American Petroleum Institute changes course on E15 gasoline bill, wants regulatory fixes

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Oct 21 (Reuters) - The American Petroleum Institute said on Tuesday it opposes legislation to expand year-round sales of E15 gasoline, a reversal that underscores deepening tensions between the oil and ethanol industries after a brief period of cooperation.

The influential oil trade group earlier this year had teamed up with farm-state lawmakers and ethanol producers to support higher renewable fuel blending mandates and a December legislative push for year-round E15, in exchange for restrictions on a program that allows smaller refiners to skirt renewable fuel obligations.

E15 gasoline contains 15% ethanol, a higher blend than the typical E10 sold across the country.

The API said it does not oppose year-round E15 sales of the blend containing 15% ethanol on their own, but stressed the bill must now be paired with other measures that address new changes in the fuel market.

"Refiners are now navigating shifting federal compliance structures, a patchwork of state mandates, and a biofuels marketplace that is uncertain," API Mike Sommers wrote in a letter to legislative leaders seen by Reuters. "Any legislative consideration of year-round E15 should reflect today’s realities and not those of prior years."

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Sommers also said the API wanted more certainty around small refinery exemptions to renewable fuel obligations, saying the waivers disrupt the market and penalize refiners who have already invested in biofuel compliance, according to the letter.

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Corn and ethanol producers have traditionally pushed for higher renewable fuel blending and year-round E15 sales to expand markets for ethanol, while oil refiners have resisted mandates that increase compliance costs and disrupt refinery operations.

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