Trump Wants Year-Round E15 Sales

November 5, 2018 03:19 PM
 
Congress might have to be involved to get the ban on summertime use lifted

U.S. consumers might soon have the opportunity to purchase gasoline with a higher ethanol blend year-round. In October, President Donald Trump announced he wants gasoline with 15% ethanol, typically referred to as E15, to be available 12 months of the year.

“I want more [use] because I don’t like $74,” Trump said at a White House meeting, noting the price at the time for a barrel of crude oil. “That’s what I want. I want low prices.”

Trump has instructed Andrew Wheeler, EPA acting administrator, to initiate the process of lifting the summertime ban on the sale of E15. Sales are currently halted between June and the middle of September. Opponents of E15 say the higher level of ethanol in it contributes to smog during hot summer days.

Trade groups and USDA Secretary Sonny Perdue were quick to support Trump’s announcement.

“Year-round sale of E15 will increase demand for corn, which is obviously good for growers,” Perdue says in a news release. “This has been a years-long fight and is a victory for our farm and rural economies.”

Year-round sales could save users between 3¢ and 10¢ per gallon because ethanol is cheaper than gasoline, notes the National Corn Growers Association (NCGA).

“With nine out of 10 vehicles on the road today approved to use E15, consumers should have this lower-cost option year-round,” says Lynn Chrisp, NCGA president.

E15 is approved for use in 2001 and newer model cars, light-trucks and medium-duty vehicles, which account for 82% of the vehicle miles traveled in the U.S.

However, one economist isn’t sure year-round sales of E15 will help work through the massive corn stocks on hand or even the increase in corn acres expected for 2019.

“I don’t think it will help the balance sheet this year,” says Scott Irwin, an economist at the University of Illinois. “And I’m confident not for next year.”

In its October World Agricultural Supply and Demand Estimates report, USDA forecast the use of corn for ethanol in 2018/19 will reach 5.65 billion bushels of the 14.83 billion bushels projected for the total U.S. corn harvest this year.

If E15 is allowed to be sold year-round, David Hudak, general manager of POET Biorefining, says sales of the product will surge.

“Once [more] retailers come onboard, and then we get thousands [more] stations, then you’ll see the product fly,” he said on “AgDay” TV. 

Currently, only 1,300 gas stations in 28 states sell E15.

The oil industry is expected to challenge any decision by EPA to waive the summertime ban on E15, saying Congress will have to be involved to determine whether E15 can be sold year-round. Mike Sommers, American Petroleum Institute president, says the industry would fight such a decision in the courts using “all available legal remedies.”

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