Thursday, March 12, 2009

Obama backs ethanol, stays mum on raising blend

President Barack Obama made clear this week that he wants to preserve the country's struggling ethanol industry but stopped short of a commitment to bail it out the by raising the amount of ethanol in gasoline above the current 10.2 percent. He also voiced his support for other biofuels.

"Ethanol groups told the agency that the 10 percent limit was 'a primary reason' for the industry's recent slump," reports Philip Brasher of The Des Moines Register. "Agriculture Secretary Tom Vilsack this week endorsed raising the cap to 12 percent to 13 percent." Vilsack's support for the cap bump is not suprising, since his home state of Iowa provides much of the corn used in the production of ethanol.

"Environmental agency officials have said that the 10 percent limit has not hit the industry yet but that the cap will make it difficult to meet the nation's annual usage mandates in coming years," writes Brasher. "The agency has been struggling with how to legally justify raising the limit, given unanswered questions about the impact of the increased ethanol content on engines, boats and outdoor equipment." (Read more)

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