A newly introduced bill in the US Senate that would permanently expand the summer availability of 15% ethanol blended gasoline appears to have the backing of the country’s largest trade association for the oil and natural gas industry.
Those industries have historically opposed expanding E15 sales, but U.S. Senator Chuck Grassley, an Iowa Republican, said the unprecedented support could come from new investments in biofuels by oil companies and a push by Midwest governors for Federal fuel waivers, which could result in a patchwork of differing fuel regulations between states.
“It’s something even the oil industry is getting on board now,” Grassley told reporters on Wednesday. “It’s quite a shock to me that they would join efforts to sell more ethanol.”
The American Petroleum Institute co-signed a letter to senior members of Congress last week to support summer E15 sales. API joined other trade organizations representing farmers, convenience stores, truck stops and others to champion the fuel.
“Our groups have come together – for the first time ever – to support legislation that would solve this problem once and for all,” the letter said.
Ethanol is an important market for corn, with more than half of the country’s crop going into its production.
It’s about a waiver on fuel volatility, which has long been granted for 10% ethanol blends but not for 15%. The fuel blends have an increased risk of evaporating and polluting the atmosphere in warmer months.
In 2019, the US Environmental Protection Agency made a rule change that granted the waiver of E15. In 2021, a federal appeals court found that the agency does not have the authority to grant such a waiver.
Several Midwestern senators, including Grassley and Joni Ernst, also an Iowa Republican, later supported a bill in 2021 that would have codified the waiver of E15 into federal law, but did not muster enough support to warrant a hearing, according to Senate records of the committee to obtain .
In April 2022, President Joe Biden said the EPA would allow E15 sales for the summer to lower fuel prices. Also that month, Gov. Kim Reynolds and seven other governors filed with the EPA for state waivers that would allow summer E15 sales indefinitely. These applications are still pending.
In May 2022, Reynolds signed new state law requiring most gas stations to sell E15 instead of E10. Smaller gas stations are generally excluded from this.
On Wednesday, Grassley and Ernst co-sponsored the Consumer and Fuel Retailer Choice Act of 2022, which would expand E15 waivers to all states.
“This is exciting news and I encourage it to be taken quickly through Congress so it can be signed into law,” Gov. Reynolds said.
It’s unclear when the Senate will take action on the bill.
“Iowa farmers and consumers deserve reassurance,” Grassley said.
He didn’t specify what oil company investments in biofuels might have fueled the bill’s API support, but Continental Resources and the Oklahoma oil and gas company said they plan to contribute $250 million to Summit Carbon Solution’s proposed carbon dioxide pipeline to be connected to ethanol plants in Iowa and neighboring states.