* Debate over ethanol content in U.S. gasoline heats up
* Reduction in ethanol mandate is under consideration
* Ethanol group criticizes leak of 'unverified' document
* Regulators not available for comment
Oct 11 A leading ethanol group reacted
vigorously on Friday to media reports of a proposed easing of
biofuel requirements next year, calling for U.S. agencies to
investigate the leak of a draft Environmental Protection Agency
On Thursday, Reuters and other news outlets reported on EPA
documents that showed the agency proposing a reduction in the
amount of corn-based ethanol that would be required for blending
into gasoline next year, a retreat from the landmark 2007 law
and a major victory for the oil industry.
Coming after months of an intensifying lobbying and
political battle between oil refiners and ethanol groups, the
reports were met with immediate skepticism from many in the
biofuel industry, some questioning the documents' authenticity.
On Friday, ethanol group Growth Energy said it would not
comment on "unverified 'draft' documents" that were still under
review, a process stalled by the government shutdown.
The EPA documents seen by Reuters could not be independently
verified, and an EPA spokeswoman has not commented on them. They
were dated Aug. 26 and Sept. 6, around the same time that the
agency submitted its proposal to the White House Office of
Management and Budget, which must still approve them. It was not
clear whether the documents had been updated before submission.
"Because of the dramatic economic impact on commodity
markets there should be an immediate investigation by the
Justice Department, and the Commodity Futures Trading Commission
to determine if this was an attempt to manipulate markets such
as corn futures, ethanol futures and/or RINS markets," Tom Buis,
CEO of Growth Energy, said in a release.
The Department of Justice could not be reached for comment,
and DOJ representatives are less available than usual because of
the partial government shutdown. In general, the Department of
Justice does not confirm investigations that have yet to be
confirmed by the targets. The CFTC has said it is unlikely to be
able to respond to media requests during the shutdown.
The ethanol group's strong response illustrates the highly
charged nature of the debate between two industries fighting
over the future of the U.S. fuel supply. Ethanol groups fear any
wavering on use of corn-based ethanol could undermine their
future. Oil refiners say the law is forcing them to spend
billions of dollars to buy ethanol credits, driving up gasoline
The EPA proposal would reduce the overall renewable fuel
requirements for 2014 to 15.21 billion gallons, far less than
the 18.15 billion-gallon 2014 target established by law.
That would reduce the volume of corn-based ethanol to about
800 million gallons less than this year's 13.8 billion gallons,
a much larger cut than many industry observers had been
expecting. The law had required 14.4 billion gallons for 2014.
The oil industry argues that it cannot sell gasoline with
more than 10 percent ethanol, and so is unable to blend more
biofuel. Corn-ethanol producers argue that they should be able
to sell gasoline that is 15 percent biofuel, the maximum allowed
by the EPA for newer model cars.
(Reporting by Chuck Abbott in Washington; writing by Jonathan
Leff; editing by Matthew Lewis)