Delay new biofuels rule one year: U.S. oil industry

WASHINGTON (Reuters) - The government should delay new rules that expand U.S. use of biofuels until 2011, the oil industry said on Tuesday, because there is too much work to do on the ground-breaking rules to start sooner.

The Environmental Protection Agency has a January 1 target to apply the rules that also require advanced biofuels to have greenhouse gas emissions that are 40 percent lower than petroleum from creation through consumption.

Al Mannato, a manager at the American Petroleum Institute, said the industry would prefer a year's delay as it is unlikely EPA can complete work in time for a smooth January 1 start.

"It appears the only option possible is a 2011 start date," said Mannato during an all-day EPA hearing on its May 5 proposal to update the so-called renewable fuels standard.

EPA proposed changes to the Renewable Identification Numbers that flow with each gallon of ethanol as it passes through ownership chain from makers to refiners. Mannato said the new rules would result in four types of RINs to be tracked, instead of the current one.

The new standard also requires advanced biofuels to have greenhouse gas emissions that are 40 percent lower than petroleum, from creation through consumption.

Farm and ethanol groups say the life-cycle measurements for biofuels veer into speculation by including crop land changes overseas. They want the international estimates dropped.

Environmentalists defend the formula as cutting-edge work that gives a full account of biofuel's impact.

Besides the hearing, EPA plans two workshops on issues that include indirect land-use change. It will accept comments on the RFS proposal until July 27.