USA extends use of E15 to counter oil shocks
Faced with global conflicts and OPEC+ production cuts, the EPA is authorizing E15 this summer to stabilize fuel prices.
| Sectors | Oil, Alternative Fuels, Fuels, Ethanol |
|---|---|
| Themes | Policy & Geopolitics |
| Countries | United States |
The U.S. Environmental Protection Agency (EPA) has confirmed that E15, a gasoline blend enriched with 15% ethanol, will be authorized for sale from June 1 to September 15, 2024. This decision extends the Reid vapor pressure waiver that already applied to E10, using the authority of the Clean Air Act to circumvent anti-smog regulations during hot periods.
Reasons for derogation and anticipated benefits
According to the EPA, the sale of E15 during the summer season will help protect Americans from price shocks by increasing supply and reducing dependence on imported fuel. Michael Regan, EPA Administrator, pointed out that this measure also supports American farmers, strengthens national energy security and offers relief to drivers across the country.
Economic context and history of derogations
The previous derogations granted in 2022 and 2023 followed Russia’s invasion of Ukraine, and were aimed at maximizing the availability of domestic fuels in response to market instability. Current tensions in the Middle East, including the conflict in Gaza and the Houthis’ disturbances in the Red Sea, continue to justify this measure. Platts-assessed USGC Unl 87 was 250.62 cents/gallon on April 18, 2024, down from peaks in 2022.
Implications and future projections
The EPA’s action follows confirmation from the Biden administration earlier this year that E15 could definitely be available in eight Midwestern states from summer 2025. Brian Jennings of the American Coalition for Ethanol reiterated the importance of higher ethanol blends for energy security and climate and environmental benefits.
The EPA’s decision was backed by a significant mobilization of various players, including a bipartisan group of 46 lawmakers led by Senator John Thune and Senator Dick Durbin, who urged the administration to grant the waiver. Meanwhile, bioenergy groups continue to advocate a long-term legislative solution, such as the Nationwide Consumer and Fuel Retailer Choice Act proposed by Senator Deb Fischer, which has yet to make headway in the Senate.
