The Trump administration has announced a temporary waiver of the Clean Air Act (CAA), intended to provide relief to California drivers by lowering gasoline prices. The waiver, issued by the Environmental Protection Agency (EPA) in conjunction with the Department of Energy (DOE), will permit a different blending of E10 gasoline, which contains 10% ethanol.
Effective September 1, the waiver allows E10 to be blended at a higher Reid Vapor Pressure (RVP). This change reduces the amount of gasoline needed in the blending process, aiming to increase supply and subsequently decrease prices. The waiver also facilitates an earlier conversion to the winter blend of gasoline, which is generally less expensive and burns slower than the summer blend.
Normally, the summer gasoline blend is phased out nationwide by September 15. However, California has historically been required to produce its summer blend for a longer period, extending until October 31. The EPA's waiver could allow the state to utilize the more cost-effective winter blend for an additional two months.
Critics, particularly environmental groups, are expected to oppose the waiver. However, the EPA stated that the waiver was reviewed and deemed permissible under discretionary powers granted by Congress. The waiver comes amid ongoing efforts by the Trump administration to increase fuel supplies and lower costs, which have at times been at odds with California officials' policies.
California Governor Gavin Newsom and the state legislature have pursued policies aimed at increasing the cost of gasoline, including raising taxes and facilitating refinery closures. During Governor Newsom's tenure, three oil refineries have closed, with two more slated to shut down, representing 18% of the state's refining capacity. These closures could potentially limit the impact of the federal waiver on California's fuel market.
Furthermore, California's practice of blending most of its gasoline within state borders, due to stringent environmental requirements on fuel, may also diminish the benefits of the national blend changes. The state's reliance on external oil sources, historically from the Middle East, has been noted as a point of comparison to its current energy policies. The Trump administration's strategy is focused on increasing domestic gasoline supply, a direct contrast to the closures occurring within California.