E10

The Environmental Protection Agency (EPA) has approved a request by governors from eight Corn Belt states to remove a summertime waiver for Reid Vapor Pressure (RVP) included in the Clean Air Act (CAA) for E10 gasoline, a 90/10 blend of petroleum-derived gasoline blendstock and ethanol. The motive for the governors’ request was a desire to increase sales of E15 gasoline and, by extension, boost ethanol/corn demand by putting it on the same summertime footing as E10. In granting the approval, the EPA conceded that the distribution system wasn’t ready for the change. In today’s RBN blog, we look at the decision and the impact it will have on refiners, retailers and drivers, and how it is likely to work against the Biden administration’s plans to keep a lid on gasoline prices. 

At first glance, the Environmental Protection Agency’s (EPA) proposal to facilitate increased sales of E15 — an 85/15 blend of gasoline blendstock and ethanol — by putting it on the same summertime regulatory footing as commonly available E10 in eight Midwest/Great Plains states might seem like a boon to corn farmers and ethanol producers. But as we discuss in today’s RBN blog, there are a number of economic, practical and even psychological barriers to broadened public access to — and use of — E15 that go well beyond the specific regulatory issue the EPA proposal addresses. As a result, as we see it, EPA’s plan is unlikely to boost E15 demand in any meaningful way, at least for now.

It’s no secret that higher gasoline prices are a problem for a lot of folks, including everyday drivers, businesses and — maybe especially — the politicians who hear the complaints from the first two. Although prices at the pump have been trending higher for some time, they’ve really come to the forefront in the past several weeks following Russia’s invasion of Ukraine, which has stressed global energy markets and sent U.S. officials looking for any and all options to keep a lid on prices. In today’s RBN blog, we look at President Biden’s decision to allow the sale of E15 gasoline during the summer months, whether it’s likely to provide U.S. drivers significant relief from high prices this summer, and how global pressures are moving ethanol prices higher too.