EPA’s Ethanol Decision Could Rain on Next Year’s July 4 Parade

The prestigious American Automobile Association (AAA) is reporting that a record 43 million people will be hitting the roads for the July 4 weekend, “spurred by the lowest gas prices since 2005.” AAA goes on to note that Americans have saved about $20 billion on gasoline so far this year, almost $200 per household.

These low gas prices are a boon to American consumers, particularly as anemic growth compounds worries about future economic instability. Low gas prices don’t just ease pain at the pump. Consumers get additional savings from lower transportation and other input costs at the grocery store, farmers market, and anywhere else goods may travel long distances.

Unfortunately, this windfall may be short-lived.

The Environmental Protection Agency (EPA) is once again considering an increase in the amount of corn ethanol and other renewable fuels refiners could be required to blend into the nation’s gasoline supply. This would make it likely that we’ll breach the E10 “blendwall” – the maximum amount of ethanol that can be blended at current fuel proportions. Upping the renewable volume obligation (RVO), the number of gallons of renewable fuel refiners are forced to add, could mean higher prices for typical E10 gasoline and less availability of E0 – an ethanol-free fuel preferred by many motorcyclists and boaters. In order to comply with a higher RVO, refiners could resort to higher blends of ethanol such as E15 (15 percent ethanol), a blend that few cars and even fewer small engines can safely use without violating the manufacturer’s warranty or experiencing mechanical problems.

Already, U.S. fuel producers are struggling to meet the 2016 RVO standards, despite the uptick in fuel consumption. The increased volumes currently proposed by the EPA will only exacerbate matters. This means that next year’s July 4 weekend could be a lot less fun thanks to higher gasoline prices. Less E0 could also mean your boat or motorcycle will have to stay in the garage. Any hopes of catching up on yardwork during a “staycation” could likewise be thwarted – chainsaws, grass trimmers, leaf blowers … these all need lower ethanol blends to run safely.

So enjoy the drive this weekend and when you get home, urge Congress to take action before the broken Renewable Fuel Standard can ruin another holiday weekend.