U.S. Environmental Protection Agency Remains Undecided on Higher Ethanol Blends

Tuesday the U.S. Environmental Protection Agency announced that it needs more time to decide whether to approve an industry request to increase the amount of ethanol blended into gasoline. The Agency signaled, however, that it believes newer American cars could safely handle the higher fuel mix.

The EPA was supposed to decide by Dec. 1 on a petition from Growth Energy filed on behalf of 54 ethanol producers to let gasoline contain up to 15 percent ethanol.

U.S. gasoline is now approved to contain up to 10 percent ethanol, which is made mostly from corn.

The U.S. ethanol industry was hard hit in 2008 by the economic downturn and a drop in crude oil prices to nearly $30 a barrel. Many companies were forced into bankruptcy and a large percentage of production capacity was idled, Reuters reports.

It was also reported, required to respond no later than today to the ethanol group's petition to raise the "blend wall," EPA said it would not decide until the Energy Department completes further tests next year on component durability and the long-term emissions from higher ethanol blends.

But to meet federal renewable fuel mandates, McCarthy wrote, it is "clear that ethanol will need to be blended into gasoline at levels greater than the current limit of 10 percent."

Growth Energy's co-chairman, retired Army Gen. Wesley Clark, hailed the EPA letter as "a strong signal that we are preparing to move to E15."

Facing saturation of their market at today's allowed blending level, ethanol producers have lobbied hard for EPA to allow gas stations to mix more ethanol into petroleum fuels. They continued that push today.

Renewable Fuels Association President Bob Dinneen said EPA should move forward immediately on at least an interim E12 blend. "The delay threatens to paralyze the continued evolution of America's ethanol industry," he said, The New York Times reports.

News agencies also report, Growth Energy said in a statement today that increasing the allowable ethanol blend would create 136,000 permanent U.S. jobs, a contention the Washington-based Environmental Working Group disputed in a study posted on its Web site yesterday.

“If you look at what America can do to help itself most directly, it’s getting itself off of the $200-to-$300 billion dollars a year that we are sending overseas to pay for imported oil, so going to E-15 is a big step in that direction” retired Army general Wesley Clark, Growth Energy’s co-chairman, said in a conference call with reporters today.

Clark expects the Obama administration to approve Growth Energy’s request next year.

Environmental and petroleum-industry groups aligned in opposition to a higher ethanol blend.

“It’s time we recognize that ethanol has been unable to attain independent viability as a motor fuel despite lavish subsides and mandates for use, and even more important, has been unable to prove that its production and use are beneficial to the environment,” said Craig Cox, the Environmental Working Group’s Midwest vice president. He hailed the EPA decision as a sign the agency is giving the matter further scrutiny, Bloomberg reports.

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