U.S. needs another year to test higher ethanol blend

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency said on Wednesday it will take another year to complete government testing on whether higher levels of ethanol can be blended into gasoline without harming engines.

Thomas Wallace of the Enzyme Development Corporation conducts a test on a sample taken from a tank where corn is being converted into ethanol, inside the Lincolnway Energy plant in the town of Nevada, Iowa, December 6, 2007. REUTERS/Jason Reed

Ethanol is now approved to make up 10 percent of gasoline in cars and trucks. Producers are pushing the government to allow higher ethanol blend levels, as more ethanol will be required each year under federal law.

Congress required 9 billion gallons of ethanol and other biofuels to be blended into gasoline last year. The amount will rise annually toward 36 billion gallons a year in 2022.

However, the Energy Department estimates that as early as 2013, at the 10 percent blend rate, the amount of ethanol required to be produced would exceed the amount the U.S. vehicle fleet could consume. The so-called 10 percent blend wall could be reached a year earlier if a weak economy further reduces gasoline demand.

Margo Oge, Director of the EPA’s Office of Transportation and Air Quality, told a Senate panel the agency is working with the Energy Department to test the impact of higher ethanol levels and hopes to finish “over the course of the next year.”

In a statement to a Senate Clean Air and Nuclear Safety Subcommittee hearing, Oge said the tests should provide “emissions and durability data to support a decision on the appropriate use, if any, of higher blends of ethanol in gasoline vehicles and engines.”

Oge noted that the EPA received a petition last month from Growth Energy and 52 ethanol manufacturers to allow gasoline to contain up to 15 percent of ethanol by volume.

Oge said the agency “will soon” publish the proposal and seek public comment. She said EPA has 270 days to act on the request, from March 6 when it was received.

The head of the trade group representing U.S. oil refiners that make gasoline told the Senate panel it opposed any legislation or regulations approving higher ethanol blends until “unbiased and comprehensive” testing is complete.

“There has not been sufficient testing of motor vehicle and nonroad equipment engines to justify” higher ethanol blends in gasoline, said Charles Drevna, President of the National Petrochemical and Refiners Association.

Livestock operators complain that more ethanol production would raise their animal feed costs because ethanol made in the United States is refined mostly from corn.

Sen. Tom Carper, who chairs the subcommittee, questioned whether the U.S. market can absorb increased ethanol supplies each year now that gasoline demand has declined due to a weak economy and more fuel-efficient vehicles on the road.

“As (gasoline) consumption decreases our biofuels standard increases,” he said. “Are we moving too fast for our infrastructure and engines to handle the biofuels safely?”

Reporting by Tom Doggett; editing by Jim Marshall