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EPA Extends Higher Blend Rate to More Vehicles

posted on January 21, 2011

Last week, the Commodity Futures Trading Commission approved plans limiting speculative trading of oil, food products and other commodities.

The restrictions are aimed at Wall Street firms and others who trade to profit from swings in market prices. Agricultural companies, airlines and others who use futures trading to hedge against price changes would not be affected.

Though often maligned, speculators play a valuable role in futures trading, bringing much-needed liquidity to the marketplace. And grain markets these days certainly contain plenty of speculative traders.

Regardless of their motivation, hedgers and speculators alike took note Friday, when EPA approved increased blends of ethanol for use in vehicles made in 2001 and beyond.

EPA Extends Higher Blend Rate to More Vehicles

The blend of 15 percent ethanol and 85 percent gasoline, has now been declared safe for vehicles built between 2001 and 2006. Last October EPA approved the same mix, but only for vehicles built after 2007.

Ethanol industry groups were pleased with the decision. Renewable Fuels Association President Bob Dinneen said, "Today's decision green-lights the use of E15 for nearly two out of every three cars on the road today and further proves ethanol is a safe, effective fuel choice for American drivers."

Tom Buis, CEO of Growth Energy called the EPA announcement a bold move forward that would change America's energy future for the better. Buis stated that the, "Increased use of ethanol will strengthen our energy security, create U.S. jobs, and improve the environment by displacing conventional gasoline with a low-carbon fuel."

While proponents favor raising the amount of ethanol sold in gasoline, some automakers, oil refiners and environmental groups have fought any increase. Craig Cox, the Midwest Vice-President of The Environmental Working Group, criticized EPA's decision, saying: "It seems like corn growers and the ethanol industry are the only real winners here."

EPA says there will not be a decision any time soon to boost the blend rate for cars and light trucks manufactured prior to 2001.


Tags: biofuels Environmental Protection Agency ethanol news