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Rick Worthington E15 Ethanol Announcement
by Rick Worthington, click here for bio

Program: Farm and Ranch Report
Date: June 11, 2019

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E15 Ethanol Announcement

Oil industry foes are preparing to go to court to fight the Environmental Protection Agency regulation issued Friday that allows year-round sales of higher-ethanol E15 gasoline nationwide.

The agency’s final rule offers ethanol producers and corn farmers the promise of greater market access and demand -- but the coming legal battle will be the true test of that potential.

The EPA rule waives E15 gasoline containing 15% ethanol from vapor pressure requirements that have blocked sales from June 1 to September 15 in areas where smog is a problem, said Bill Wehrum, the assistant administrator for the EPA Office of Air and Radiation. That should cause “a bump” in sales at the roughly 1,200 filling stations that already sell E15 today, while encouraging more of them to offer it, Wehrum told reporters on a conference call.

“Over time, we believe and the industry believes you will see more E15 sold as the infrastructure in the gasoline distribution system and especially at gas stations catches up to the availability of this fuel,” Wehrum said. This is going to result in a “substantial increase” in E15 sales, he said.

At Trump’s direction, the EPA bundled the E15 shift with modest changes meant to boost transparency and prevent price manipulation in the trading of credits used by refiners to prove compliance with annual biofuel blending quotas. Large integrated oil companies, including ExxonMobil Corp., BP America Inc. and Chevron Corp., had argued against the EPA’s initial proposal of more aggressive trading limitations.

Wehrum said the agency would continue examining allegations of market manipulation and respond to them if needed. “We’re applying the theory of first do no harm,” he said, noting that proposed position limits and sale requirements “could reduce the flexibility of the market and the efficiency of the market.” While the agency takes the issue seriously, he said, the EPA has not yet found clear evidence of significant manipulation.

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