California Clears Path for Higher-Ethanol Fuel Sales Amid Soaring Gas Prices
California Governor Gavin Newsom signed Senate Bill 795 on September 21, allowing the immediate sale of E15, a gasoline blend containing 15% ethanol. This move aims to reduce skyrocketing fuel costs in the state's largest auto market.
The bill removes the final regulatory hurdle for E15 sales in California, which was the only US state where this higher-ethanol fuel blend could not be sold. The measure is expected to benefit ethanol producers and corn growers by opening the nation's most populous state to the higher blend.
According to Eric McAfee, chief executive of renewable fuels producer Aemetis, the change could add about 650 million gallons of annual ethanol demand in California. He estimates that this will result in significant cost savings compared with gasoline in the state, given that ethanol sells wholesale for around $2.30 a gallon.
Average gasoline prices in California were hovering near record levels of about $6.14 per gallon on Sunday, compared with a national average of $4.44 per gallon, according to GasBuddy data. The approval of E15 comes as Congress weighs separate legislation to permit year-round sales of E15 nationwide.