New California Law Allows Gas With More Ethanol to Prevent Price Spikes

A new blend of up to 15 percent ethanol could save the state’s drivers an estimated $2.7 billion each year, one study found.

A gas station in Los Angeles on March 24, 2025. John Fredricks/The Epoch Times

California Gov. Gavin Newsom signed into law a bill temporarily allowing a new gasoline blend to be sold in the state to avoid future gasoline price spikes as two refineries in the state prepare to close, he announced on Oct. 2.

“Thanks to our work with the Legislature, we have averted billions of dollars in higher costs at the pump by avoiding the kinds of severe gasoline price spikes we saw a few years ago,” Newsom said in a statement.

Assembly Bill 30 allows retailers in the state to immediately start selling E15, which contains 10.5 percent to 15 percent ethanol, while regulators finalize the rule-making process.

A study conducted by the University of California at Berkeley and the U.S. Naval Academy estimates the new blend could save California drivers $2.7 billion each year.

The fuel can continue being sold until the California Environmental Policy Council completes its review of the blend and the state board either adopts a regulation to officially allow it to be sold, or publishes an assessment demonstrating the blend doesn’t meet state requirements.

The California Air Resources Board (CARB) indicated it hoped to complete a review of the E15 blend this year, according to a legislative analysis.

California drivers are currently allowed to buy gasoline with 10 percent ethanol by volume, which continues to be the standard blend nationwide.

In the summer, California gas retailers must use a special blend required only in-state. This oxygenated blend, known as California Reformulated Gasoline, is more complex to produce and adds to the cost of gas, but is more environmentally friendly, according to state regulators.

The new blend, E15, is already sold in 31 states, according to the legislative review.

The governor directed CARB to speed up its research on how California could increase ethanol blending while maintaining the state’s strict environmental standards.

Authorizing the use of E15 reduces the state’s dependence on petroleum and helps to avoid gasoline price spikes and costs to consumers at the pump, according to the governor’s office.

Newsom added: “While we continue the critical work to stabilize our state’s fuel market, we’re cutting red tape to provide consumers with more options as we continue our transition to cleaner transportation.”

Customers use a gas station in Inglewood, Calif., on March 25, 2025. Starting Oct. 2, California retailers can sell the E15 blend, which is expected to reduce gas prices. John Fredricks/The Epoch Times

Stabilizing the market in California has become a challenge partly because a Phillips 66 refinery in Los Angeles announced it would close by the end of this year, and a Valero refinery in Benicia announced it would close by the end of 2026.

The bill allowing E15 was sponsored by the California Problem Solvers Caucus, a bipartisan group of legislators who said they are committed to putting people over party. The bill’s author and cochair of the caucus, Assemblyman David Alvarez (D-San Diego), said the bill can help reduce gas prices.

“AB 30 is an example of how we can solve problems thoughtfully in California,” Alvarez said in a statement. “By authorizing the sale and use of E15 gasoline, we can reduce the cost of gas and maintain our commitment to a cleaner environment.”

Coauthor of the bill Assemblyman Heath Flora (R-Ripon) said the law was long overdue.

“California drivers have been hurting while bureaucratic delays kept cheaper fuel options off the market,” Flora said in a statement. “Now, thanks to this bipartisan effort, E15 fuel will finally be available—helping working families save money every time they fill up.”

CARB released a study in April that found the E15 blend emitted less pollution than E10 and reduced the carbon intensity of the fuel supply. The study was conducted by researchers at the University of California at Riverside and funded by CARB.