Nebraska and Iowa got some good news this week when President Joe Biden announced that he was waiving rules that restrict ethanol blending.
As a result, gasoline prices could go down about a dime per gallon — although only at a limited number of stations, and in just part of the country.
The modest impact on gas prices is expected to have a minimal effect on the soaring inflation rate, and the measure announced Tuesday isn’t as sweeping as biofuel boosters have wanted.
Still, it’s a step in the right direction — for gas prices, for the rural economy in Nebraska and Iowa, and for the goal of relying more on renewable fuels.
At issue is the 15% ethanol blend that is usually prohibited between June 1 and Sept. 15 because of concerns that it adds to smog in high temperatures. Most gasoline sold in the U.S. is blended with 10% ethanol, which currently costs less than gas and thus means lower prices at the pump.
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Biden announced in a visit to Iowa that the Environmental Protection Agency will issue an emergency waiver to allow the 15% ethanol blend. But the blend and its 10 cents per gallon savings will apply only to about 2,300 gas stations out of more than 100,000 nationwide, according to the Associated Press. The stations are mostly in the Midwest and the South, including Texas.
Administration officials say the EPA has determined that the additional summertime E15 gasoline sales will not have a significant effect on air quality. Some environmentalists contend that more ethanol in gasoline increases pollution.
Members of Congress from farm states like Nebraska and Iowa have been pushing for the waiver. While they welcomed Biden’s announcement, they called for the change to become permanent.
“I have long led the push for the sale of year round E15 because it will help lower prices for families at the gas pump,” said Nebraska Republican Sen. Deb Fischer. “If President Biden is serious about driving down costs for Americans, he should allow the sale of E15 during the summer, throughout the energy crisis and beyond. Doing so would be good for families, the environment, and rural America.”
Rep. Don Bacon, R-Neb., said a permanent waiver would cut reliance on foreign energy sources.
“Most Americans want energy independence by using an ‘all of the above approach’ and using our innovation,” Bacon said. “Biofuels is one of the tools we need. Energy independence strengthens our national security and increases prosperity.”
It’s true that biofuels are good for our local economy. And increased use of those fuels can help insulate the U.S. energy market — at least to some degree — from the type of gas price hikes that have been seen since Russia invaded Ukraine.
Biden described the 8.5% increase in consumer prices from March 2021 to March 2022 as “Putin’s price hike,” referring to Russian President Vladimir Putin. But in fact, a large share of the inflation in the past year can be blamed on rising costs for food, housing and other items, not gas prices.
Still, if Biden’s move helps a little bit in lowering the price of gas while expanding the market for ethanol, that’s a good thing for Nebraska and Iowa.
And even if the change is not permanent yet, this summer will be a prime opportunity for ethanol backers to prove what they claim: that year-round E15 blends can be good for everyone.