EPA’s 4th Fuel Waiver Extends 15% Ethanol Gasoline Sales to Aug. 29

The U.S. Environmental Protection Agency (EPA) has issued its fourth emergency fuel waiver of the year, effective today, extending sales of gasoline with a 15% ethanol blend another 20 days to Aug. 29 for areas of the country without a Reformulated Gasoline Program. The agency said it intends to continue extending the waiver until the “extreme and unusual fuel supply circumstances” stemming from the war in the Ukraine subside.

“Domestic and international sanctions and public pressure on Russia have significantly disrupted the supply and distribution of purchasable barrels of crude oil and petroleum products in the global market for the U.S. and likeminded countries,” EPA Administrator Michael Regan said in an Aug. 8 letter to governors announcing the waiver extension.

While gasoline prices at the pump this summer are lower than a year ago, they’re still at a high level historically. The $3.807 per-gallon retail price of gasoline on August 1 was about 20 cents lower than the $4.060 per-gallon price on the same day last year, GasBuddy said. The U.S. national average retail price of regular unleaded gasoline spiked to $5.034 per gallon on June 16, 2022, according to GasBuddy, a unit of Alpharetta, Georgia-based PDI Technologies.

By allowing sales of fuel with 15% ethanol during the summer, it could push down regular gasoline prices, according to Geoff Cooper, president and chief executive officer at the Renewable Fuels Association in Washington, D.C. and Ellisville, Missouri.

“Common sense tells you if you blend more ethanol, the effect is going to be to reduce the finished price of that gasoline that’s delivered to retail. That’s exactly why EPA issued those emergency waivers – to allow E15 to continue to be sold this summer and they did the same thing last summer. Gas prices are pretty high,” Cooper said. The wholesale price difference between a gallon of denatured fuel ethanol, containing 98% ethanol/2% denaturant, is 60 cents to 70 cents lower than a gallon of ethanol-free 100% gasoline, he said.

The $3.807 per-gallon retail price of gasoline on August 1 is about 20 cents lower than $4.060 on Aug. 1, 2022, GasBuddy said. The U.S. national average retail price of regular unleaded gasoline spiked to $5.034 per gallon on June 16, 2022, according to GasBuddy.

U.S. benchmark crude oil prices rose to their highest price of the year Wednesday, reaching $84.40, or about 25% higher than June 27 and the highest level since Nov. 16, The Wall Street Journal reported Thursday.

GasBuddy on Thursday reported this week’s U.S. overall gasoline inventories at 216.4 million barrels, down 1.8% from August 2022 and about 7% below the five-year average for this time of year. Inventories were down in every region except the West Coast, where they were up by 0.1 million barrels, and in the Rockies, where inventory levels were unchanged from a year ago, GasBuddy said.

“Domestic and international sanctions and public pressure on Russia have significantly disrupted the supply and distribution of purchasable barrels of crude oil and petroleum products in the global market for the U.S. and like-minded countries,” Regan said.

At the pump, the average price of gasoline in the U.S. increased 7.8 cents in the last week to $3.79 per gallon, according to GasBuddy, which compiles gas-price data from over 11 million price reports from a base of 150,000 gas stations across the country. The average price of diesel in the U.S. rose 14.9 cents in the last week to $4.14 per gallon, GasBuddy said. A 15% ethanol blend sold at U.S. convenience stores and fuel stations is commonly called Unleaded 88, which has an octane level of 88.

U.S. benchmark crude oil prices rose to their highest price of the year Wednesday, reaching $84.40, or about 25% higher than June 27 and the highest level since Nov. 16, The Wall Street Journal reported Thursday.

GasBuddy on Thursday reported this week’s U.S. overall gasoline inventories at 216.4 million barrels, down 1.8% from August 2022 and about 7% below the five-year average for this time of year. Inventories were down in every region except the West Coast, where they were up by 0.1 million barrels, and in the Rockies, where inventory levels were unchanged from a year ago, GasBuddy said.

“Domestic and international sanctions and public pressure on Russia have significantly disrupted the supply and distribution of purchasable barrels of crude oil and petroleum products in the global market for the U.S. and likeminded countries,” Regan said.

At the pump, the average price of gasoline in the U.S. increased 7.8 cents in the last week to $3.79 per gallon, according to GasBuddy data. GasBuddy, a unit of Alpharetta, Georgia-based PDI Technologies, compiles gas-price data from over 11 million price reports from a base of 150,000 gas stations across the country. The average price of diesel in the U.S. rose 14.9 cents in the last week to $4.14 per gallon, GasBuddy said. Fuel sold as Unleaded 88 contains 15% ethanol and has an octane rating of 88.

While government regulations prohibit sales of a 15% ethanol-blend fuel during summer months in areas without a Reformulated Gasoline Program, the EPA can overrule this regulation with a waiver to address unusual fuel supply circumstances. The EPA issued the first waiver in April, then extended it in June and again in July. In areas with a Reformulated Gasoline Program, E15 can be sold year round.

With $90 million in new government funds for alternative fuels flowing from the Inflation Reduction Act, rural fuel stations can apply for grants from the Higher Blends Infrastructure Incentive Program, aims to broaden the availability of higher blends of renewable fuels, such as E15 and B20. The goal is to help small, rural companies, such as fueling stations and food-and-fuel retailers, afford the cost of replacing fuel dispensers and tanks through federal grant dollars.

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