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Fuels

Trump: Year-Round E15 Sales 'Probably' Possible

As EPA weighs granting RVP waiver to higher ethanol blend, president signals his support

WASHINGTON -- E15’s sale year-round is probable, according to recent remarks from President Donald Trump.

During an April 12 meeting with legislators and governors, Trump said that his administration may allow retailers to sell the 15% ethanol blend of gasoline through the summer months, Reuters reported. Currently, the U.S. Environmental Protection Agency (EPA) does not waive Reid vapor pressure (RVP) regulations on E15, which prohibits E15 use in most markets in any vehicle other than flex-fuel vehicles from June 1 to Sept. 15, the busiest driving period of the year. Although several fuel retailers—including Kwik Trip, Kum & Go, QuikTrip, Thorntons, Sheetz and Murphy USA—sell E15, they have cited the waiver issue as a major headwind to greater expansion. Some, including Sheetz, have pleaded the case for year-round E15 sales to the president in person.

“We’re going to be going probably, probably to 15, and we’re going to be going to a 12-month period,” Trump said. “We’re going to work out something during the transition period, which is not easy, very complicated.”

Liz Bowman, a spokeswoman with the EPA, confirmed earlier that day that the agency “has been assessing the legal validity of granting an E15 waiver since last summer” but has been waiting for the Trump administration to wrap up its series of talks with lawmakers representing states with large oil and corn-growing sectors, and the U.S. Department of Agriculture, before deciding.

Ongoing Push

Refiners and their legislative champions such as Sen. Ted Cruz have been pushing for a price cap on Renewable Identification Numbers (RINs), biofuel blending credits that show they have met their blending obligations under the Renewable Fuel Standard (RFS). Refiners have argued that rising RIN costs are hurting their businesses. Ethanol and corn proponents, meanwhile, have argued that capping RIN prices would undermine the intent of the RFS, which is to increase the amount of biofuel blending; instead, they suggest allowing sales of E15 year-round would not only increase ethanol’s market share but also control RIN prices.

“Glad Pres Trump announced E15 yr round w/out a RIN cap,” tweeted Sen. Chuck Grassley of Iowa, who has been part of the White House discussions. “This will help farmers & keep RIN prices low like refiners have wanted.” Trump's support of year-round E15 sales could help placate farmers, who are growing nervous over the implications of a potential trade war with China, which is a major importer of U.S. corn.

“We applaud President Trump for embracing a common-sense fix to create a level playing field for cleaner, more affordable fuel options during the summer driving season,” said Emily Skor, CEO of ethanol group Growth Energy, in a statement. “The White House clearly understands that RVP relief will expand a growing market for America’s farmers while letting consumers pick the fuel of their choice.”

The news comes after reports that the EPA has been granting a record number of waivers to refiners that allow them to avoid submitting RINs to meet their 2017 blending obligations. Reuters reported that Chevron and ExxonMobil have requested the waivers, which the EPA typically reserves for small refineries facing financial hardship. Both oil giants are requesting the action for their smallest refineries, following the lead of Andeavor, which was recently granted a waiver for three of its refineries. 

The news sparked a backlash from ethanol and corn supporters, who argued that the waiver system was being abused. In a statement to Reuters, a Chevron spokesman did not confirm its waiver request, but also acknowledged the benefit of such a move.

"Several competitors have reportedly received exemptions from the RFS," he said. "If true, any refinery which has not been exempted from the RFS will be at a competitive disadvantage."

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