OPINION: EPA should help retailers provide US energy security

By Robert White, vice president of industry relations, Renewable Fuels Association | August 31, 2021

With offshore oil platforms and Gulf Coast petroleum refineries shuttered due to Hurricane Ida, consumers are worried yet again about fuel supply disruptions and high prices. Whether it’s a natural disaster like Ida or something not so natural, such as the Colonial Pipeline ransomware attack or political upheaval around the world, we’re often reminded just how fragile our fuel supply is.

For this reason, we’ve often found ourselves encouraging EPA to allow more flexibility when it comes to fuel options and the myriad regulations fuel retailers face. We did this in 2019 and 2020 in response to crises in the Middle East , back in May with the Colonial shutdown, and we did it again Monday when Ida slammed the Gulf Coast.

The fact is, a 2019 study on the Renewable Fuel Standard’s impact on energy security found that growing the supply of ethanol significantly helps dampen gasoline price shocks that result from sudden oil market disruptions. “The flexibility offered to gasoline marketers to vary the amount of renewable fuels blended into gasoline depending on the ethanol price compared to the price of the conventional petroleum-based gasoline provides insurance against very large gasoline price increases during a disruption,” according to study author Philip K. Verleger, a renowned global oil market analyst and former energy advisor to two presidents. 

In fact, the RFS has lowered gasoline prices by an average of $0.22 per gallon in recent years, saving the typical American household $250 annually. A substantial amount of fuel ethanol production capacity—nearly 200,000 barrels per day—is either sitting idle today or producing industrial and/or other non-fuel grades of ethanol. We have the ability to produce more fuel ethanol, which helps extend gasoline supplies and blunt the impacts of unforeseen supply shocks.

This is one of the reasons why we make it a priority to help marketers expand the fuel options at their retail locations. Programs like the Higher Blends Infrastructure Incentive Program help retailers do just that, and we were pleased to see USDA’s recent announcement that it is investing another $26 million to build infrastructure to expand the availability of E15 and other higher blends of renewable fuels. USDA anticipates the grants could expand demand by more than 800 million gallons annually across 23 states. RFA is proud to have assisted many retailers and marketers in identifying their equipment needs and preparing their grant applications for this program. 

When it comes to promoting fuel market stability in the aftermath of Hurricane Ida, RFA’s requested actions from the EPA relate to pump labeling, underground storage tanks, and gasoline volatility regulations. EPA should also approve earlier requests to exercise its enforcement discretion—if needed—to allow existing E15 retailers in conventional gasoline areas to continue selling the fuel through the remainder of the summer ozone control season.

The latter cannot be stressed enough. While the D.C. Circuit Court of Appeals in July reversed the 2019 EPA rule that lifted outdated restrictions on the year-round sale of E15, we know there are ways to work around this, both through legislation and working through EPA’s regulatory process. For us, the short-term goal is to keep E15 available in all markets through September 15. We know E15 marketers are concerned about losing year-round retail opportunities, and we want to help retailers be ready to move beyond this judicial speed-bump on the road to providing even more low-carbon ethanol to U.S. drivers. 

While it may take the Gulf Coast a long time to recover from Hurricane Ida, our government officials can start, today, to remove unnecessary regulatory roadblocks that only work to increase and spread the economic damage of fuel market volatility.