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Ethanol Interests Wait for EPA Decision on E15

posted on September 30, 2010

With the mid-term elections looming on the horizon, Congress adjourned this week as many lawmakers ventured beyond The Beltway to hit the campaign trail.

They're scheduled to return for a lame-duck session briefly before the holidays, when they're expected to consider whether to extend the so-called Bush Tax Cuts.

Ethanol proponents also want Congress to spare the Blender's Credit, a 45-cent per gallon tax incentive currently set to expire at the end of this year. The subsidy was instrumental in bringing the fledgling ethanol industry out of obscurity and into prominence over the past decade.

In recent months, several economists have stated the ethanol industry no longer needs the tax credit to survive. But the ultimate survival and expansion of the ethanol industry may hinge on a ruling by the Environmental Protection Agency. A decision it has delayed several times in the past

Ethanol Interests Wait for EPA Decision on E15

The Renewable Fuels Association, or RFA, has stated the amount of ethanol used by U.S. drivers is stagnating. Known as the "blend wall", U.S. ethanol companies currently produce enough of the predominately corn-based fuel to cover domestic consumption.

Officials with the RFA and Growth Energy, another ethanol promotion group, want the EPA to approve an increase in the amount of ethanol from E10 -- a 10 percent blend of ethanol and 90 percent gasoline -- to E15 -- a mix of 15 percent ethanol and 85 percent gasoline. Representatives of both groups say the expansion will ensure U.S. energy security, reduce air pollution and create more jobs.

Over the past year, a decision on increasing the amount of ethanol in gasoline has been delayed twice by the Environmental Protection Agency, or EPA. Testing delays by the U.S. Department of Energy have contributed to the regulatory holdup. Depending on the results, the EPA is expected to approve a blend rate increase for cars built either after 2000 or 2007.

Officials with the RFA say there is enough data to support a higher blend for vehicles older than 2000 and have accused the government of foot-dragging. The Washington-based group has cited volumes of data in the past to support its position and point to new research showing E15 can be used in vehicles more than 15 years old. The study, commissioned by the RFA, proves cars and light trucks as old as the 1994 model year can burn the higher blend without causing any engine damage.

Critics, including the Boat Owners Association of the United States, still believe the EPA should postpone its decision and have asked for further testing.

The EPA is expected to make a final decision by either mid-October or early November of this year.


Tags: biofuels Environmental Protection Agency ethanol news renewable fuels