WASHINGTON, D.C. — The Biden administration recently announced it is waiving the summer ban on fuels with a higher percentage of ethanol to combat rising gas prices. An analysis by Consumer Reports shows that the economic benefits of this strategy are negligible, and the associated uptick in emissions could have an outsized impact on disadvantaged communities. A better, long-term sustainable solution to help consumers at the pumps would be adopting a national low-carbon fuel standard (LCFS) that:
- Promotes more environmentally friendly biofuels with a reliably lower carbon intensity;
- Limits the use of food-based biofuels; and
- Accelerates electrification of the transportation sector.
Almost all fuels currently being sold in the U.S. are blended with 10% ethanol (E10). Some gas stations sell gas with 15% ethanol (E15), which is less expensive, but stations have to pause sales in the summer. The President said the Environmental Protection Agency will issue an emergency waiver permitting year-round sales of E15 gasoline to help lower prices.
However, the economic benefits of lifting the summer ban are unconfirmed. E15 is cheaper than E10, but its use results in lower fuel economy due to the lower energy content of ethanol compared to gasoline. The differences may be minimal and can be compensated by the higher octane number of E15 (i.e., similar to the difference between regular and premium gas). While the administration states that the lower price of $0.1 of E15 per gallon (i.e., about 2.5% with the current gas price) would help families across the US to save on gas, the lower fuel economy of the E15 can diminish the benefits. Assuming 1-2% lower fuel economy of the vehicles running on E15 versus E10, that only translates to at most 0.2 cents, or 1.2% per mile lower cost of driving.
Removing the E15 ban during summer time may also create equity problems. The ban initially was put in place due to concerns over the higher nitric oxide (NOx) emissions of E15 and its role in smog formation. Recent studies show very little to no impact on NOx emission from newer models of cars and trucks running on E15. However, 50% of vehicles on the road are older than 10 years, and those vehicles may emit higher NOx emissions when running on E15. Lower income households tend to have older vehicles, and disadvantaged communities have historically been disproportionately impacted by air pollution. Lifting the summer ethanol ban could exacerbate this long-standing equity issue.
Another concern is that the ethanol currently being sold in the U.S. is mostly from food crops such as corn. Using this type of ethanol may have little to no impact on reducing greenhouse gas emissions, and it can negatively affect food security and price. This happens when food production competes with production of food-based biofuels such as corn ethanol, and that increases the food price. Considering the recent inflation in food prices due to the conflict in Ukraine, this can be a real challenge in using E15 as a long term solution.
A quick fix to some of the equity concerns would be keeping the ethanol ban in place in communities that have the greatest problems with smog in the summer. But this strategy is still only a short term solution that would barely alleviate some burden of the high gas price that consumers are facing at the pump.
A detailed methodology for the analysis by CR’s sustainability policy team is available by request.
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Contact: David Butler, david.butler@consumer.org