WASHINGTON – President Joe Biden on Tuesday announced another step to try to lower prices for drivers who have paid more to fill their tanks: expanding the availability of biofuels.
While visiting an ethanol plant in Iowa, Biden said the administration plans to sell E15 – gasoline that uses a 15% ethanol mix – over the summer.
“You’ll be able to fill up with E15,” said Biden, speaking in a large shed in front of an American flag flanked by trekkers. “It will not solve all our problems. But I will help some people.”
The E15 can cost an average of 10 cents per gallon less at the 2,300 service stations where it is sold, according to the White House.
There are about 145,000 gas stations around the country.
Tom Kloza, global head of energy analysis for OPIS, said allowing E15 to sell this summer is a good political move by the administration that will help some people save money, even if cars that use the mixture get what fewer gas kilometers.
Overall, however, the E15 is just a “bit player” in the fuel distribution system, Kloza said. The mixture did not appeal to the public, as drivers are often confused about whether the E15 is a good choice for their car.
“When I looked at a toolbox, it’s not a hammer. It’s kind of a small screwdriver, or maybe a piece of emery board or whatever,” Kloza said of Biden’s efforts to increase fuel supplies. “But I understand the reason for that.”
Regular gas averages about $ 4.11 per gallon compared to $ 2.86 a year ago, according to AAA, and Biden is under political pressure to see that he is doing what he can to reduce the price pain at the pump.
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Its announcement comes the same day the Labor Department said consumer prices jumped 8.5% since last March, the fastest pace since December 1981. Inflation has now notched new 40-year highs for five straight months.
Gasoline prices, which jumped 18.1% from March 2021 to March 2022, were the main reason for the inflation peak.
Inflation is expected to “moderate” by the end of the year, White House Press Secretary Jen Psaki told reporters who traveled to Iowa with Biden on Tuesday.
“But we will not wait for that,” she said, citing Biden’s announcement as an example of steps the administration is taking to help consumers.
Biden previously announced that the US would try to stimulate oil production and attract strategic reserves to reduce gas prices, which jumped after Russia invaded Ukraine, resulting in a ban on Russian oil imports.
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Democrats have described the increase as “Putin’s price increase,” while Republicans accuse Biden of doing more to increase domestic oil production.
The Iowa Republican Party greeted Biden with a billboard accused him for high gas prices.
“Joe did that,” the ad says.
Tom Seng, an energy expert at the University of Tulsa, called increasing ethanol use a short-term solution. It will also increase the cost of corn and other grains used to make ethanol, he said.
Biofuels are limited, but the EPA can grant exemption
Administration officials said the action announced by Biden on Tuesday will increase the use of self-grown biofuels, and reduce dependence on foreign fuels.
While almost all gasoline in the US contains 10% ethanol, access to E15 is restricted annually in some states from June 1 to September. 15 because it is believed to contribute to smog in warmer weather.
The EPA has determined that lifting that restriction is unlikely to have a major environmental impact, as most gas stations that sell E15 are not in areas with air quality issues, according to the White House.
The EPA is not expected to act until closer to June, when it will determine if a nationwide fuel supply still exists. The agency can grant exemptions in steps of 20 days.
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Under President Donald Trump, the EPA granted E15 an all-year exemption through use in 2019. But last year, the U.S. Court of Appeals for the District of Columbia Circuit overturned the rule, saying the agency had exceeded its authority. The Supreme Court of the United States in January refused to hear a challenge to the ruling.
Asked why Biden’s actions do not run into the same problem, senior administration officials said – without going into detail – that Biden’s approach is different.
In addition to tackling energy prices, Biden’s Iowa trip is part of the spotlight the administration is shining on rural communities this month. Cabinet secretaries and other administration officials travel to dozens of communities to find out what Biden is doing for rural areas.
“Investments are being made to reflect the value and importance of rural areas and people,” said Secretary of Agriculture Tom Vilsack, the former governor of Iowa, Monday.
Iowa is the nation’s top producer of sustainable fuel and the corn used to make it.
Elected officials, both Republicans and Democrats, from Iowa and other corn belt states, such as farm groups and biofuel producers, have pressured Biden to use its emergency force to allow summer use of E15.
A Harvard study last year showed that ethanol use and production emit up to 46% less greenhouse gases than gasoline. A University of Wisconsin study has challenged this finding, saying that ethanol is worse for the environment than gasoline, based on changes in how land is used to grow the corn used to produce it. But the Argonne National Laboratory disagreed with the Wisconsin study last month, saying the group overestimated carbon emissions from soil and doubled emissions, among other concerns.
Contribution: Paul Davidson