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Will Biden's Lifting Of The 15% Ban lower gas prices?

Posted by: Erik Bjornstad

What does President Biden’s recent authorization of 15% ethanol in the summertime mean? It’s been a while since we’ve written about ethanol issues, so this is a good time to cut through the chatter and spell out the real truth.

What Did Biden Do?

On Tuesday, April 12th, the Biden Administration announced that it would lift the summertime ban on selling E15 gasoline. The rationale behind the move is that doing so will have some positive effect on high gas prices that are biting consumers in the pocketbook and wallet.

What Did That Change?

will-bidens-lifting-of-the-15-ban-lower-gas-prices-socialIn terms of the fuel being safe for cars, not much. Vehicles that are older than, say, 2001, have no problem running on E15 fuel. If you’ve heard questions about that, it may be that those questions are actually referring to E85 and flex-fuel vehicles - the situation where you need to have a flex-fuel vehicle with an adjusted computer that allows you to successfully run on fuel containing up to 85% ethanol. But 15% ethanol isn’t going to have much ill effect, so you should be good there. If you really aren’t sure about it, consult your vehicle’s owner's manual and follow its recommendations.

The real issue here is the Administration's lifting of a rule that previously limited the sale of E15 in the summertime. Which leads, naturally, to the question of why they felt the need to ban E15 in the summertime. 

The answer to that question is an environmental one. Ethanol in fuel serves several functions - it’s an octane booster that also helps the gas burn cleaner because it’s an oxygenate - it increases the amount of oxygen in the blend. But it has a flip side - it contributes to more ground-level air pollution by the simple fact that it evaporates more quickly than pure gasoline. The evaporated ethanol particles react with sunlight to create smog. Smog contains ozone which is terrible for people with asthma, the elderly, and especially children with developing lungs. And that’s not good.

To mitigate this problem, the EPA put a rule into place in 2011, limiting the sale of E15 from June to September. If the problem is “evaporative”, you don’t want to be using it during the hottest times of the year. Hence, the limitations on selling E15 in the summertime.

Is This Political?

Depends who you ask. People who don’t like the Democrats may decry this as just another example of “liberals” compromising their values when it’s expedient.

On the flip side, supporters can cite the historical precedent that former President Trump did exactly the same thing in 2019. He lifted the ban as well, but his move was later blocked by a panel of judges. I remember writing about it at the time and how it seemed like a strange move - Republicans usually decried all those “environmentalists forcing people to use green energy” and whatnot. But here was President Trump doing exactly what he had always criticized. The difference, in 2019, was that he announced it in Iowa amongst all the corn farmers, all while telling them how he was only looking out for them.

So how you interpret this depends on how you look at things. Hopefully, we can all take a step back and look past partisanship interpretations.

How Will That Affect You?

This move was entirely about gas prices. They argue that lifting the ban will help cut gas prices by 10-15 cents per gallon. Other analysts say the realistic effect is 5-10 cents per gallon.

Why would doing such a thing save people money? There are several ways to look at it. Those who say it won’t have much effect can point to the fact that less than 2% of gas stations across the country actually sell E15 fuel. So the scope of impact of this appears to be pretty limited from the start.

If you’re trying to spin this positively and argue that there is going to be some benefit, you have to explain why. One thought is that it may lower production costs in some areas. President Biden himself said it will lower prices for consumers because E15 is already 10 cents cheaper at the pump. That itself seems a little bit like a circular argument. 

Let’s hope they’re right about lower gas prices, though.

Check out these posts on Ethanol:

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This post was published on April 13, 2022 and was updated on April 13, 2022.

Topics: Ethanol, Fuel Policy