Proponents of allowing E15 to be sold year-round argue that it’s the free-market thing to do. They’re partially right — in a true market-based system, government regulations preventing E15, or even E100, from being sold year-round should not exist.
But the Texas-sized problem is that, since the Renewable Fuel Standard was established in 2005, federal regulation governing the fuel market looks more like a command economy flush with mandates than a free-market economy that lets demand drive supply. U.S. refineries are required to blend a set volume of biofuels each year, and if refiners cannot meet that mandate, they must make up the difference by purchasing punitive and costly Renewable Identification Numbers generated by producers of biofuels.
As a result, this boondoggle of a program imposes $70 billion in annual regulatory costs on U.S. refineries, according to an estimate, artificially increasing gas prices and playing a key role in the consolidation of the refinery industry over the past two decades.
CALIFORNIA DEMOCRATS TAKE NO RESPONSIBILITY FOR THE GAS CRISIS THEY CREATED
Next week, the U.S. House is expected to vote on legislation that would exacerbate this problem. While this bill was born out of a valiant, good-faith effort by numerous House members (including me) who served on the speaker’s E15 council, it makes no reforms to reduce the cost of the RFS on U.S. consumers. The legislation, while providing for year-round E15, ultimately strips small refineries — 10% of U.S. refining capacity — of the regulatory relief Congress promised them, accelerating consolidation of the United States’s fuel market to the largest refiners.
Curtailing the small-refinery exemption could shutter the only refineries serving entire states, leaving rural America to pay even higher gas prices in those refinery deserts and making them dependent on long-haul deliveries from distant refining facilities, which creates dangerous single points of failure in our fuel supply.
Fortunately, a true market-based solution exists that can significantly reduce the cost of the RFS and still boost biofuel demand. The Fuel and Strengthen the American Refinery Act of 2026, authored by Rep. Jodey Arrington (R-TX) and me, would allow E15 to be sold year-round, removing arbitrary restrictions that prevent it from being sold during the summer. The legislation also provides regulatory relief to refineries that decide to invest in blending biofuels at their facility — a highly capital-intensive process.
The Fuel STAR Act would also slash regulatory costs for refineries and U.S. consumers through one simple fix in the RFS program. For years, the Environmental Protection Agency has mandated that refiners blend 15 billion gallons of ethanol per year, even though U.S. fuel ethanol consumption has never reached that target. The ethanol industry is now advocating that EPA set even higher ethanol volumes going forward. Since refiners need to purchase additional RINs to make up the difference between the higher ethanol mandate and the lower ethanol demand, the value of those RINs skyrockets, significantly increasing regulatory costs for those refineries without changing the demand for ethanol.
This bill would simply require that the annual ethanol mandate match actual projected ethanol demand. A recent analysis found that this simple fix would reduce the regulatory costs of the RFS by $35 billion — 50% of the program price tag for refineries and U.S. consumers. Best of all, this fix would not impact biofuel demand or negate the positive impacts of allowing year-round E15.
In addition, when small refineries receive regulatory relief from the RFS, the Fuel STAR Act would prohibit the “reallocation” of RIN obligations from small refineries onto larger refineries. Biofuels producers and larger refineries have strongly criticized the practice of some companies owning multiple small refineries to receive exemptions from the regulatory mandate. This bill reasonably addresses this issue by ensuring that mid-sized companies owning multiple small refineries can receive exemptions on only 50% of the barrels of oil produced from these refineries company-wide.
TRUMP IS SLIGHTLY OVER-OPTIMISTIC ON GAS PRICES
This fight to allow year-round E15 and reform the RFS has festered for over 20 years, with biofuels producers, large refineries, and small refineries all fiercely defending their interests. As a result, restrictions on E15 remain in place, and the cost of the RFS keeps ballooning. The Fuel STAR Act provides the framework for a true market-based compromise that would eliminate restrictions on E15 and reduce the regulatory impact of the RFS on the American people.
It’s a win for the biofuel industry. It’s a win for refiners of all sizes. But, most importantly, it’s a win for the free market and the American people who are paying more at the pump. Now is the time to work together to bring a sensible solution.
Nathaniel Moran is a Republican congressman representing Texas’s 1st District.