Obama adviser unsure of car plan's ethanol impact

NEW YORK Tue May 19, 2009 3:13pm EDT

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NEW YORK (Reuters) - President Barack Obama's assistant on energy and climate change said on Tuesday she did not know how a tough White House plan to raise the fuel economy of the U.S. car fleet would affect the ethanol industry.

"I don't know the answer to that," Carol Browner told reporters in a teleconference about the plan.

She said modelers had looked at the issue, but she did not know the answer offhand.

Obama obliged the struggling auto industry to make more fuel efficient cars on Tuesday by imposing standards on tailpipe emissions and increasing gasoline mileage. Under the plan passenger vehicles and light trucks must average 35.5 miles per gallon by 2016.

Analysts said the plan could restrain development of the ethanol industry in coming years because the alternative fuel has a lower energy content than gasoline. Specially built "flex fuel" cars typically get 20 to 30 percent fewer miles per gallon when they burn a mix of 85 percent ethanol and 15 percent gasoline, according to the government website www.fueleconomy.gov.

The struggling ethanol industry has suffered a string of bankruptcies over the last year amid volatile prices for corn, which is the main input cost for distillers, the credit crunch, and as the recession hits motor fuel demand.

(Reporting by Timothy Gardner, editing by Marguerita Choy)

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