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EPA Sends Proposed Rule for Higher Ethanol-Blend Gasoline to White House

By Humeyra Pamuk

WASHINGTON, March 4 (Reuters) - The U.S. Environmental Protection Agency said on Monday it had sent a draft of its proposed rule allowing year-round sales of higher ethanol blends of gasoline to the White House Office of Budget for review.

The rule expanding sales of so-called E15 was promised by President Donald Trump late last year as a way to help corn farmers, but includes measures sought by the oil industry to curb biofuel credit market speculation.

“We hope to expeditiously propose and finalize the rule consistent with the president’s direction,” EPA spokesman Mike Abboud said in an email to Reuters. Following the interagency process, the proposed rule will be published and put out for public comment before being finalized. Congressional approval is not required.

The process needs to be completed before June 1 to allow for gasoline with a higher blend of ethanol, also known as E15, to be available for summer sales when driving demand picks up.

E15 gasoline contains 15% ethanol, vs. the 10% found in most U.S. gasoline. The ban over the year-round sales of the fuel had been imposed over concerns that E15 contributes to smog in hot weather.

The proposed rule was at the forefront of a brief interagency disagreement last week when Secretary of Agriculture Sonny Perdue said the EPA was not going to be able to finalize the rule on time. He walked back from his comments in a few hours, after speaking with EPA Administrator Andrew Wheeler.

The EPA had planned to release the draft rule in early February but was delayed by a 35 day-long partial federal government shutdown.

Trump said in October he was directing the EPA to allow year-round sales of E15, a victory for the corn industry. Combining the rule with Renewable Identification Number (RIN) market reforms was a concession to the rival oil industry.

Oil and corn industries have been on the opposite ends of a tug of war, and Wheeler has been caught in the middle of pressure from lawmakers representing oil and corn states. Five Republican senators in a letter criticized his biofuels policy last month, briefly raising questions about his confirmation.

Wheeler, who had been in charge of the EPA in an acting capacity since last July, was confirmed by the Senate last week.

Under the U.S. Renewable Fuels Standard, oil refiners have to blend increasing volumes of biofuels into the nation’s gasoline and diesel each year, or purchase credits – called RINs – from those who do.

(Reporting by Humeyra Pamuk; editing by Jonathan Oatis and Peter Cooney)

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