U.S. allows year-round E15 gasoline

Jun 03, 2019

The decision could be good for farmers in the long run, a commodity strategist said

By Diego Flammini
Staff Writer
Farms.com

More bushels of U.S. corn could be heading to fuel refineries after the Environmental Protection Agency (EPA) finalized a rule on Friday to allow year-round sales of E15 gasoline.

Previously, the EPA banned the sale of E15, which is a blend of gasoline with 15 percent ethanol, from the beginning of June to the middle of September due to potential smog issues. People filling up their vehicle with gasoline during the seasonal ban usually use E10, which is a blend of gasoline with 10 percent ethanol.

The EPA’s decision comes after President Trump opened the door to year-round E15 in October 2018.

The ruling will help expand “the market for biofuels and managing this important program responsibly,” Andrew Wheeler, the EPA administrator, said in a May 31 statement. “Just in time for the summer driving season, it will be easier for gas stations to sell E15 year-round, giving drivers more choices at the pump.”

Corn growers are pleased to see E15 receive federal approval.

“Farmers are facing some tough times which makes this announcement particularly welcome,” Lynn Chrisp, president of the National Corn Growers Association, said in a statement Friday. “We thank President Trump for following through on his promise to rural America and USDA Secretary Perdue and supporters in Congress for their outspoken commitment to year-round E15.”

But commodity prices may not reflect the decision in the short-term.

This kind of ruling could take years to benefit farmers, said Moe Agostino, chief commodity strategist with Farms.com.

“It’s good news in the long run,” he told Farms.com. “It could add 150 million bushels in demand by the end of the year and as much as 2 billion bushels in (ethanol) production in the next 10 years. It doesn’t happen overnight, (though as) the infrastructure has to be in place.”

Corn prices may have experienced a small increase after the announcement if the weather in the U.S. wasn’t such an issue, Agostino said.

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