Biden Announces EPA Approval for Blended Biofuels to Cut Summer Gas Prices

Mandatory Credit: Photo by Shutterstock (12890762e)United States President Joe Biden meets virtually with Prime Minister Narendra Modi of India at the White House in Washington, DC,.
Shutterstock / Shutterstock

President Joe Biden, speaking at the POET Bioprocessing, in Menlo, Iowa on April 12, announced new policies to “address the pain Americans are feeling at the pump as a result of Putin’s Price Hike,” by increasing fuel supplies, offering more consumer choices and reducing gasoline prices for Americans, according to a White House fact sheet April 12.

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This comes on the heels of the March Consumer Price Index, released April 12, which revealed inflation at 8.5% and the gasoline index rising a staggering 18.3% in March — the highest level prices have been in decades as seen in the chart below.

Biden announced that the Environmental Protection Agency (EPA) will allow E15 gasoline–gasoline that uses a 15% ethanol blend–to be sold this summer. Without EPA approval the blend cannot be used from June 1 through September 15 in most of the country.

“E15 is currently offered at 2,300 gas stations in the country, where it can serve as an important — and more affordable — source of fuel,” according to the White House fact sheet.  

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Biden said that “it’s not going to solve all our problems, but it’s going to help some people. And I’m committed to doing whatever I can to help.  Even if it’s an extra buck or two in the pockets when they fill up, it’ll make a difference in people’s lives,” according to the transcript of his remarks. 

“And even though E15 is only available in a few thousand pumps today, we’re investing more than $100 million to build biofuel infrastructure of the future — things like blend pump — blender pumps, the gas pumps that can handle higher blends of bio-ethanol and diesel fuel,” he added. 

In addition, the administration announced further steps to enable energy independence by boosting homegrown biofuels. These steps include $700 Million for biofuels producers through a new Biofuel Producer Program; $5.6 million for infrastructure for renewable fuels through the Higher Blends Infrastructure Incentive Program: $100 million for biofuels infrastructure.

The White House also announced new actions to support sustainable aviation with a focus on low-carbon fuels that will create economic opportunities for agricultural communities, including new and ongoing funding opportunities to support sustainable aviation fuel projects and fuel producers totaling up to $4.3 billion.

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Finally, the EPA also announced efforts to expand supply and choices for other forms of fuel, such as using canola oil to produce renewable diesel and jet fuel.

“This action demonstrates EPA’s commitment to approving new petitions for renewable fuels that can provide greenhouse gas benefits as well as reduce reliance on petroleum fuels,” reads the fact sheet.  

Lawmakers have been pushing for the use of biofuels, including Senators Chuck Grassley (R-Iowa) and Joni Ernst (R-Iowa), who announced a new bill — the Home Front Energy Independence Act in March. The bill puts the ban on Russian oil into law and at the same time, it couples that ban with opening up biofuel production that’s grown in Iowa and across America’s heartland, according to a press release.

The current excess ethanol capacity domestically is nearly the same as the amount of Russian gas the U.S. had been importing: roughly 83 million barrels versus 87 million barrels.

“When traveling around Iowa, you see E-15 being sold for $0.30 to $0.40 cheaper than E-10 — and ethanol has been selling at around a $1.20 discount to base gasoline. Homegrown Iowa biofuels provide a quick and clean solution for lowering prices at the pump, and bolstering production would help us become energy independent once again. Iowa producers stand ready to meet the moment and ramp up production to lower gas prices for families across the country,” Grassley wrote in the release.

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Pavel Molchanov, an energy analyst with Raymond James, pegged the savings at about $0.05 per gallon. “Not much, but every little bit helps,” he said, according to the Washington Post reported.

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The Washington Post added that the decision also carries some environmental and health risks as the original summertime ban on the sale of high-ethanol fuel was put in place over concerns that burning ethanol-rich fuel in the heat would make smog worse.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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