USDA pushing EPA for more ethanol in gasoline

By Christopher Doering
WASHINGTON, Feb 10 (Reuters) - The Environmental Protection
Agency should raise the amount of ethanol it requires to be
blended with gasoline in order to help the U.S. ethanol
industry, Agriculture Secretary Tom Vilsack said on Tuesday.
The U.S. government currently sets the ethanol-to-gasoline
blend rate at 10 percent. Ethanol groups have complained the
cap is stifling development and growth of the alternative fuel
industry. They have suggested rates of 15 percent, or even 20
percent.
"It's not so much a discussion of which percentage, it's
the fact that we have to have a discussion about increasing the
blend rate, and, obviously, it's going to have to be something
the EPA is comfortable with," Vilsack told reporters after
speaking to a meeting of rice growers.
"My hope is that we get a blend rate that's higher than 10
percent, that's going to create more opportunities for the
ethanol industry," he added.
Ultimately, EPA must decide whether to change the blend
rate. The U.S. Agriculture Department and other federal
departments can offer advice and information to the agency.
A preliminary study released last October by the Energy
Department found emissions and exhaust temperatures in cars
running on 15 percent and 20 percent ethanol did not change
significantly from those using traditional fuels.
The DOE cautioned more studies were needed to determine
whether higher blends of ethanol could be used.
Vilsack said other strategies to improve future biofuel use
include building up infrastructure for second- and
third-generation biofuels.
Once the cornerstone of the United States' plan to wean
itself from foreign energy, ethanol has been sharply criticized
by the food industry and aid groups for diverting corn away
from livestock and foodmakers, pushing world food prices up.
Some analysts and the Renewable Fuels Association, an
ethanol trade group, forecast consolidation among ethanol
companies this year due to tighter operating margins and less
demand because of a drop in gasoline use.
Already the industry suffered one large casualty when
VeraSun Energy Corp , the second largest U.S. ethanol
producer, filed for bankruptcy in October.
The federal Renewable Fuels Standard requires use of 21
billion gallons a year of advanced biofuels, such as cellulosic
ethanol, by 2022 -- beginning with 600,000 gallons this year.
It sets a peak of 15 billion gallons a year of corn
ethanol. The target this year is 10.5 billion gallons.
(Editing by Walter Bagley)
((christopher.doering@thomsonreuters.com ; +202 898 8394))
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Keywords: ETHANOL USDA/BLENDRATE

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