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As inflation soars, Biden turns to ethanol to lower gas prices

The president's announcement of the new plans came just hours after the Labor Department said the country had just experienced the highest rate of inflation in 40 years.

WASHINGTON — President Joe Biden announced plans Tuesday aimed at boosting the production and sale of ethanol-blended gasoline as his administration looks for ways to alleviate pain at the pump amid skyrocketing inflation. 

Speaking from Iowa, a state responsible for producing much of the country’s ethanol, Biden said the Environmental Protection Agency would issue an emergency waiver that would suspend a summer ban on the use of a specific blended fuel.

Biden’s remarks came just hours after the Labor Department said the country had experienced the highest rate of inflation in 40 years last month, driven primarily by gas prices along with increases in the price of groceries, rent and new cars.

White House officials, who had said they were bracing for a high number, have blamed the increasing inflation on a spike in gas prices following Russian President Vladimir Putin’s war in Ukraine.

“Your family budget, your ability to fill up your tank, none of it should hinge on whether a dictator declares war and commits genocide half a world away,” Biden said.

At current prices, the administration’s move on ethanol would lower prices by about 10 cents a gallon at the 2,300 gas stations in the country that offer the ethanol-blended fuel, the White House said. While ethanol burns faster, requiring people to refuel more frequently, the White House said there would still be substantial savings.

"It's not going to solve all our problems, but it's going to help some people," Biden said. "I’m committed to whatever I can to help even if it’s an extra buck or two in the pocket when they fill up, it makes a difference in people’s lives."

“We've seen gas prices increase anywhere from 80 cents to $1 since President Putin invaded Ukraine, and that is certainly having a significant impact on the pocketbooks of Americans across the country," said White House press secretary Jen Psaki Tuesday.

Average gas prices have soared to more than $4 a gallon in recent weeks. Biden announced plans late last month to release about 1 million barrels of oil a day from the Strategic Petroleum Reserve for six months to curb price hikes in what he called a “wartime bridge.”

The emergency waiver will apply to what is known as E15, which is 15 percent ethanol and 85 percent gasoline. In previous summers, sales of E15 have been prohibited in most of the country during the summer because of EPA restrictions on gasoline-related air pollution.

The announcement was likely to please some Republicans and Democrats in the Midwest. A bipartisan group of senators led by John Thune, R-S.D., and Dick Durbin, D-Ill., recently urged Biden to allow the year-round sale of E15 fuel to help drive down fuel costs for consumers.

But the waiver is also likely to raise air quality concerns. A peer-reviewed journal of the National Academy of Sciences issued a report in February that found that the carbon intensity of corn ethanol produced under the Renewable Fuel Standard was “no less than gasoline and likely at least 24 percent higher.”

However, an Argonne National Laboratory study published last year found that using corn-based ethanol instead of gasoline slimmed the life cycle of greenhouse gas emissions on average by 40 percent, senior administration officials told reporters, adding that the agency’s own analysis did not indicate that the emergency waiver was likely to harm air quality.

“The focus here is also on making sure that we are meeting the near-term energy supply emergency and doing so by leveraging homegrown fuels,” an official told reporters ahead of the announcement.