This week the Biden Administration released its latest plan to help alleviate high-cost gasoline prices caused by policies of the Admistration itself, along with policies dating back to the beginning of the 21st century when oil began its economy-compromising spike. According to the White House fact sheet, a main feature of the proposal includes issuing an emergency waiver that will allow for the use of E15 (gasoline that includes a 15% blend of ethanol) during summer months.
This biofuel waiver is nothing more than a publicity stunt. The Biden Administration is simply attempting to look like it's doing something–taking the shiny object approach–to alleviate the harm brought to American families with crushing inflation and subsequently higher energy costs.
E15 is a part of America’s oil and gas supply, but there is some important history and context missing from the White House announcement. In 2019, the Trump administration proposed to permanently lift the E15 summer ban and allow for its sale throughout the year. The purpose of this action was to increase energy independence, cut unnecessary regulations and expand the use of biofuels.
At the time, Democrats and their allies at the New York Times accused the Trump administration of adding smog. While it's true the use of E15 produces a higher rate of evaporative emissions that can create more smog during the summer months when the air is heavier, the impact to the environment is negligible. Nevertheless, these same critics will likely be silent now that the Biden administration has embraced this Trump-era policy.
In their release, the Biden team proudly announced that 2,300 gas stations will be able to take advantage of this waiver nationwide. To put this in context, there are 115,000 gas stations nationwide. So doing the simple math, less than 2% of all stations are in a position to actually take advantage of this action. Just as the air emissions' impact is likely to be negligible, so too will the impact on price.
It’s an absurd reality that at this point, the Biden administration has proposed just about every possible solution except for the obvious and most effective one–to invest in and unleash U.S. oil and gas production. The Biden team has instead sought help from energy rich authoritarian regimes–Iran, Venezuela and OPEC to name a few. They have spent considerable resources begging these regimes to pump more oil when they could have gone to Texas.
Prior to the Russian invasion of Ukraine, they had green lit the Nordstream 2 pipeline which was a massive boost to Putin’s power hold over our European allies. Instead, President Biden could have approved the Keystone XL Pipeline which would have been the first pipeline powered by renewables and an important strategic asset to our national energy system.
President Biden has also imposed a barrage of regulatory red tape on American companies that is increasing the cost of doing business while producing little tangible benefit. Early on in his administration, Biden’s top officials released their Spring Regulatory Agenda–a formal regulatory roadmap–that promised to propose 6 new regulations every month from the U.S. Environmental Protection Agency alone. Beyond the upfront costs of compliance, this agenda sent signals to market allocators to withhold investment from the industries subject to new government mandates, mainly coal, oil, natural gas and other energy intensive operations. Instead, he could have continued the balanced approach that saved the economy billions, injected optimism and produced massive growth in U.S. companies, while keeping our nation’s air, water and soil clean at record-breaking levels.
Finally, President Biden continues to call for more releases from the U.S. Strategic Petroleum Reserve. This may provide some short-term price relief but will cause more problems in the long run as he drains an important security reserve to address his own political problems.
Perhaps the only beneficiaries of this E15 move will be corn-centric states, but if the Biden administration were serious about helping out our nation’s farmers, he would work to alleviate the farm-crushing costs of diesel. Farmers have seen a 40% increase in the cost of diesel and are increasingly warning that the price of operation is significantly outpacing the costs they will recoup.
President Biden needs to stop teasing the American public with fake solutions to the very real problems they are facing. With record high gas and runaway inflation, there are numerous tools at the president’s disposal he could activate to meaningfully provide relief. Unfortunately, we’ve yet to see any serious solutions materialize.
