The move represents the government’s latest effort to reduce inflation, which reached a new 40-year high on Tuesday. Biden poll numbers have fallen under the burden of higher consumer spending and inflation is seen as a major factor in the November midterm elections. Sign up now for FREE unlimited access to Reuters.com Register The decision represents a victory for the US corn lobby with a possible expansion of demand for corn-based ethanol and a setback for oil refineries, which see ethanol as a competitor. The measure will allow Americans to continue buying E15, a gasoline that uses a 15% ethanol blend, from June 1 to September 15. buy more fuel, it will still have to help cut costs, senior executives told reporters Monday in a phone call that previewed the announcement. “These savings can add up, especially during the summer months, when fuel is high and as the emergency supply crisis caused by (Russian President Vladimir Putin)’s aggression continues,” a senior government official said. White House spokeswoman Jen Psaki later confirmed the move to Air Force One reporters on their way to Iowa, where Biden planned to make the announcement. The decision comes after several weeks of internal debate in the White House that brought environmentalists such as Gina McCarthy face to face with Agriculture Minister Tom Vilsack, the former governor of Iowa, according to two sources familiar with the discussions. The E15 summer ban was imposed due to concerns that it contributes to smog in hot weather, although research has shown that the 15% blend may not increase the smog compared to the more common 10% blends sold all year round. Russia’s invasion of Ukraine and subsequent sanctions and boycotts have pushed gasoline retail prices to record highs, a vulnerability for Biden’s Democrat counterparts in the November congressional election. Biden announced last month that the United States would sell 180 million barrels of crude oil from the Strategic Oil Reserve at a rate of 1 million barrels per day starting in May, the largest release from the stock since it was created in the 1970s. CORN VS OIL Biden will announce the expansion of E15 during a visit to POET Bioprocessing, the largest biofuel producer in the United States in the large corn state of Iowa. “We applaud President Biden and his government for acknowledging that low-cost, low-carbon ethanol should have a fair chance of boosting our energy security and reducing record pump prices,” said the president of the Renewable Fuels Association. Jeff Cooper. Representatives of the oil industry criticized the management for the decision. “Americans are looking for long-term solutions, not short-term political solutions (at high gas prices),” said Ron Cheet, a spokesman for the American Petroleum Institute, the main oil industry pressure agency. “The best way to ensure that Americans have access to the affordable and reliable energy they need is to promote policies that motivate US production and send a clear message that America is open to energy investment,” he said. The American Fuel and Petrochemical Manufacturers (AFP) has questioned whether the E15 sales expansion was legal. To make the change, the Environmental Protection Agency (EPA) plans to issue a national emergency exemption closer to June, administration officials said. The EPA is also considering additional measures to allow the use of E15 all year round, the White House said. “Fuel emergencies are short-lived and are destined for very specific unforeseen events and regional acute supply disruptions, such as those resulting from a hurricane,” said AFP chief executive Chet Thompson. Iowa Republican Johnny Ernst also welcomed the move, but reiterated calls for a more lasting change. “This is a step in the right direction,” Ernst told a 20-minute news conference, describing it as a way to combat rising fuel prices. “But in the long run, we need to ensure that this is implemented permanently and that we allow the E-15 all year round, in progress, in the future.” The courts rejected an earlier offer by Biden’s predecessor, Republican Donald Trump, in 2019 to extend the exemption that allowed E15 sales year-round. Officials who previewed Biden’s announcement said his administration would have a different “approach” and “power” from Trump, but gave no details. They also said that the EPA would work with states to ensure that there would be no “significant” negative impact on air quality in the summer due to the widespread sale of the E15. Sign up now for FREE unlimited access to Reuters.com Register Report by Alexandra Alper, Jarrett Renshaw and Steve Holland. additional references by Stephanie Kelly and David Morgan. Editors: Muralikumar Anantharaman, Mark Porter and Bill Berkrot Our role models: The Thomson Reuters Trust Principles.
