As the Biden administration continues to explore options for addressing high gas prices, the Renewable Fuels Association sent a letter to the White House late Monday explaining that strong Renewable Fuel Standard (RFS) volumes and expanded ethanol consumption would help keep pump prices in check.
RFA’s letter follows media reports that Biden administration officials may be considering lowering RFS volumes based on the mistaken belief that the program somehow is a factor contributing to current high gas prices.
“To be clear, lowering biofuel blending requirements under the Renewable Fuel Standard (RFS) would not reduce the cost of gasoline for American households,” wrote RFA President and CEO Geoff Cooper in a letter to National Economic Council Director Brian Deese. “In fact, cutting RFS volumes would most assuredly have the exact opposite effect on consumer gas prices. Reducing the domestic usage of low-cost renewable fuels like ethanol would increase demand for petroleum at a time when global oil inventories are already strained and prices are at seven-year highs.”
RFA noted that ethanol presently extends the U.S. gasoline supply by nearly 1.1 million barrels per day, equivalent to the combined crude oil production from Alaska, California, Utah, and Wyoming. According to a renowned economist and energy policy advisor to two former presidents, the use of roughly 1 million barrels per day of ethanol in the United States has lowered the average price of crude by $6 per barrel, thereby cutting the retail gasoline price by $0.22 per gallon.
The letter also pointed out that gasoline with just 10 percent ethanol (E10) is currently selling for 10-15 percent less (typically 35-50 cents per gallon) than “ethanol-free” gasoline (E0). Higher blends like E15 and E85 offer even greater savings.
“Rather than undermining the market for low-carbon renewable fuels, we encourage you to follow through on the President’s Day 1 pledge to ‘double down on the liquid fuels of the future,’” Cooper wrote. “This includes immediately proposing strong RFS volumes for 2021 and 2022, and taking swift regulatory action to facilitate the rapid expansion of E15 availability nationwide.”