White House action on high fuel prices ignores E15

By Erin Voegele | March 31, 2022

The White House on March 31 announced a set of proposals that aim to address skyrocketing fuel costs caused by the Russian invasion of Ukraine. The proposals overlook the potential of homegrown biofuels and focus primarily on increasing oil supplies.

Information released by the White House explains that Russia’s actions have caused gas prices to increase by nearly $1 per gallon, from $3.30 at the start of 2022 to more than $4.20 today. To help bring prices down, Biden has announced a two-part plan.

“The first part of the President’s plan is to immediately increase supply by doing everything we can to encourage domestic production now and through a historic release from the Strategic Petroleum Reserve to serve as a bridge to greater supply in the months ahead,” said the White House in a statement. As part of that effort, Biden is taking action against oil companies that are using the current supply crunch to maximize profits. He is calling on Congress to make companies pay fees on wells from their leases that they haven’t used in years and on acres of public lands they are hoarding without producing. Companies that are producing from their leased acres and existing wells will not face higher fees, according to the White House. However, companies that continue to sit on non-producing acres will have to choose whether to start producing or pay a fee for each idled well and unused acre.

The administration has also announced plans for the largest release of oil reserves in history, with the aim to put an average of 1 million barrels the market from the Strategic Petroleum Reserve each day for the next six months.

The second component of the plan focuses on achieving American energy independence. The White House said Biden will call on Congress to pass his plan to speed the transition to clean energy that is made in America, which includes provisions related to electric vehicles. Biden will also issue a directive authorizing the use of the Defense Production Act to secure American production of critical materials to bolster the U.S. clean energy economy.

Despite a recent confirmation that the Biden administration is considering reinstating the year-round availability of E15 as way to reduce gas prices, the narrow set of proposals released by the White House on March 31 did not address the potential of homegrown, renewable biobased fuels.

Representatives of the ethanol industry are calling on Biden to recognize the role low-carbon biofuels can play in reducing fuel prices.

“Doubling down on petroleum dependence is not an economically or environmentally sustainable solution for lowering gas prices, and it completely undermines this administration’s ambitious climate objectives,” said Geoff Cooper, president and CEO of the Renewable Fuels Association. “It is baffling to us that President Biden continues to overlook ethanol, which is the most readily available, lowest-cost, and lowest-carbon option for extending our nation’s fuel supply. Rather than draining our strategic petroleum reserve and scolding U.S. oil producers for failing to increase production, we believe the administration should be empowering farmers and ethanol producers. They are eager to do their part to deliver economic relief and energy security for their fellow Americans. Today, ethanol is selling for $1 per gallon less than gasoline and we are sitting on record ethanol inventories and ample spare capacity; yet access to the marketplace continues to be limited by decades-old regulatory barriers that never made sense. Simple administrative actions could unleash the power of renewable fuels to immediately reduce pump prices without sacrificing the health of our environment. Yet, the strategic national asset that is our renewable fuels industry continues to be neglected by this administration. We urge President Biden to take action now to facilitate expanded production and use of low-carbon biofuels like ethanol.”

The RFA also joined with the Advanced Biofuels Business Council, Growth Energy, National Corn Growers Association and National Farmers Union to issue a joint statement calling on Biden to take action to allow year-round sales of E15. “The White House is actively considering an E15 fix to deliver relief at the pump, but today’s announcement made no mention of homegrown fuels,” the groups said. “It was just another stop-gap release of oil reserves and a promise of more mineral extraction down the road. The clock is ticking, and failure to protect E15 from summer fuel restrictions threatens to take away a popular, money-saving option at the pump in 30 states. If action isn’t taken by the administration, those drivers will see their gas prices spike overnight. There’s a record surplus of lower-cost, domestic biofuels ready to more than fill the void left by Russian oil. E15 has already been helping some drivers save more than 30 cents a gallon. Given the steady discount on ethanol against unblended gasoline, biofuels are a source of energy security and savings the White House cannot afford to ignore. Just today, another bipartisan band of lawmakers called on President Biden to waive outdated and senseless restrictions on the sale of homegrown ethanol, reflecting a growing chorus of leaders concerned about the fast-approaching regulatory cliff on gas prices. The time to act is now.”