E15 Summer Ban Suspended, USDA Commits $700M To Biofuels Producers
On Tuesday, President Biden visited Menlo, Iowa, home to a POET ethanol production facility that produces 150 million gallons of ethanol annually. During his visit to the corn-rich state, Biden announced the suspension of a federal rule that prohibits the sale of E15 blended biofuels between June 1 and Sept. 25.
Numerous government officials and ag stakeholders have pushed the year-round sale of “homegrown” E15 — a blend common in the Midwest — to decrease soaring prices at the gas pump.
Ethanol as a Solution
Biden says ethanol facilities, such as the POET processor in Menlo, are needed "all over the Midwest." He says there are four main reasons America needs ethanol:
1. Supports farmers and the farm economy
2. Opens door to more jobs
3. Reduces reliance on foreign oil
4. Offers a choice at the pump
More than $100 million will be dedicated to "build a biofuel infrastructure of the future," according to Biden. He says this funding will pull America back from leaning on reserves and allies for oil, opening a door for energy independence.
"This is an industry with a tremendous future. With biofuels you get less harm to the environment, lower greenhouse gas emissions and you even get byproducts like grain," he says. "We can't reach our goal of net zero emissions by 2050 without it."
Biofuels Industry Responds
Monte Shaw, Iowa Renewable Fuels Association executive director, applauds President Biden’s decision, saying “summer sales this year could account for about 250 million gallons of E15. But the impact goes far beyond summer sales in 2022. This means retailers aren’t forced to abandon E15.”
Growth Energy’s senior vice president of regularly affairs Chris Billey shared in an AgriTalk episode Monday that if the administration doesn’t approve year-round E15, 90% of America’s fuel retailers would be unable to sell E15 in the summer months due to restrictions.
“In some cases, ethanol has decreased pump prices 50¢ to 60¢ less per gallon,” he says. “That type of product shouldn’t be taken off the market, particularly during the summer driving season when demand is at its highest.”
On Tuesday, AAA’s national gas average was $4.09, down 7¢ from last Wednesday.
Why Ethanol?
Data collected from EPA and USDA was analyzed by Growth Energy in 2020, showing that E15 could cut climate emissions by 180,000 metric tons in Iowa, the equivalent of removing almost 40,000 vehicles off the road across the state.
“Based on our analysis, we estimate that if the United States transitioned from E10 to E15 in the nation for 2001 and later model year vehicles, GHG emissions would be lower by 17.62 million tons per year, which is the equivalent of removing approximately 3.85 million vehicles from the road,” wrote Growth Energy researchers.
As part of the Pandemic Assistance for Producers, the White House says USDA will provide up to $700 million in funding through a Biofuel Producer Program to support agricultural producers that rely on biofuels producers to maintain a “viable and significant” market for agricultural products.
According to the White House, producers can expect awards before the end of April 2022.
The Relationship Between Ethanol and Smog
Recent reports claim ethanol is generally prohibited during the summer months due to smog. In an interview with AgriTalk Host Chip Flory on Tuesday, Dr. Andy Randolph, technical director at Earnhardt Children’s Racing says this couldn’t be further from the truth.
When Congress passed the Clean Air Act 30 years ago, the measure of blended ethanol intended under the bill was E10, as the biofuels industry had not dreamed of a fuel blend higher, like E15.
Randolph says during hot summer months, lower blended fuels with a vapor pressure like E10 will have a higher tendency to vaporize compared to a higher blend. He says the lack of knowledge in higher blends like E15 has created a gap that opened the door to misinformation about smog.
“The truth is E15 has less smog potential and less volatility than E10,” he says. “The only ethanol blends we should be wary of is E30 or above because the vapor pressure of ethanol-gasoline blends then becomes less than the vapor pressure of straight gasoline.”
Ethanol blends over E30 are the only blends we should steer clear of, according to Randolph. He says those higher blends could cause your car not to start in winter because your vapor pressure is extremely low.
More on ethanol:
> What Is the Ethanol Sweet Spot? Up The “E”
> U.S. Ethanol Exports Climb To 143.1M Gallons, Up 41% from Feb. 2021
> Carbon Pipeline to Improve Ethanol Plant and Ag Profitability, Developer Says
