the marketplace won't have time to implement these changes this summer."

The new E15 proposal, he said, "leaves us in a real bind" because of its effective 2024 date.

Cooper said federal lawmakers put forward proposals during the past year to secure E15 sales. Those measures even had the support of oil industry officials, only to see a handful of refining companies step in to stop them.

"If the Congress or the administration fail to act for this summer, consumers will lose more at the pump," Cooper said.

"As we're talking today, the outlook for E15 this summer looks a bit uncertain."

Read the EPA proposal here: https://www.epa.gov/….

Read more on DTN:

"Missouri Governor Asks EPA for Law Change to Allow Permanent Year-Round E15 Sales in State," https://www.dtnpf.com/…

"OMB Reviewing Nine States' E15 Requests," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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