(Adds quote from ethanol group in paragraph 11)
By Christopher Doering
WASHINGTON, March 9 An increase in the
ethanol-gasoline blend rate to 12 or 13 percent could be
accomplished quickly and with minimal scientific review, giving
a needed boost to the future of the industry, U.S. Agriculture
Secretary Tom Vilsack said on Monday.
A formal request to boost the ethanol blend rate to as high
as 15 percent from the current cap of 10 percent was submitted
to the U.S. Environmental Protection Agency last week by Growth
Energy, an ethanol trade group. The EPA has 270 days to review,
collect public comment and make a decision.
"We'd love to see 15 percent. Right now my focus is on 12,
13 percent because I think it is doable more quickly," Vilsack
"Our hope is that EPA can come to the same conclusion we
have, which is that this is something that can be done within
existing regulations without a great deal of time spent
reviewing the science," he added.
During the review, the EPA will examine whether a higher
blend would harm emission control systems, including catalytic
converters, in vehicles. For now, many believe the EPA has the
authority to allow a temporary jump to 12 or 13 percent before
a final decision is reached on the 15 percent request.
Vilsack said he has had several conversations with EPA head
Lisa Jackson and her team to encourage the agency "to take
aggressive action on the blend rate." An increase to 12 or 13
percent would be a good "first step" and would help expand
market opportunities and improve the stability of the ethanol
industry, he noted.
Ethanol, once the cornerstone of the U.S. plan to wean
itself from foreign energy, has drawn fire from the food
industry and aid groups for diverting corn from livestock and
foodmakers and pushing world food prices up.
Food manufacturers and livestock and environmental groups
have lined up against a higher blend rate for ethanol made from
corn. They say the EPA should wait until ethanol made from crop
waste and grasses is commercially available.
Some analysts and the Renewable Fuels Association, an
ethanol trade group, forecast consolidation among ethanol
companies this year due to tighter margins and slow demand due
to a drop in gasoline use.
The industry suffered a large casualty when VeraSun Energy
Corp VSUNQ.OB, the No. 2 U.S. ethanol producer, filed for
bankruptcy in October.
An increase to a 12 or 13 percent blend rate "is a
fundamentally sound and scientifically supported intermediate
step that would provide some more immediate relief to a
constrained US ethanol market," said Matt Hartwig, a spokesman
for the Washington-based Renewable Fuels Association.
Ultimately, EPA must decide whether to change the blend
rate. The USDA and other federal departments can offer advice
A preliminary study released last October and updated last
month by the Energy Department found emissions and exhaust
temperatures in cars running on higher blends of ethanol did
not change significantly from those using traditional fuels.
The DOE has been working on other studies of how the blends
affect engines and emissions.
(Reporting by Christopher Doering; editing by Jim Marshall)