The War Between Refiners Over E15 Rises Again This Week In Washington

Gasoline prices are seen at a Exxon gas station in Houston, Texas, on March 31, 2026. (Photo by RONALDO SCHEMIDT / AFP via Getty Images)

AFP via Getty Images

The battle pitting factions of the U.S. refining industry against one another reopens this week in Washington, DC with a House vote on a bill to mandate the sale of E15 gasoline nationally year-round. When I wrote on April 29 about Amendment 289 to the 2026 Farm Bill designed to execute this expansion, I pointed out that it had renewed a long-running split in the refining industry, with the integrated majors and their refining arms on one side, and the independent refiners who produce roughly half of the fuel Americans put in their tanks on the other.

Refiners Take Sides Over E15 Mandate

The amendment – sponsored by Minnesota Republican Michelle Fischbach – pitted the American Petroleum Institute (API) and its big-refiner members, who like the market certainty and downstream retail upside they obtain with ethanol, against the Small Refineries of America, who argued it would strip away statutory protections and accelerate the very refinery closures consumers can least afford.

The House passed the Farm Bill on April 30 without the E15 language, a temporary win for the small refiners. But that didn’t put the matter to rest, merely postponing the language to a stand-alone vote this coming week. API is so enthusiastic about the bill that it made a 6-figure digital ad buy touting it last week in 15 key House districts, as reported by E&E News in Politico Pro. API’s director of policy communications, Scott Lauermann, said the bill represents a “balanced approach to expand consumer choice, strengthen rural economies and provide long-overdue regulatory certainty.”

In response, GOP Reps. Scott Perry of Pennsylvania and Chip Roy of Texas took the other side in an op/ed in The Hill. In the piece, the two congressmen argue that year-round E15 isn’t “lower-cost fuel for consumers,” but a hidden tax and a straight-up gift to the corn-ethanol industrial complex. It’s a gift which has grown so large over the past 20 years that today, fully 1/3rd of America’s annual corn harvest is dedicated to making unneeded fuel rather than bolstering the global food supply.

The Energy Policy Research Foundation estimates the Renewable Fuel Standard adds roughly 30 cents to the price of every gallon of gasoline and diesel produced in the U.S. In part that’s due to the costs of transporting the ethanol via truck since it is too corrosive to move by pipeline and thus must be blended at terminals over which small refiners have no control.

Supply Picture Does Not Support E15 Expansion

As energy analyst John Kemp pointed out on May 7 in a widely shared X post, the timing to place added stress on the U.S. refining sector couldn’t be worse. Since the Strait of Hormuz disruptions began at the end of February, U.S. refined petroleum product stocks (gasoline, diesel, jet fuel and others) have plunged 45 million barrels, the fastest rate of draw on record for this time of year. The ten-year average draw over the same period amounts to just 2 million barrels. Refiners are already running flat-out to meet record export demand while keeping domestic supply from collapsing.

The supply picture has significantly deteriorated since that April 29 piece. U.S. storage of refined products has dropped dramatically as the crisis at the Strait of Hormuz lingers on. Crude oil inventories have followed a similar trend amid a global market that remains undersupplied by roughly 10 million barrels of crude per day. Putting greater stress on small refineries at this moment in time by expanding E15 mandates would arguably be a form of pure policy malpractice.

Inventories are depleted precisely when global supply chains are under maximum stress. The thought of doubling down now on what many consider nothing more than a corporate welfare giveaway to force more ethanol into the mix makes little sense in this environment.

Roy and Perry point out that the Renewable Fuel Standard (RFS) has already extracted roughly $164 billion from American drivers over the past decade in the form of higher pump prices and RIN (Renewable Identification Number) credit costs that refiners must buy and pass along. For many independent refiners, RFS compliance expenses now exceed payroll and operating costs combined. The congressmen further point out that the final mandated gallons of ethanol are being rammed into the market at an absurd effective cost of $770 per gallon, according to the EPA’s own modeling, while the agency projects another $6.7 billion in societal costs from the latest volume obligations.

“This isn’t an energy policy,” the congressmen write,” it’s a corporate bailout.”

Small refiners don’t own ethanol plants. They don’t have captive RIN generation like the majors. They can’t simply blend their way out of the mandate the way a vertically integrated giant can. Every additional E15 mandate is another hit to the very facilities Congress claims it wants to protect when it talks about “energy security” and “keeping prices down.”

E15 Expansion: A Political Need To ‘Do Something’

The Perry-Roy piece calls this pending vote a backdoor expansion of one of the most costly and destructive federal mandates in U.S. history. Without the RFS, the market would largely stick with E10. The additional blending driven purely by the mandate is minimal — just 0.34% beyond what economics would dictate. Yet the compliance burden falls disproportionately on smaller, independent operators who lack the scale or political muscle of the majors.

Big refiners and the ethanol lobby contend that E15 helps farmers and lowers prices at the pump. But the lower pump price is illusory, a mirage created by the RFS’s Rube Goldberg-like system of mandates and subsides which socialize the higher refining costs across all gasoline types. Those whose engines can take the E15 without being damaged win, everybody else loses.

Lawmakers who claim to care about energy affordability and domestic manufacturing capacity have a choice this week: Keep taking more and more farmland out of the food system and distorting energy and agricultural markets by feeding this E15 mandate machine, or take a step back from what increasingly looks like a classic case of congress passing bad policy out of a perceived need to “do something” about a problem. History shows that latter impulse almost always makes the targeted problem far worse.