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Why Biden’s plan for cheaper gas means more smog



President Joe Biden is all in a new scheme to reduce gasoline costs. It turns out that moving is also likely to make the air dirtier.

Biden is planning to expand sales of higher-than-usual ethanol fuel during the summer months. Most US fuel stations already carry gasoline mixed with about 10% ethanol, which is made from corn. But this summer, more drivers will be able to fuel their cars with E15 – 15 which stands for 15% ethanol.

E15 is generally not sold in parts of the United States during the summer months because it is thought to be a more volatile mixture, releasing more particles that lead to air pollution. That’s a particular problem in the summer when increased heat and light interact with the particles to create more smoke.

The move speaks to Biden’s tight grip as he tries to calm inflation that is at a 40-year high. President, who campaigned with promises to fight climate change. In addition to the E15 plan, Biden has also called on OPEC+ producers and the United States to boost oil production.

Rebecca Babin, senior energy trader at CIBC Private Wealth Management, said in an interview with Bloomberg TV, Biden’s expansion to E15 will have the biggest impact in the Midwest, where prices could fall as much as 10 cents.

But other than that, the results are expected to be rather minimal, including because few fuel stations can provide the E15 blend.

The limited price impact from the E15 plan could prompt the administration to look for more ways to reduce fuel costs. Some of his other choices may also be seen by climate advocates as a step backwards.

One of those options is to cancel federal renewable fuel blending mandates.

The current program, known as the Renewable Fuel Standard, requires gasoline and diesel oil blended with renewable, lower-carbon fuels. Maintaining the requirement is a key component of the Biden administration’s efforts to reduce the country’s dependence on fossil fuels.

But this mandate also increases costs for refineries. Waiver of this requirement could lead to cheaper gas prices. And Biden is currently facing several requests to reduce the blending target for 2022, which is expected to be completed by June.

Another move that could potentially reduce the cost of gasoline is to enact exemptions to allow volatile gasoline into the atmosphere to be sold during the summer.

The EPA currently setting Reid vapor pressure standards to limit warm weather emissions. The RVP waiver – commonly used to increase supplies during emergencies like hurricanes – would allow a larger amount of gasoline components to enter the finished fuel, such as butane.

Of course, this move will also increase emissions, while having a limited impact on pump prices. Low-grade summer RVP gas prices but a few cents/gallon cheaper than premium RVP frozen gasoline, based on wholesale market prices.

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