Under current state policy, gas sellers are required to add either 8 cents or 6% to the price of a gallon of gas, and can face civil and even criminal penalties for not doing so.
The oil refining industry has traditionally balked at efforts to expand the ethanol market because it competes with gasoline at the pump and can be costly to blend.
The EPA enforces a summertime ban on E15 over concerns it contributes to smog in hot weather, though research has since shown the 15% blend may not increase smog relative to the more common E10 sold year-round.
The average cost of a retail gallon of gasoline hit $4.374 early Tuesday, according to the American Automobile Association, surpassing the former record of $4.331.
The United States is considering yet another massive release — of up to 180 million barrels from the Strategic Petroleum Reserve over months — to stave off consumer energy inflation, according to sources.
Publicly, White House officials have said all options are on the table. Privately, officials say all the options are politically complicated and none of them may actually lower gas prices much.