UPDATE 3-US okays ethanol boost for more cars

Fri Jan 21, 2011 7:53pm GMT

 * More than half of vehicles on the road can use E15
 * E15 to help reduce U.S. oil imports, create jobs
 * Some service stations reluctant to sell E15
 (Releads, adds comments from ethanol groups, oil refiners)
 By Tom Doggett
 WASHINGTON, Jan 21 (Reuters) - U.S. regulators on Friday
backed a request that would sharply boost the use of corn-based
ethanol in more than half the nation's cars, elevating the
stakes in a contentious debate over the safety and cost of
converting more corn into fuel.
 The U.S. Environmental Protection Agency's announcement
boosting the ethanol blend rate in gasoline to 15 percent from
10 percent in vehicles built from 2001 to 2006 was not a
surprise, coming just months after it allowed so-called E15 in
cars and trucks built in 2007 or later.
 But it is still likely to fire heated rhetoric over the
increased use of ethanol at a time of rising food and fuel
costs, though it may be years yet before the fuel clears the
legal and logistical hurdles that effectively prevent its sale
today.
 Already some 40 percent of the U.S. corn crop goes to make
ethanol, and the fuel has helped spur prices on commodity
markets. Corn futures Cc1 were only slightly higher on
Friday, up 3 cents to $6.57 a bushel.
 With world food prices soaring, livestock feeders and food
makers believe that E15 gasoline will further push up corn
prices because of the increased demand from ethanol makers for
the grain.
 Service station owners, however, are worried that putting
higher ethanol blends in older cars could lead to lawsuits if
the fuel damages their engines.
 EPA Administrator Lisa Jackson maintained the fuel was
safe.
 "Recently completed testing and data analysis show that E15
does not harm emissions control equipment in newer cars and
light trucks," she said in a statement.
 The industry will also have to pay for for new blender
pumps and storage tanks to sell E15, which could slow adoption
of the fuel.
 The EPA said it is still reviewing public comment for an
E15 label that would be put on gasoline pumps to make sure
consumers don't use the wrong fuel.
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^  
  Graphic of corn-for-ethanol use:
  link.reuters.com/tyc67r 
  SCENARIOS-Higher US ethanol face road blocks [ID:nN30204734]
  TAKE A LOOK:                                 [ID:nN21247364]
  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 Growth Energy, the trade group that petitioned the EPA back
in March 2009 to allow E15, said the agency's decision was a
bold move that would change America's energy future.
 "Increased use of ethanol will strengthen our energy
security, create U.S. jobs, and improve the environment by
displacing conventional gasoline with a low-carbon fuel," said
Tom Buis, chief executive of Growth Energy.
 "Today's decision greenlights the use of E15 for nearly two
out of every three cars on the road today and furthers proves
ethanol is a safe, effective fuel choice for American drivers,"
said Renewable Fuels Association President Bob Dinneen.
 Both Dinneen and Buis urged the EPA to allow E15 for all
cars and pickups.
 The trade group for oil refiners criticized the EPA's
decision, saying the agency acted without adequate scientific
evidence that E15 was safe.
 "Widespread use of 15 percent ethanol in gasoline could
cause engine failures that could leave consumers stranded,
injured or worse, and hit consumers with costly engine
repairs," said Charles Drevna, President of the National
Petrochemical & Refiners Association.
 The group has sued EPA to keep E15 off the market.
 (Reporting by Tom Doggett; additional reporting by Ayesha
Rascoe, Editing by Marguerita Choy)






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