BIOFUELS:

EPA signals support for higher blends but delays decision

U.S. EPA said today that it may allow the mixing of larger amounts of ethanol with gasoline, but the agency delayed a final decision on the matter until mid-2010 to allow for additional testing.

In a letter to biofuels advocate Growth Energy, EPA hinted that it is likely to support raising the ethanol limit above the 10 percent allowed in gasoline under current regulations. The agency said two tests it has completed on the 15 percent ethanol blend, known as E15, suggest that engines in newer cars will likely be able to accommodate the fuel.

"Should the test results remain supportive and provide the necessary basis, we would be in a position to approve E15 for 2001 and newer vehicles in the mid-year timeframe," EPA Assistant Administrator Gina McCarthy wrote.

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 petition to raise the blend wall has been opposed by automakers, equipment manufacturers, petroleum refiners and blenders, and environment and public health groups. They have all called for more testing.

Their fear: E15 or other higher blends could degrade older engines, gas pumps and exhaust emission control systems not specifically built to handle more than E10.

Testing thus far has focused on vehicles manufactured in 2001 or later. McCarthy said EPA may approve the higher ethanol blend only for newer cars, noting that the agency is looking into different requirements for fuel pump labeling that could direct consumers to the appropriate gasoline blend for their vehicles.

E15 would likely not be used for smaller engines, such as lawnmowers and boats.

The American Petroleum Industry said it is concerned about EPA granting a waiver for only some vehicles. In a statement released in response to the decision, API spokeswoman Cathy Landry said the agency should assess short- and long-term effects on the entire vehicle fleet.

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