Congress Has a “Quick Fix” for Astronomical Gas Prices. Energy Analysts Say It Could Make Things Worse.
- E15 15% ethanol fuel — the proposal would allow year-round sale nationwide, removing current summer restrictions — Daily Caller
- Small Refinery Exemptions — the E15 proposal strips these permanently, which critics say could force independent refinery closures — Daily Caller / Nick Loris
- 18.4¢/gal federal gas tax — the Gas Prices Relief Act (S.4032/H.R.7919) would suspend this temporarily through Oct. 1, 2026 — Congress.gov
- Two separate bills approaching high gas prices from opposite directions — E15 mandate vs. temporary tax suspension — Congress.gov
Congress is moving on two separate proposals to address elevated gas prices — and at least one of them, energy analysts argue, would make fuel more expensive rather than cheaper. The E15 year-round proposal sounds pro-consumer. The mechanism that makes it work could close refineries.
The proposal moving through Congress would permanently allow E15 — fuel with 15% ethanol content — to be sold year-round nationwide. Currently, E15 cannot be sold during summer months in many markets due to volatility concerns. Proponents argue year-round E15 would increase fuel supply, support corn farmers, and lower prices at the pump.
The problem, according to Daily Caller’s energy analyst Nick Loris: the current legislative text strips Small Refinery Exemptions permanently as part of the deal. Small refineries depend on those exemptions to remain viable. Remove them, and the economics of operating a small independent refinery — which compete against vertically integrated oil majors — deteriorate sharply. The result could be refinery closures, reduced domestic refining capacity, and higher gas prices.
E15 Year-Round Proposal: Permanently expands ethanol mandate; strips Small Refinery Exemptions; could reduce domestic refining capacity and raise prices long-term.
Gas Prices Relief Act (S.4032 / H.R.7919): Temporarily suspends the 18.4¢/gal federal gas tax through October 1, 2026. Introduced by Sen. Kelly (D-AZ), Sen. Blumenthal (D-CT), and Rep. Pappas (D-NH). Requires oil producers to pass savings to consumers.
The problem with the gas tax suspension: 18.4¢/gal savings on a $3.50/gal price = a 5.3% discount. Significant at scale, but temporary. The second any emergency designation expires, the tax comes back and prices reset.
Gas prices are politically toxic. When prices spike, both parties rush to introduce legislation that looks responsive — regardless of whether the underlying policy will work. The gas tax holiday has been proposed, passed, and allowed to expire multiple times over the past decade. Each time, the price relief is modest and temporary. Each time, it makes good press releases.
The E15 proposal is more complex — it has genuine industry support from corn ethanol producers and their congressional delegations, and it does expand supply. But the trade-off on Small Refinery Exemptions is a detail that doesn’t fit in a press release, which is why analysts like Loris are highlighting it: the mechanism that makes the deal politically viable for the ethanol lobby may be the mechanism that makes fuel more expensive for everyone else.