Biden to announce waiver on summer ethanol ban: will this bring down gas prices?
Gasoline prices are a major concern for consumers and the Russian invasion of Ukraine has prompted Biden to waive a ban on high-ethanol alternatives.
President Joe Biden is expected to announce a significant new step to bring the price of gasoline back down, lifting a ban on year-round sales of E15 gasoline which contains a high concentration of ethanol
The United States and its allies have levied tough economic sanctions against the Putin regime due to the Russian invasion of Ukraine. However by hitting the Russian energy industry, a significant contributor to global supplies, the sanctions have sent gas prices soaring.
E15 gasoline has a 15% ethanol blend, which has been linked to air quality concerns, and so is usually banned during the summer months when energy demand is lower. Former President Donald Trump reversed the ban in 2019 but it was reinstated last year thanks to a US Court of Appeals ruling.
Biden is expected to announce the move on Tuesday, although White House officials have been quick to point out that the waiver is simply a short-term response to an extraordinary situation.
CNN report that one senior administration official had said that it “is distinct from” Trump’s attempt to actively expand ethanol sales, and that it is “based on the current circumstance, which is a fuel supply emergency.”
Federal efforts to curb gas prices already reap rewards
In late March Biden announced plans to release oil from the United States’ strategic reserve to increase the supply of gasoline and therefor reduce the cost. The plan would allow for up to one million barrels to be released every day, which would represent the most extensive use of the reserves in US history if fully utilised.
“Look, I know gas prices are painful. I get it. My plan is going to help ease that pain today and safeguard against tomorrow,” Biden said in announcing the initiative. “It’s not time for politics. Americans can’t afford that right now.”
The total withdrawal is reportedly capped at 180 million barrels, equating to six months of daily draws. This would represent a significant proportion of the US’ 568 million reserve barrels. The use of the strategic reserve appears to have had the desired effect and the price of gasoline has fallen in the past two weeks.
From a peak of around $4.33 last month the national average price of a gallon of gasoline had fallen to $4.09 by 12 April. Biden will hope that by further increasing the supply of gasoline the administration can bring the price down and relieve the financial cost for consumers.