Biden Waiving Ethanol Rule This Summer to Reduce Gas Prices

WASHINGTON (AP) — President Joe Biden is visiting corn-rich Iowa on Tuesday to announce he’ll suspend a federal rule preventing the sale of higher ethanol blend gasoline this summer, as his administration tries to tamp down prices at the pump that have spiked during Russia’s war with Ukraine.

A majority of the gasoline that is sold in the United States contains 10% ethanol. An emergency waiver will be issued by the Environmental Protection Agency to permit widespread sales of 15% ethanol blend. This is because it’s often prohibited from June 1-September 15 due to concerns about smog at high temperatures.

According to senior Biden officials, the change will average 10 cents per gallons at 2.300 gas stations. According to industry associations, these stations are mainly located in the Midwest, the South and Texas.

This move is coming as Biden faces increasing political pressure about inflation. Tuesday’s data showed that prices have risen at an unprecedented rate in over 40 years. Partly this was due to the escalating energy prices in the Russia-Ukraine conflict. Labor Department reported Tuesday that March’s consumer price index increased 8.5% over 12 months, marking the highest year-over–year jump since December 1981.

More than half the jump in monthly prices was due to gas prices. In March, food and housing prices rose in ways that may have a negative impact on families. Inflation began to accelerate last year amid robust hiring after the passage of Biden’s $1.9 trillion coronavirus relief package, a challenge for U.S. consumers that Russia’s invasion of Ukraine then amplified.

Administration officials said the EPA has begun analyzing the “emergency” step of allowing more E15 gasoline sales for the summer and determined it is not likely to have significant on-the-ground air quality impacts. That’s despite some environmentalists long arguing that more ethanol in gas increases pollution, especially during warmer summer months.

Biden will announce his move to Menlo West, a biofuels company. Iowa is the country’s largest producer of corn, key to producing ethanol.

Another effort to improve global energy markets has been made by the waiver. Last month, the president announced the U.S. will release 1 million barrels of oil per day from the nation’s strategic petroleum reserve over the next six months. After gas prices rose to about $4.23 per gallon at the end March, they have fallen to around $4.23 per gallon, as compared to $2.87 last year, according to AAA.

“Not only is this decision a major win for American drivers and our nation’s energy security, it means cleaner options at the pump and a stronger rural economy,” Emily Skor, CEO of the biofuel trade association group Growth Energy, said in a statement.

Both parties had also urged Biden not to deny the E15 waiver to members of Congress.

“Homegrown Iowa biofuels provide a quick and clean solution for lowering prices at the pump and bolstering production would help us become energy independent once again,″ said Iowa Republican Sen. Chuck Grassley. Biden was sent a letter by nine Republican and seven Democratic Senators from Midwestern States last month, asking him to permit year-round E15 sales.

The trip will be Biden’s first as president to Iowa, where his 2020 presidential campaign limped to a fourth-place finish in the state’s technologically glitchy caucus.

Biden won the Democratic nomination after rebounding. He returned to Iowa for the rally on the fairgrounds, four days before Election Day 2020. Donald Trump was elected the winner of the state.

Biden heads back to the state at a moment when he’s facing yet more political peril. He’s saddled with sagging approval ratings and inflation at a 40-year high while his party faces the prospect of big midterm election losses that could cost it control of Congress.

Read More: Russia’s Ukraine Invasion Could Break Oil’s Grip On U.S. Politics

He also plans to highlight the bipartisan $1 trillion infrastructure bill that was passed last fall. The legislation includes funding for internet access improvements, modernizing wastewater systems and reducing flood threats, and improving roads and bridges in densely populated areas.

“Part of it is showing up in communities of all sizes, regardless of the results of the last election,” said Jesse Harris, who was a senior adviser to Biden’s 2020 campaign in Iowa and directed get out the vote and early voting efforts for Barack Obama’s presidential campaign in 2008.

Harris said most presidents who visit Iowa typically go to the state’s largest cities. Hitting an area like Menlo, part of Guthrie County, which backed Trump over Biden by 35 percentage points in 2020, “does speak to the importance the administration places on infrastructure broadly but also infrastructure in rural and smaller communities.”

Biden’s administration will spend the next weeks pushing for billions in rural funding. Senior officials and cabinet members will visit the country in order to assist communities with accessing the funds available under the infrastructure package.

“The president is not making this trip through a political prism,” White House press secretary Jen Psaki said. “He’s making this trip because Iowa is a rural state in the country that would benefit greatly from the president’s policies.”

Even so, officials in the administration have suggested for years that Biden would travel more to support an economy which is recovering from the economic setbacks caused by the coronavirus outbreak. For example, the number of Americans who are unemployed has dropped to its lowest level since 1970.

However, much of the good news about jobs nationally was overshadowed in recent years by rising gas prices and food inflation that has offset wage gains.

“Maybe a trip back to Iowa will be just what Joe Biden needs to understand what his reckless spending, big government policies are doing to our country,” Iowa Republican Party Chairman Jeff Kaufmann said in a statement.

Biden will travel to Greensboro in North Carolina on Thursday, just after Iowa.

Psaki blamed Russia’s war in Ukraine for helping to drive up gas prices and said the administration expects the consumer price index for March to be “extremely elevated” in large part because of it.

In the past, E15 was not allowed to be sold in certain seasons by the EPA. This includes after hurricane Harvey. Trump’s administration approved the sale of E15 in summer months, but the ruling was overturned two years later by a federal appeals judge.

A group representing petroleum refiners blasted the move, saying the only emergency was Biden’s dropping poll numbers.

“We are right there with the administration on wanting to see relief for consumers at the pump, but an unlawful executive order is not how to solve the problem,” said Chet Thompson, president & CEO of the American Fuel & Petrochemical Manufacturers.

Thompson stated that emergency fuel waivers were intended to provide short-term relief from supply disruptions caused by natural disasters like a hurricane. The new waiver “is politics, not a real solution for drivers.”


Matthew Daly, an Associated Press journalist, contributed to the report.

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