UPDATE 1-EPA to ok E15 gasoline for 2001-06 cars -sources

Thu Jan 20, 2011 11:35pm GMT

* E15 could go in more than half U.S. vehicles on roads

* Service stations worried about being sued over E15

(Recasts, adds background on E15)

By Tom Doggett

WASHINGTON, Jan 20 (Reuters) - U.S. regulators are expected to announce on Friday that gasoline blended with up to 15 percent ethanol is safe to use in vehicles built during the 2001 to 2006 model years, sources familiar with the matter told Reuters.

The Environmental Protection Agency last October approved so-called E15 gasoline for cars and trucks made during 2007 and later. Gasoline for other vehicles can hold up to 10 percent ethanol.

The 50 percent ethanol boost in gasoline in cars and trucks built since the 2001 model year would cover more than half the vehicles now on U.S. highways. The move should please ethanol producers and the U.S. farmers who grow the corn used to make it.

But service station owners worry that putting higher ethanol blends in older cars could lead to lawsuits if the fuel damages their engines.

U.S. law requires the amount of ethanol blended into U.S. gasoline to gradually increases from 12 billion gallons last year to 12.6 billion gallons this year and then to 15 billion gallons by 2015.

Another reason service stations are reluctant to offer E15 is because most fuel pumps have not been certified to sell it, and they worry consumers might mistakenly put it into the engines of boats and yard equipment like chainsaws not approved to use it.

To help consumers, the EPA plans to put E15 labels on gasoline pumps so the fuel won't be with other blends.

(Reporting by Tom Doggett; Editing by David Gregorio)