The White House is poised to approve a request from a coalition of Midwest governors to permit year-round sales of gasoline blended with higher levels of ethanol, a move that could potentially reshape the fuel market dynamics. However, sources familiar with the discussions revealed that the implementation start date will be deferred until next year, a decision likely to evoke mixed reactions within the biofuel industry.
The delay, pushing the commencement to 2025, is seen as a strategic move that could avert any localized disruptions in fuel supply and associated price spikes, effectively deferring any significant impacts until after the U.S. presidential election later this year, the sources noted.
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According to insiders, the plan entails granting a 2022 plea from governors representing Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin to greenlight year-round sales of E15, gasoline blended with 15% ethanol, commencing in the following year. In the interim, the Environmental Protection Agency (EPA) might consider issuing temporary waivers to facilitate such sales, if necessary.
“With battleground states like Wisconsin and Minnesota in the mix for the upcoming election, the decision's timing carries political weight, especially considering the potential ramifications on inflation and the economy, which are focal points for President Joe Biden's re-election campaign,” remarked a political analyst closely monitoring the situation.
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E15 sales are currently curtailed during summer months due to concerns over smog, an issue the EPA has grappled with for years. While the administration gears up to unveil its decision by late March, the EPA remained tight-lipped, citing the ongoing interagency review process.
Addressing stakeholders at a conference, U.S. Agriculture Secretary Tom Vilsack expressed confidence in the eventual nationwide availability of expanded E15 sales by 2025, hinting at potential interim measures such as summer waivers to facilitate sales until then.
The decision's timeline adjustment comes after the EPA forwarded a final rule to the White House in December, originally slated to take effect on April 28, 2024. The revised schedule, as per sources, postpones the effective date to 2025.
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Despite persistent advocacy from the ethanol industry to lift E15 restrictions nationwide, opposition from oil refiners, including HF Sinclair Corp and Phillips 66, remains palpable. These refiners have raised concerns over the logistical complexities and supply chain risks associated with a piecemeal approval approach for E15 sales.
While ethanol groups express a preference for a comprehensive legislative solution enabling nationwide E15 sales, the regional approach advocated by the Midwest governors continues to stir debate, underscoring the ongoing tug-of-war between competing interests within the energy sector.
