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Biden looks to boost ethanol to lower gas prices

The Biden administration said Tuesday it plans to help boost the production and sale of ethanol-blended gasoline to alleviate pain at the pump as inflation skyrockets.

President Joe Biden will announce that the Environmental Protection Agency expects to issue an emergency waiver that would suspend a summer ban on the use of a specific blended fuel, senior administration officials told reporters on a call.

Biden will make the announcement during a visit to a bioprocessing plant in Menlo, Iowa, a state that produces a significant part of the country’s ethanol.

April 7, 202202:16

At current prices, the administration’s move would lower prices by about 10 cents a gallon at the 2,300 gas stations in the country that offer the ethanol-blended fuel, the White House said.

Average gas prices have soared to more than $4 a gallon in recent weeks, with the administration largely pointing the finger at Russian President Vladimir Putin’s war in Ukraine. Biden announced plans late last month to release about 1 million barrels of oil a day from the Strategic Petroleum Reserve for six months to curb price hikes in what he called a “wartime bridge.”

Tuesday’s announcement comes just hours before the release of new inflation numbers from the Labor Department. White House press secretary Jen Psaki warned Monday that the Consumer Price Index for March could be “extraordinarily elevated.” In February, consumer prices were up by 7.9 percent compared to the same time last year, driven in part by rising gas prices.

“Since President Putin’s military build-up accelerated in January, average gas prices are up more than 80 cents. Most of the increase occurred in the month of March, and at times gas prices were more than a dollar above pre-invasion levels,” Psaki told reporters. “Certainly this data will be a reminder of the need to do something and take additional steps.”

The emergency waiver will apply to what is known as E15, which is 15 percent ethanol and 85 percent gasoline. In previous summers, sales of E15 have been prohibited in most of the country during the summer because of EPA restrictions on gasoline-related air pollution.

The announcement is likely to please some Republicans and Democrats in the Midwest. A bipartisan group of senators led by John Thune, R-S.D., and Dick Durbin, D-Ill., recently urged Biden to allow the year-round sale of E15 fuel to help drive down fuel costs for consumers.

But the waiver is also likely to raise air quality concerns. A peer-reviewed journal of the National Academy of Sciences issued a report in February that found that the carbon intensity of corn ethanol produced under the Renewable Fuel Standard was “no less than gasoline and likely at least 24 percent higher.”

However, an Argonne National Laboratory study published last year found that using corn-based ethanol instead of gasoline slimmed the life cycle of greenhouse gas emissions on average by 40 percent, senior administration officials told reporters, adding that the agency’s own analysis did not indicate that the emergency waiver was likely to harm air quality.

“The focus here is also on making sure that we are meeting the near-term energy supply emergency and doing so by leveraging homegrown fuels,” an official told reporters.

Molly Roecker contributed.