U.S. gov't eases pollution rules at ethanol plants

By Tom Doggett

WASHINGTON (Reuters) - The U.S. government said on Thursday it would allow corn milling facilities that make ethanol for fuel to spew more pollution before certain clean air rules are triggered, which could boost available ethanol supplies for blending into gasoline.

U.S. ethanol is produced at corn milling plants for use as a fuel additive in gasoline or for human consumption in liquors. However, the facilities have different emission rules depending on the type of ethanol they produce.

The Environmental Protection Agency issued a final rule to treat the different ethanol producing plants the same when it comes to air pollution.

Facilities that make ethanol for fuel will be to emit up to 250 tons of polluting emissions a year, more than the double the current 100-ton limit, before clean air regulations that restrict production kick in.

That matches the 250-ton limit allowed for plants that make ethanol for human consumption.

The difference between ethanol for fuel and ethanol for human consumption is that a small amount of gasoline or solvent is added to the fuel ethanol to make it undrinkable and the process does not use food-grade equipment.

In sweeping energy legislation passed two years ago, Congress required ethanol use to gradually increase to 7.5 billion gallons a year by 2012 to help reduce U.S. petroleum imports and cut greenhouse gas emissions.

During this summer's peak driving season, the Energy Department is forecasting that U.S. ethanol production will average 399,000 barrels a day, up about 27 percent from 313,000 barrels a day a year earlier.

There are currently 114 ethanol production plants nationwide that have an annual capacity of 5.6 billion gallons.

Another 80 ethanol refineries are under construction and seven are expanding, which will add more than 6 billion gallons of ethanol production capacity when finished.