President Trump’s commitment to America’s energy revolution is evidenced by the fact that the United States continues to lead the world in oil and natural gas production and crude oil refining. However, the president’s recent decision to direct the Environmental Protection Agency to allow the year-round sale of E15 gasoline (that is, 15 percent ethanol) runs directly counter to his stated goal of energy dominance. It will put a damper on our energy progress while also threatening to increase costs to the American consumer.
The opposition to Trump’s election-season decision to waive Clean Air Act restrictions on year-round E15 sales is not solely driven by U.S. consumer rejection of higher ethanol blends, as shown in public surveys. The opposition is rooted in the fact that first, allowing year-round E15 sales is simply the wrong public policy. And second, the action is contrary to the law. That is why opinion pages as diverse as the Wall Street Journal and the Washington Post oppose the administration’s decision. It is also why a bipartisan group of 20 senators wrote to President Trump urging him to step back from this ill-advised policy, and why economists, energy analysts, and a broad range of industry and environmental groups have come out in strong opposition to this E15 waiver decision.
Why do we argue that the E15 decision is the wrong policy? Multiple industries have long warned about the risks of E15. Vehicle compatibility tests have shown that this fuel can damage engines and fuel systems, potentially leaving consumers on the hook for expensive repair bills. Nearly three out of every four vehicles on the road today are not designed for E15 gasoline use, including some 2018 model year cars and SUVs, and a number of automakers have even warned that using E15 in vehicles not designed for it could potentially void car warranties.
And these issues are not limited to just cars. Consumer groups warn that E15 is incompatible with lawnmowers, motorcycles, all-terrain vehicles and boats. The boating and small power equipment associations (Look Before You Pump) are very concerned about consumers misfueling their engines with E15.
As for more affordable energy, the math doesn’t add up for higher ethanol blends. Ethanol has a lower energy content than gasoline, forcing drivers to fill up more often when using these blends. On top of that, the Congressional Budget Office projects gasoline prices could rise substantially unless the Renewable Fuel Standard mandate’s market-distorting impacts are reined in.
This anti-consumer policy does not make sense. It makes even less sense when you factor in the vast collateral damage unleashed by the current ethanol mandate. Environmental organizations, anti-hunger groups, wildlife protection activists, grocers, restaurant owners, and producers of poultry, pork, and beef have all spoken out against the ethanol mandate. Their concerns range from environmental and habitat protection to increased food prices and elevated costs for farmers and ranchers.
In reaching this decision on E15, the administration is also wrong on the law. President Trump’s decision to allow for year-round sales of E15 is contrary to the clear letter of the law, as the waiver is explicitly disallowed under the Clean Air Act. Even the EPA has agreed in the past that the agency does not have the authority to waive the vapor pressure requirements that would allow year-round sales of E15.
As the Wall Street Journal opinion page put it, “EPA said in 2011 that it doesn’t believe it has the authority to allow year-round sales of E15, and that is not remembered as an era or agency restraint.” No matter how many times acting Administrator Andrew Wheeler claims authority to make this decision, it does not change the fact that Wheeler’s assertion directly conflicts with the clear language of section 211(h) of the Clean Air Act. In fact, he stated in recent congressional testimony that “there are certainly people who believe we don’t have that authority. The legislation that this committee considered last year would have been very clear in giving EPA that authority, but we are looking at that issue.”
We urge the EPA to keep looking.
The refining industry stands united with a broad range of industry, consumer, and environmental groups in opposing this policy. We will do everything we can to protect consumers by challenging this policy to ensure it is not enacted. At the same time, we will continue to seek real, lasting, bipartisan reforms to the broken Renewable Fuel Standard to prevent future damage to America’s energy security.
Frank Macchiarola is vice president of downstream and industry operations for the American Petroleum Institute.
