l

Will the EPA’s waiver to allow summer E15 sales lower gas prices?

Recently, the Biden administration announced that it has directed the EPA to suspend a rule barring the sale of gasoline containing 15% ethanol during the summer months. The gas, referred to as “E15” or “Unleaded 88,” is usually allowed only between Sept. 15 and May 31 due to concerns it creates smog in hotter weather.

E15 is approved for use in all cars, trucks and SUVs built in 2001 or later. It is not approved for non-automotive engines like motorcycles, boats and lawn mowers. E15 is only available from about 2,300 gas stations in the U.S., mostly located in the Midwest and South, including Texas.

There was a bipartisan push by lawmakers to get Biden to order the EPA to allow E15 sales this summer due to the price increases attributed to the war in Ukraine. Lawmakers argued that the fuel is less expensive and also a domestic alternative to gasoline, which is priced on a world market.

The Biden administration agreed to take the step. It argues that the move is short-term and won’t have a serious effect on smog. Additionally, the EPA will be working with states to limit any air quality impact.

You may recall that the Trump administration once pushed for year-round use of E15, but a federal court ruled the EPA didn’t have the authority to allow that, except in short-term situations. The Biden administration says that this limited-time waiver of the prohibition should survive the courts.

But will it actually bring gas prices down? The idea is that E15 stretches further than traditional gasoline because it is 15% ethanol. If people switch over to E15 this summer, which they might if it is cheaper, that somewhat reduces the demand for traditional gasoline.

Whatever the effect of summer E15 sales, more oil exploration is expected

Whether or not waiving the rules on E15 will drive down gas prices, it’s clear that the war in Ukraine has limited supply just as demand is about to increase for the summer. This will prompt even more petroleum exploration in the Permian Basin.

Landowners in West Texas and eastern New Mexico are being contacted about leasing or selling their land to developers. If you have been contacted, you may have received a proposed lease or sale agreement from an energy company.

These companies often have the power of eminent domain. That means it could be hard to stop them from leasing or buying the land they want. However, that proposed lease or sale agreement is almost certainly written to benefit the energy company, not the landowner.

Have your own lawyer review and potentially renegotiate the agreement to protect your rights and to ensure you get full, fair compensation for your land. Be sure to hire an attorney with substantial experience in oil and gas law.