EPA grants emergency waiver for summertime E15 sales in Iowa

by Jared Strong, Iowa Capital Dispatch
April 28, 2023

Federal regulators approved a stopgap waiver on Friday that will allow the broad summertime sale of E15 fuel this year.

For more than 30 years, gasoline blends that contain 10% ethanol — or E10 — have received a volatility waiver from the U.S. Environmental Protection Agency that has not been permanently extended to blends that contain 15% ethanol.

That is despite their relatively similar volatility. Both of the blends have a higher likelihood of vaporizing in the warm summer months and polluting the atmosphere than gasoline blended with no ethanol, according to EPA.

EPA granted E15 a waiver in 2019, but a federal appeals court ruled in 2021 that the agency did not have the authority to take that action without congressional authorization.

Last year, EPA granted states temporary waivers to sell summertime E15 due to diminished fuel supplies that resulted from Russia’s invasion of Ukraine. It takes a similar tack this year.

“Allowing E15 sales during the summer driving season will not only help increase fuel supply, but support American farmers, strengthen U.S. energy security, and provide relief to drivers across the country,” EPA Administrator Michael Regan said Friday.

EPA noted that E15 is about 25 cents per gallon cheaper for consumers than E10 right now.

There has been a broad push in Iowa to make E15 the standard ethanol blend available to drivers, and the summertime sales ban that in the past was effective between June 1 and Sept. 15 was a major roadblock.

To overcome it, Gov. Kim Reynolds and other Midwestern governors made a seemingly paradoxical request to EPA: end the volatility waiver for E10 in their states.

E10 is the most widely consumed fuel in the country. If it loses its waiver, which EPA is poised to approve effective about a year from now, petroleum refineries will be forced to produce lower volatility gasoline to be blended with ethanol to meet federal regulations.

That lower volatility gasoline could also be used to produce E15 and still comply with those regulations.

“While it’s just a little bit more ethanol for the car — 10 to 15% — from an ethanol perspective it’s 50% more ethanol,” Monte Shaw, executive director of the Iowa Renewable Fuels Association, said recently. “That’s huge.”

Ending the volatility waiver will have the effect of reducing pollution, which is a reason why federal regulators are inclined to do it, but its potential effect on the cost of fuel is unclear.

EPA noted in its proposed rule change that it might increase refinery production cost and lower overall gasoline production. That is why EPA delayed the proposed effectiveness of the change to 2024.

“A 2023 implementation would result in insufficient supply of gasoline in the petitioning states,” EPA concluded.

Those states include Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin.

The supply might be diminished because refineries most often remove butane from gasoline to lower its volatility. That also has the effect of reducing its overall volume.

The consumption of fuel ethanol in the United States has increased dramatically since 1990, when the volatility waiver for E10 was created. Consumption was about 0.75 billion gallons that year. In 2019, it was 14.55 billion gallons.

Switching to E15 will further increase that consumption, and Friday’s announcement of an emergency waiver eliminates a potential hiccup in that transition.

“This is a huge win for Iowa farmers and our ethanol industry and proves that even our biggest adversaries can’t ignore the advantage biofuels brings to our country’s economy and national security,” Reynolds said in a statement Friday.

Iowa Capital Dispatch is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Iowa Capital Dispatch maintains editorial independence. Contact Editor Kathie Obradovich for questions: info@iowacapitaldispatch.com. Follow Iowa Capital Dispatch on Facebook and Twitter.