Temporary Waiver Clears the Way For Summer 2022 E15 Sales – Governor Reynolds Leads Effort to Address 2023 and Beyond

Effective May 1, 2022 the United States Environmental Protection Agency (U.S. EPA) has issued a temporary emergency waiver allowing for the sale of E15 during the summer driving season. The U.S. EPA issued the temporary waiver under the authority provided to the agency by the Clean Air Act to responds to emergency fuel supply shortages. Citing fuel supply disruptions across the globe caused by the war in Ukraine, EPA is issuing the waiver effective immediately. 

Under the temporary waiver, gasoline that does not meet the applicable RVP requirements may not be introduced into terminal storage tanks from which gasoline is dispensed into trucks for distribution to retail outlets in the designated states after May 20, 2022 unless EPA extends the waiver. Any gasoline meeting the conditions of the waiver that is stored in terminal storage tanks for distribution to retail outlets and wholesale purchaser-consumers may be distributed and sold in subject areas in the designated states until the supply is depleted. Likewise, retailers and wholesale purchaser consumers in these areas may continue selling or dispensing gasoline that meets the conditions of this waiver after May 20, 2022, until supplies in their E15 storage tanks are depleted. FUELIowa believes the temporary waiver will be extended to encompass EPA’s full regulatory control period of June 1 – September15. 

In a parallel action, Iowa Governor Kim Reynolds is leading an effort among Midwest Governors to address RVP parity for E15 in the summer of 2023 and beyond. In a letter dated April 28, 2022, the coalition of Governors are requesting EPA to lower gasoline vapor pressure requirements in their respective states by 1-psi or effectively removing the 1-psi RVP allowance afforded to E10 blends. In their letter, the Governors cite the reduction in evaporation emissions associated with the reduction in gasoline vapor pressure as their justification for the request. Governors from the following states have signed on to the letter: Iowa, Nebraska, Illinois, Kansas, Minnesota, North Dakota, South Dakota, and Wisconsin. Read the full letter here.  

If the request made to the EPA by the coalition of Governors is granted, Iowa’s gasoline supply will be limited in the summer months to gasoline with an RVP which does not exceed 9-psi. With no RVP related waivers available for gasoline blended with ethanol, the theory being put to the test by the coalition of Governors is that refiners and suppliers will respond to the regulatory change by refining and supplying a base gasoline product with an RVP suitable for the addition of both 10 percent or 15 percent ethanol. 

 While FUELIowa supports a national approach to provide RVP parity between E10 and E15, we have great concerns about the impact an act like the one requested by this coalition of Governors will have on gasoline supply and prices. Voluntarily creating a boutique gasoline market in Iowa or the Midwest threatens to disrupt the fungible supply of gasoline throughout the region and it remains to be seen how refiners and suppliers will respond if the EPA grants the request from the coalition of Governors. A quick review of historical pricing shows an increase in price for low-RVP gasoline in comparison to conventional gasoline.