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EPA Proposal Would End Summer Ban on Ethanol Motor Fuel — With the Midterms Just a Month Away

Some corn state Republicans facing tough re-election bids

The Environmental Protection Agency will propose an end to the summer ban on motor fuel made with ethanol according to a senior White House official. (Bill Clark/CQ Roll Call file photo)
The Environmental Protection Agency will propose an end to the summer ban on motor fuel made with ethanol according to a senior White House official. (Bill Clark/CQ Roll Call file photo)

The EPA will propose to end the summer ban on the sale of motor fuel made with 15 percent ethanol, according to a senior White House official.

The move is sure to please corn state lawmakers such as Iowa Republican Sens. Charles E. Grassley and Joni Ernst, who have spent the better part of the last year and a half pushing the Trump administration to do more to enforce requirements under the so-called Renewable Fuel Standard — a federal mandate to boost renewable fuels like ethanol in the nation’s gasoline mix.

The announcement also comes a month before the midterm elections, in which many Iowa and other corn state House Republicans face uphill re-election campaigns in states directly affected by the Trump administration’s tariff battles. Most notably, Rep. Rod Blum, R-Iowa, and Rep. David Young, R-Iowa, are among the most vulnerable members whose seats are at risk of flipping to Democratic control.

President Donald Trump is scheduled to visit Iowa on Tuesday for a campaign rally in the western part of the state.

“The president has repeatedly stated his support” for the Renewable Fuel Standard program, the White House officials told reporters in a Monday briefing. “He has said he thinks it is good to have domestically produced energy here. He thinks that this action will be good for the agriculture industry as well as the economy overall.”

The official did not say when the EPA will publish the proposed rule, but added that the administration aims to finalize the plan before the 2019 summer driving season. The official said the administration is not proposing funding for blender pumps, which allow drivers to select ethanol gasoline mixtures as high as 85 percent ethanol to 15 percent gasoline.

The proposed change, if finalized, would boost sales of so-called E15 fuel, a continuing goal of lobbyists representing corn farmers and ethanol refiners. The EPA has barred the sale of E15 between June 1 and Sept. 15 because it has been found to contribute to increased summer smog. Fuel with 90 percent gasoline and 10 percent ethanol is the limit during that time.

The American Petroleum Institute, which represents 600 oil groups, has in the past blasted the idea of yearlong sales of E15 and higher ethanol-gasoline blends as government interference in the marketplace. Those concerns were raised by 20 senators in a bipartisan letter to the White House last week.

“A one-sided approach to addressing concerns related to the Renewable Fuel Standard (RFS) that favors only one industry stakeholder is misguided,” wrote the group, led by Sen. Bill Cassidy, R-La. “We are concerned that doing so would do nothing to address the policies impacting refinery jobs, could hurt millions of consumers whose vehicles and equipment are not compatible with higher ethanol blended gasoline, and risk worsening air quality.”

The Monday announcement came amid reports that President Donald Trump, who considers farmers and agribusiness a core part of the voting base that helped him win the White House, planned to address E15 and price volatility in the biofuel energy credit market.

Lawmakers also are poised to wade into the complicated EPA-managed standard for biofuel use. House Energy and Commerce Committee Republicans have said they plan to release draft bill text when the chamber returns after the midterm elections.

In the background briefing, the official said EPA also will propose a rule to provide more transparency in how biofuel energy credits called Renewable Identification Numbers (RINs) are traded. Crude oil refiners and fuel importers have complained about sometimes sharply fluctuating RIN prices and raised concerns that prices were being manipulated. Sen Ted Cruz, R-Texas, has been critical of uncapped RIN trading, a form of “speculation,” according to the oil state Republican.

Refiners and crude oil importers use the RINs to prove they are in compliance with the Renewable Fuel Standard. The identification numbers represent each gallon of biofuel blended into the U.S. transportation fuel supply. Refiners and oil importers either generate RINs when they blend biofuels into motor fuel or they can buy so-called separated RINs to submit to the EPA to show compliance with the mandate.

The White House official said the RIN proposals are geared to smaller refiners and importers that are more likely than larger fuel companies to buy biofuel credits to comply with the standard.

The senior official said the proposed biofuel energy credit rule would offer several options for public comment to “stabilize the RIN market by taking actions to limit manipulation and provide for additional transparency.”

The official said potential solutions could include limiting purchases of separated RINs to crude oil refiners and importers, require disclosure of RIN holdings that exceed certain levels, limit the time that RIN buyers who are not refiners or importers can hold the energy credits and require more frequent monitoring of the RIN market by requiring quarterly reporting or other oversight.

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