EPA proposes rule for year-round E15, a win for Iowa consumers, farmers, advocates say

Iowa drivers this summer could start buying E15 — a more budget-friendly gasoline that's blended with 15 percent ethanol.

The U.S. Environmental Protection Agency Tuesday proposed changing federal rules to allow year-round access to the higher renewable fuel blend.

"EPA is working to propose and finalize these changes by the summer driving season,” said Administrator Andrew Wheeler in a statement.

President Donald Trump directed the agency in October to begin rulemaking that allows for year-round E15 use. 

EPA also proposed changes in the trading and holding of biofuel credits, called renewable identification numbers, or RINs, under the Renewable Fuel Standard.

The federal law mandates how much ethanol and biodiesel must be blended into the nation's fuel supply. Most gasoline purchased today contains 10 percent ethanol.

More:In Iowa, Trump says he kept his E15 promises, claims Democrats would 'end ethanol'

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Iowa is the nation's largest maker of ethanol and biodiesel. It's also the nation's largest corn grower, and second-largest soybean producer.

Most ethanol produced in the U.S. comes from corn, although one plant in Iowa is making cellulosic ethanol from corn residue, the corn husks and stalks that remain in the field after harvest.

It's considered more environmentally friendlier than corn-based ethanol.

"Hats off the to the EPA," said Monte Shaw, an executive director of the Iowa Renewable Fuels Association. "There are some things in the draft rule that are very good for ethanol.

"And there are some things, that at first glance, would be problematic, that shouldn't be in the rule," he said, adding that the ethanol industry will need to dig into the proposed rule to better understand how it might impact biofuel producers.

"The president said he wanted to remove regulatory barriers to the sale of E15 year-round. I didn't hear anything about creating new barriers," Shaw said.

Summer E15 sales have been banned because of concerns it contributes to smog in warm temperatures, a perception that ethanol advocates say is inaccurate.

"Ending the nonsensical ban on summertime sales of higher blends of ethanol is a no-brainer and a big victory for Iowa, Midwest farmers and the country as whole," said U.S. Sen. Chuck Grassley, R-Iowa, in a statement.

Gov. Kim Reynolds said the proposed rule helps bring "greater stability to our ag economy.”

"Year-round E15 sales would be a win for Iowa corn farmers and Iowa drivers,” said Curt Mether, president of the Iowa Corn Growers Association. “This moves the rule in the right direction in hopes it is ready by the summer driving season."

Shaw said motorists will pay about 5-10 cents less per gallon for E15 gasoline over E10 fuel.

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He doubts farmers will see big gains in corn prices because of expanded E15 sales.

"Long-term, it's very significant," Shaw said. "Over time, E15 could become the best selling fuel across the country. Just like E10. But it's not going to happen this year" as retailers put in E15 pumps.

"It's not going to dramatically change the market dynamics in 2019. But it's going to help," he said. "It's not going to fix the corn prices for farmers in Iowa in 2019. But it's going to help."

The National Wildlife Federation said converting land from pasture or prairie to raise corn and soybeans for biofuels hurts the environment.

"More smog, more habitat destruction and more water pollution — that’s what will happen if today’s proposed expansion of year-round E15 is enacted,” said Collin O’Mara, CEO of the National Wildlife Federation.

“This overreach underscores the urgent need for Congress to reform the Renewable Fuel Standard and to put in place common-sense, bipartisan solutions that work for family farms and communities, while advancing cleaner, more sustainable fuels the right way.”