Oil trade group calls for national ethanol policy in the US after EPA approves Midwest expansion

The American Petroleum Institute, a trade group, pushed for a national policy on gasoline blends with higher ethanol levels on Monday after President Donald Trump’s administration announced on Friday that it would expand sales of this product in certain Midwestern States.

The U.S. Environmental Protection Agency announced on February 21 that it would support an April 28th implementation date in response to a request by eight Midwest Governors for year-round sale of gasoline containing 15 percent ethanol (also known as E15).

The EPA is taking action to allow E15 as well as the more readily available E10 blends of fuel to be sold in the summer months, when the current policy prevents E15 from being on the market. This change was first proposed by the Midwestern Governors, and then implemented under the former president Joe Biden.

Biofuel producers want to expand sales of E15, but they prefer a solution that is not limited to the Midwest. API is also in favor of a national policy as some players are concerned that a fragmented marketplace could lead to supply disruptions at localized locations.

API said that the EPA’s decision to expand in the Midwest reflects the need for Congressional intervention for a national solution.

Will Hupman said that this "would avoid a patchwork state-by-state policy while ensuring consumers can access the fuels on which they rely every day."

This month, a bipartisan group U.S. Senators reintroduced legislation that would allow nationwide E15 sales.

Other oil groups, such as the American Fuel and Petrochemical Manufacturers and Fueling American Jobs Coalition, also spoke out against the EPA decision.

AFPM "calls upon the affected Governors" to protect their consumers from possible increased gasoline prices and supply disruptions, by requesting additional time for the market prepare. Geoff Moody is senior vice president at AFPM of government relations and policies.

The EPA will take action against Illinois, Iowa Minnesota, Missouri Nebraska, Ohio South Dakota and Wisconsin. However, EPA Administrator Lee Zeldin stated that the agency would consider granting an additional year of compliance time to states who request it. Ohio has already requested this.

The decision of the agency is a good indicator of how the Trump administration will approach biofuel policy.

During Trump’s first term, debates between oil refiners and biofuel producers reached Trump, which prompted the EPA's policy review of federal quotas that mandated the use of alternative fuels. (Reporting and editing by David Gregorio; Stephanie Kelly, Jarrett Renshaw)

(source: Reuters)