US senators seek to expand sales of ethanol-gas blend with support from Big Oil

By Stephanie Kelly

(Reuters) – U.S. senators reintroduced a bipartisan bill on Tuesday that would allow nationwide sales of gasoline with a higher blend of ethanol year-round, as a second heavy-weight oil trade group appeared ready to back the idea.

Republican Senator Deb Fischer from Nebraska and Democratic Senator Amy Klobuchar from Minnesota – both major corn-producing states – argue that the expanded sales of E15, or fuel containing 15% ethanol, would decrease gasoline prices and reduce U.S. dependence on foreign oil. Year-round sales of E15 have been long sought by the biofuel industry and corn farmers, who would benefit from the increased market.

The American Petroleum Institute (API), one of the largest U.S. oil trade groups, has supported the bill since it was introduced last autumn. It began cooperating with the Renewable Fuels Association, a biofuels trade group, on expanded nationwide E15 sales after governors from major corn-producing Midwestern states requested the U.S. Environmental Protection Agency (EPA) lift restrictions on E15 in their states, Reuters previously reported. The governors’ effort raised oil industry concerns that the proposal would create a patchwork of different fuel regulations and logistical challenges around distribution.

On Tuesday, another top U.S. oil group, the American Fuel and Petrochemical Manufacturers (AFPM), signaled it could support a national standard.

AFPM said that while the bill needed work, a legislative approach was less disruptive than creating patchwork requirements for new fuel blends.

AFPM did not take a position on the bill last autumn.

The governors’ proposal is gaining headway. In response to their request, the EPA in early March proposed to allow year-round E15 sales in those states. That rulemaking would take effect in the summer of 2024 and still needs public comment.

The EPA restricts summertime sales of E15 over concerns that it contributes to smog in hot weather, though research shows the higher percentage blend may not increase smog relative to the 10% blend called E10 that is sold year-round.