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Monday, February 09, 2009

USDA, EPA talk raising share of ethanol in gas

Agriculture Secretary Tom Vilsack told Bloomberg News Friday that he is in talks with the Environmental Protection Agency about the possibility of increasing the percentage of ethanol added to gasoline. In November, the EPA set a requirement that ethanol be 10.2 percent of an ethanol-gasoline blend; some in the ethanol industry have suggested 15 or 20 percent.

The industry is facing significant challenges. The high gasoline prices seen last year lowered demand for fuel, and ethanol producer Archer Daniels Midland Co. says U.S. ethanol production is only making 79 percent of what it could be making. The industry's second-largest producer, VeraSun Energy Corp., filed for bankruptcy protection in October. "By increasing the blend, demand for ethanol will be boosted even as gasoline use falls," writes Bloomberg's Tina Seeley.

“I do think it’s important for us to look for strategies to make sure the infrastructure of the ethanol industry is preserved, because it is a key component to this new energy future the president’s laid out," Vilsack, a former governor of Iowa, a big corn and ethanol state, told Seeley in an interview Friday.
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