White House Considers Waiving Smog Rules on Gasoline to Lower Pump Prices – Sources, By Reuters

By Jarrett Renshaw and Stephanie Kelly

The White House is considering a waiver for U.S. gasoline environmental regulations designed to reduce summertime smog, in an effort to address rising fuel prices, according to multiple sources involved in the discussions.

Currently, refiners and blenders are prohibited from using cost-effective components such as butane in summer gasoline. The administration is contemplating suspending this requirement to help lower fuel costs. These components increase gasoline’s Reid vapor pressure (RVP), which can contribute to smog, especially during the warmer months.

President Joe Biden’s administration has previously lifted the restrictions on summer sales of E15, a lower-priced gasoline with a higher ethanol content. The potential waiver would apply to all grades of gasoline, although no final decision has been reached yet.

The White House did not immediately respond to requests for comments. Various external groups, particularly governors, have been advocating for the issuance of the waiver.

Addressing inflation and high gas prices has become a top priority for Biden ahead of the congressional elections in November. Republicans have targeted Democrats on this issue, prompting the administration to consider a wide array of options to combat rising prices.

In related market movements, U.S. gasoline futures fell over 4% in post-settlement trading, reaching as low as $3.6314 a gallon, before easing further following reports of the possible waiver.

The average price of a gallon of regular gasoline has increased by 50% over the past year, now exceeding $4.59 nationally, according to the American Automobile Association. Ten states and the District of Columbia are already seeing prices exceed $5 per gallon, with California’s average exceeding $6.

The sale of summer-blend gasoline, which is mandated from June 1 to September 15, is part of the Clean Air Act’s amendments established in 1990. Historically, the U.S. government has waived these requirements in response to events like hurricanes and supply challenges.

Former President Donald Trump’s administration suspended summer gasoline regulations for a limited period in May 2020 due to a significant decrease in gasoline demand prompted by the COVID-19 outbreak. Last August, the Biden administration issued a waiver on RVP requirements for Louisiana and Mississippi following Hurricane Ida.