Oil Report

US GAO asked to study impact of higher ethanol blend

WASHINGTON, Dec 9 (Reuters) - Two key Republican lawmakers asked the Government Accountability Office on Wednesday to study the impact of boosting the amount of ethanol that is blended into U.S. gasoline supplies.

The request was made after the Environmental Protection Agency indicated last week it would likely approve next summer an industry proposal to increase the volume of ethanol in gasoline to up to 15 percent.

The agency said it just needs more time to review test data on the effects a higher ethanol-gasoline ratio would have on vehicles

U.S. gasoline is now allowed to contain up to 10 percent ethanol, which is made mostly from corn.

Representatives Joe Barton and Greg Walden, who requested the GAO study, said there are concerns that automakers’ warranties may be voided if gasoline with more than 10 percent ethanol is used and that higher ethanol blends could also damage engines in lawn mowers, boats, chain saws and small tractors.

“Congress may consider whether the federal government should assume liability for costs associated with increasing ethanol blends,” the lawmakers wrote. “It is imperative that Congress have some measure of the potential costs of infrastructure and liability risks, should higher blends be mandated.”

Barton is the top Republican on the House Energy and Commerce Committee and Walden is the senior Republican member of the House Oversight and Investigations Subcommittee.

The lawmakers asked the GAO to find out the federal government’s risk if it allowed intermediate blends of ethanol, such as gasoline that contains 12 percent ethanol, and assumed liability for damage done to vehicles and non-auto engines.

They also wanted to know what research has been conducted on the effects intermediate ethanol blends would have on engines.

The Renewable Fuels Association, the trade group that represents ethanol producers, has called on the EPA to immediately approve gasoline with 12 percent ethanol while the agency reviews the data for the much higher 15 percent blend.

The lawmakers also asked GAO to spell out the economic challenges of building pipelines that would be dedicated for moving ethanol supplies from the Midwest to the East and West coasts.

Ethanol can be corrosive when mixed with other petroleum products in a pipeline.