WASHINGTON — President Donald Trump on Oct. 9 told a cheering crowd in Council Bluffs, Iowa, that his administration was “protecting ethanol” in seeking to lift a summer ban on the sales of E15 gasoline — fuel containing 15% ethanol instead of the year-round industry standard 10% blend.
The announcement set the regulatory steps in motion to allow year-round sales of E15, as well as restructuring the sometimes-volatile trading of biofuel credits known as RINs. Those steps include the lengthy process of drafting and finalizing a rule to extend the Reid vapor pressure waiver for gasoline blends beyond E10 by the Environmental Protection Agency, which administers ethanol policy. That process isn’t expected to be completed until the spring of 2019.
The sale of E15 from June 1 to Sept. 15 is restricted in many parts of the country by the E.P.A. because of concern about smog from evaporation during summer months. As a result, retailers have resisted switching fuels twice a year, resulting in only about 1,400 E15 pumps nationwide. The E.P.A. in 2012 approved the use of E15 gasoline for all vehicles manufactured in 2001 and later.
“Expanding the sale of E15 year-round is sound policy for a variety of reasons,” said U.S. Secretary of Agriculture Sonny Perdue. “Consumers will have more choices when they fill up at the pump, including environmentally friendly fuel with decreased emissions. It is also an excellent way to use our high corn productivity and improved yields. Year-round sale of E15 will increase demand for corn, which is obviously good for growers. This has been a years-long fight and is another victory for our farm and rural economies. I look forward to working with the E.P.A. to see rulemaking and year-round E15 completed by the driving season of 2019.”
Lynn Chrisp, president of the National Corn Growers Association (N.C.G.A.), praised the announcement and thanked Mr. Trump for “following through on his commitment to America’s farmers.” The N.C.G.A suggested consumers could save 3c to 10c per gallon because ethanol is cheaper than gasoline.
“With 9 out of 10 vehicles on the road today approved to use E15, consumers should have this lower-cost option year-round,” Mr. Chrisp said. “N.C.G.A. will be taking an active role in the regulatory process, urging the E.P.A. to move forward with making the president’s commitment a reality by next summer.”
The Renewable Fuels Association (R.F.A.) also applauded the president’s decision to begin the formal rulemaking process to allow year-round sales of E15.
“Securing fair market access for E15 and other higher blends has been our top regulatory priority for several years, and we are pleased that the first official step in this process is being taken,” said Geoff Cooper, president and chief executive officer of the R.F.A. “This is the right signal to the marketplace at just the right time, as both farmers and renewable fuel producers desperately need new market opportunities and sources of demand.”
But not everyone was happy, and market watchers in general expect there will be a lawsuit seeking to block the year-round sale of E15 gasoline once it is approved by the E.P.A.
The American Petroleum Institute (A.P.I.), which represents all facets of the natural gas and crude oil industry, said the decision was a “bad deal” for consumers.
“Putting a fuel into the marketplace that the vast majority of cars on the road were not designed to use is not in the best interest of consumers,” said Mike Sommers, president and c.e.o. of the A.P.I. “Vehicle compatibility tests have shown that high ethanol levels in gasoline can damage engines and fuel systems.”
The A.P.I. said three out of four vehicles on U.S. roads today weren’t built to use E15 gasoline, and that some automakers have indicated the use of E15 could potentially void vehicle warranties. The A.P.I. added that E15 wasn’t compatible with motorcycles, boats, lawn equipment or all-terrain vehicles.
The U.S.D.A. in September forecast the use of corn to produce ethanol in the 2018-19 marketing year, which began Sept. 1, at 5,650 million bus, equal to 38% of forecast 2018 U.S. corn production of 14,827 million bus. Some industry estimates indicate year-round use of E15 could use an additional 2,000 million bus of corn.
Despite the potential boon to the ethanol industry and the increased demand for corn longer term, Chicago corn futures traded slightly lower both Oct. 9 and 10 as the news was overshadowed by nearby concerns about U.S.D.A. supply-and-demand and crop production reports on Oct. 11 and ongoing trade issues.
The president’s E15 announcement also was seen as politically beneficial in major corn producing states, where in some cases Republican candidates were in tight races against Democrat opponents, who Mr. Trump said would “end ethanol” if they could.