Ethanol is made from corn and other crops and has been mixed into some types of gasoline for years as a way to reduce reliance on oil. But the blend’s higher volatility can contribute to smog in warmer weather. For that reason, environmental groups have traditionally objected to lifting the summertime ban, as have oil companies, which fear greater use of ethanol will cut into their sales.
How much the presence of ethanol holds down fuel prices has been a subject of debate among economists. Some experts said the decision is likely to reap larger political benefits than financial ones.
“This is still very very small compared with the strategic petroleum reserve release,” said David Victor, a climate policy expert at the University of California, San Diego. “This one is much more of a transparently political move.”
Corn state lawmakers have been urging Mr. Biden to fill the gap created by the United States ban on Russian oil exports with biofuels.
Oil refiners are required to blend some ethanol into gasoline under a pair of laws, passed in 2005 and 2007, intended to lower the use of oil and the creation of greenhouse gases by mandating increased levels of ethanol in the nation’s fuel mix every year. However, since passage of the 2007 law, the mandate has been met with criticism that it has contributed to increased fuel prices and has done little to lower greenhouse gas pollution.