December 1, 2009 / 3:29 PM / in 8 years

US Govt delays action on more ethanol in gasoline

* Final test results expected in mid-June

* Vehicles built after 2001 likely to handle E15

(adds details of EPA decision, comment from Growth Energy)

WASHINGTON, Dec 1 (Reuters) - The U.S. Environmental Protection Agency said on Tuesday it needs more time to decide whether to approve a request from industry to boost the amount of ethanol blended into gasoline.

The EPA was supposed to decide by Dec. 1 on a petition from Growth Energy and 54 ethanol manufacturers on whether to let gasoline contain up to 15 percent of ethanol. U.S. gasoline is now approved to contain up to 10 percent ethanol, which in the United States is made mostly from corn.

But the EPA said it needs more time to review test data on the effects higher ethanol-blended gasoline would have on vehicles.

The EPA expects to have final vehicle testing data on the effects of higher-blended ethanol by mid-June, according to a letter to Growth Energy that the EPA posted on its website.

However, the EPA said initial tests show that vehicles built after 2001 "will likely be able to accommodate" gasoline blended with as much as 15 percent ethanol, commonly known as E15.

Growth Energy said it welcomed the EPA’s announcement, claiming it indicates the agency was preparing to approve E15 upon the completion of ongoing tests next year.

"We are confident the ongoing tests will further confirm the data we submitted in the Growth Energy Green Jobs Waiver and silence those critics, allowing more American-produced energy to enter the market," said Tom Buis, chief executive officer of Growth Energy.

(Reporting by Tom Doggett and Ayesha Rascoe; Editing by Lisa Shumaker)

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