President Biden acts on summer E15

Demand for gasoline has dropped in the last month as drivers have taken their foot off the accelerator and pump prices topped $4.33 a gallon.

This leaves alternatives like ethanol in a bind. Inventories of the home-grown fuel are at near-record highs with demand for bi-products remaining strong.

This week, the White House added a new factor to the equation.

Peter Tubbs reports.

President Joe Biden traveled to Iowa this week to announce a waiver to the ban on the sale of E15 in the summer, delivering a temporary peace in the battle over the higher ethanol blend.

President Joe Biden, D: “But the environmental protection agency is planning to issue an emergency waiver to allow E 15 gasoline that uses more ethanol from homegrown crops to be sold across the United States this summer in order to increase fuel supply. 

The waiver comes at a time of both high gasoline prices and an inflation rate that households haven’t seen in 40 years. Summertime sales of E15 is intended to give consumers a cheaper fuel option during the high travel season, but the industry hopes year round sales will give retailers reason to install more E15 pumps.

Geoff Cooper, Renewable Fuels Association: ”They've told us they're not interested in making that investment. So this, I, I think, sends the right signal to the retail sector to go ahead and make that investment in E 15 in the, that will have a modest bump, a modest impact on both ethanol demand and corn demand this summer”

Less than 2 percent of the fuel stations in the United States have an E15 pump, while 95 percent of the fuel sold nationally is E10. While E15 is often 10 cents cheaper than E10, its limited availability is expected to do little to lower gas prices as a whole.

Jordan Fife, Biourja Trading: “So it’s a big headline, that’s for sure, unfortunately, by my math, in my analysis, it’s not that big of a deal for ethanol. You can extrapolate that down to probably about 25 to 40 million additional gallons of ethanol demand, and that’s just not a huge number unfortunately. It’s a good political feather in the cap, but it’s not going to solve a lot.”

The added availability of E15 in the long term will mean higher ethanol demand in rural America, and a path to reduce the usage of foreign oil, which the White House argues is a national security liability.

President Joe Biden, D: “I'm not gonna wait to take action to help American families. I'm doing everything within my power by executive orders to bring down the price and address the Putin price spike. In fact, we've already made progress. Since March inflation data was collected your family budget, your ability to fill up your tank. None of it should hinge on whether a dictator declares war and commit to genocide in a half a world away.”

For Market to Market, I’m Peter Tubbs.