API reverses its course on E15 fuel bill and calls for regulatory fix

The American Petroleum Institute announced on Tuesday that it is opposed to legislation that would expand the year-round sale of E15 gas. This reversal highlights the deepening tensions in oil and ethanol after a short period of cooperation.

In exchange for restrictions to a program that allowed smaller refiners avoid renewable fuel obligations, the influential oil trade group teamed up earlier this year with lawmakers from farm states and ethanol producers in order to support a higher mandate for renewable fuel blends.

E15 gasoline is a 15% blend of ethanol. This is a higher mix than the E10 that's sold in most parts of the country.

API stated that it is not opposed to year-round E15 blend sales, which contain 15% ethanol. However, the API stressed that the bill should be coupled with other measures in order to address the new changes on the fuel market.

API Mike Sommers wrote to legislators in a letter that was seen by. "Any consideration of E15 year-round should reflect the realities of today and not of previous years," API Mike Sommers wrote in a letter to legislative leaders.

Sommers said that the API also wanted more certainty about small refinery waivers from renewable fuel obligations. According to the letter, the waivers disrupted the market and penalized refiners who had already invested in biofuels compliance.

The API also outlined several other issues that it would like addressed. These include federal reversals on state E10 opt-outs during summertime, changes in clean fuel tax credit, and proposed reductions to renewable fuel compliance credits.

The corn and ethanol industry has traditionally sought to increase renewable fuel blends and sell E15 all year round in order to expand the market for ethanol. Oil refiners, however, have opposed mandates because they can disrupt refinery operations and increase compliance costs. (Reporting by Jarrett Renshaw, Editing by Margueritachoy)

(source: Reuters)