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EPA Delays Decision on E-15

posted on December 3, 2009

As Christmas bargain hunters enjoy ever-present Holiday music at the nearby shopping mall, fresh economic data also is bringing SOME yuletide cheer.

Federal number crunchers revealed this week that U.S. payrolls trimmed 11,000 jobs in November – the lowest monthly job losses since December 2007 and more than 100,000 below previous estimates.

The nation's unemployment rate dropped for only the second time in more than 13 months. The national figure fell back to a symbolic 10 percent after reaching a 26-year high of 10.2 percent in November.

Economists hoping for signs of recovery also point towards an increase of 55,000 temporary workers in November – the largest jump in more than five years.

The rosier employment figures sent the Dow Jones Industrials into a see-saw session ending in positive territory for the week.

Back in Rural America, various business leaders have tried to jumpstart economic recovery by lobbying lawmakers to boost a critical federal mandate. Ethanol blends of 10 percent have been a mainstay at gas pumps for years. But a push by ethanol producers and rural politicians has forced the Environmental Protection Agency to decide if E15 is a safe and viable option for American consumers.


EPA Delays Decision on E-15

After waiting nine months for an answer, U.S. ethanol producers received what they are calling positive news from the Environmental Protection Agency this week. Though not a mandate, the EPA has delayed a crucial decision on increasing the ethanol blend rate leaving the door open for expansion of the biofuels industry.

In March, 54 ethanol plant owners signed on to a request by Growth Energy, an ethanol promotion group, asking the EPA to increase the ethanol blend rate from E-10 -- a mix of 10 percent ethanol and 90 percent gasoline -- to E-15. Despite the lack of a definite verdict, Tom Buis, CEO of Growth Energy, called the decision a good one for farmers and ethanol producers. According to Buis, EPA authorization would promote construction of an additional seven billion gallons of capacity.

Ethanol industry expansion is necessary to satisfy the federal biofuels mandate of 36 billion gallons of renewable fuels by 2022. Without a blend-rate increase the industry will likely reach a so-called blend-wall blocking any monetary incentive to build more refineries.

EPA scientists say preliminary data shows cars and light trucks built in 2001 appear to be the oldest models able to handle E-15. If approved, labels would be placed on gas pumps warning older automobile, small engine and boat owners about the higher blend.

Bob Dinneen, President and CEO of the Renewable Fuels Association, an ethanol promotion group, lambasted the delay saying it "threatens to paralyze the continued evolution of America's ethanol industry." Dinneen wanted EPA to approve an increase to E12 until a final decision is made.

Several groups have objected to the increase citing everything from increased food costs to destruction of the Amazon rain forest. The National Cattlemen's Beef Association, or NCBA, remains dead-set against the idea. NCBA spokesman maintain an independent and comprehensive study should be conducted to determine what effect an increase in ethanol use would have on corn and cattle markets.

EPA officials stated they would make a final decision sometime in the middle of 2010. The process to design warning labels has already begun.


Tags: biofuels Environmental Protection Agency ethanol news