The Environmental Protection Agency rolled out a plan to allow more ethanol in the nation’s gasoline supply Tuesday, after a long wait that had Cabinet officials sparring over the timing of the plan.
“Consistent with President Trump’s direction, EPA is working to propose and finalize these changes by the summer driving season,” said EPA Administrator Andrew Wheeler.
The proposed regulations would allow 15-percent ethanol fuels to be sold year-round, including in the summer. The high-ethanol fuel is currently banned by the EPA for sale during the summer driving season, which begins June 1, because of its high fuel volatility rating, which can hurt engine performance and can contribute to smog, especially during summer.
Trump promised the rule change last year to Iowa farmers and corn ethanol producers as part of a grand bargain with oil refiners. The deal is meant to resolve problems with the nation’s Renewable Fuel Standard program, requiring ethanol and other biofuels to be blended at increasing amounts each year.
Wheeler wants to gather feedback swiftly on the rule to get it into effect by Memorial Day. He said he will hold a public hearing at the end of the month to begin the process.
The proposed action announced on Tuesday would also help reduce the cost for refiners in complying with the EPA’s renewable fuel program, which costs individual refiners hundreds of millions of dollars annually to meet the requirements to blend ethanol in the nation’s gasoline supply.
The EPA’s proposed action will modify how the credits that refiners must use to meet EPA ethanol targets are bought and sold in order to deter price manipulation.
Ethanol credit prices have experienced major fluctuations in recent years from pennies to more than a dollar in a short period of time, leading to refiners paying more each year to buy ethanol to comply with the Renewable Fuel Standard.
Sen. Joni Ernst, R-Iowa, said she was pleased with the ethanol proposal but would be taking a closer look at the ethanol credit part of the EPA proposed rule.
“It’s imperative that EPA creates more transparency in the [ethanol credit] market and, in addition, takes a long, hard look at how they grant small refinery waivers,” Ernst said in a statement. The Republican has been a top critic of former EPA Administrator Scott Pruitt’s misuse of renewable fuel waiver authority to allow dozens of refiners not to blend ethanol.
“I hope we’re passed the days of former Administrator Pruitt’s gross mishandling of the [Renewable Fuel Standard] and waiver process,” Ernst said.
Wheeler has indicated that he would not be granting such broad exclusions for the refinery industry, and would be keeping with the law in implementing the renewable fuel program.
Agriculture Secretary Sonny Perdue and Wheeler sparred over the timing of the rule last month, after Perdue told lawmakers on Capitol Hill that the president’s ethanol plan would be delayed.
Wheeler later told state officials to ignore Perdue’s comments, saying in a formal statement that the EPA would issue the rule in March.
Ethanol industry officials had said if the plan was not formally proposed by the end of February, the EPA would have a tough time putting it into effect by the June 1 deadline.
