The US EPA has sent a request to the White House to expand ethanol from the Midwest, via Reuters

© Reuters. A general view of the White House in Washington, U.S., August 27, 2023. REUTERS/Julia Nikhinson/File photo

By Stephanie Kelly

NEW YORK (Reuters) – The U.S. Environmental Protection Agency has asked the White House to approve a rule that would allow gasoline with higher ethanol content to be sold in some Midwestern states after a request from those states’ governors.

The application was put on hold after the oil industry warned the Biden administration that allowing E15, or gasoline with 15 percent ethanol, in select states would lead to supply chain problems and therefore higher gasoline prices.

Inflation and the health of the economy are key vulnerabilities for President Joe Biden’s 2024 re-election bid.

The EPA proposed in March that E15 could be sold year-round in Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin after the states requested it. Late Monday, she sent the proposal, which includes an effective date for all states of April 28, 2024, to the White House for final consideration.

, a domestic alternative fuel produced most often from corn, is cheaper by volume than gasoline. Adding it to the fuel mix can also lower prices by increasing overall supply.

But the US government restricts the sale of E15 gasoline in the summer months due to environmental concerns about smog.

The ethanol industry has pushed for years to lift restrictions on E15 sales nationwide, arguing that the environmental impacts have been overstated.

Meanwhile, oil refiners including HF Sinclair Corp and Phillips 66 (NYSE: ) warned that a convoluted approach to approving E15 sales would complicate fuel supply logistics and increase the risk of spot supply shortages.

Ethanol groups say they favor a statewide legislative fix to allow E15 sales to expand over a regional approach.