California Governor Gavin Newsom on Friday gave a surprise boost to the ethanol industry by issuing a directive to the California Air Resources Board (CARB) to accelerate studying how California could increase ethanol blending in gasoline to allow the sales of E15.

“There’s massive potential for this to be a win-win for Californians: lowering gas prices by up to twenty cents per gallon while keeping our air clean. It builds on our efforts to keep gas prices low by holding Big Oil accountable and helping prevent price spikes at the pump,” said Newsom.

The Renewable Fuels Association immediately praised Gov. Newsom for taking this action since California is the only state in the country that bans the sale of lower-cost, lower-carbon E15. “Not only does E15 reduce greenhouse gas emissions and harmful tailpipe pollution, but it also delivers significant savings at the pump,” said RFA President and CEO Geoff Cooper. “Allowing the sale of E15 would provide economic relief to California families, while at the same time providing important environmental benefits.”

Gov. Newson cited a recent study conducted by the University of California, Berkeley and the United States Naval Academy, showing that just allowing the sale of E15 could lower gas prices in California by up to $0.20 per gallon and save Californians as much as $2.7 billion annually. That study was sponsored by the Renewable Fuel Association. “Consumers would save about $200 per household there,” said RFA Chief Economist Scott Richman who contributed to the study. “And it would be low income households that would benefit the most from this.”

Listen to an interview with Richman about the study:
RFA Chief Economist Scott Richman 6:38