Friday, November 27, 2009

Recession may keep U.S. from using ethanol Congress ordered; EPA ponders blend change

Two years ago Congress mandated that the U.S. use at least 15 billion gallons of renewable fuels by 2012, up from seven billion in 2007. Now the recessionary drop in demand for gasoline has some wondering if the country will ever use that much biofuel. Ethanol proponents say the Environmental Protection Agency must increase the allowable ethanol blend in gasoline at the pump to meet the mandate, Matthew L. Wald of The New York Times reports.

EPA may increase the current 10 percent blending standard as early as next week, but that decision would have several detractors. The automobile industry says an increase would harm catalytic converters that control automobile pollution. Converters are supposed to last 120,000 to 150,000 miles, Wald reports, but the industry says more ethanol in gas could drop the life expectancy as low as 50,000 miles. EPA could decide to wait for more information about ethanol's affect on cars, but that would only delay the difficult decision.

EPA could waive the mandate that requires large volumes of biofuels to be used, but that decision would anger corn farmers, who gain from ethanol production. Efforts to produce ethanol from waste materials might also be undermined, Wald reports. Increased use of E85, which is 85 percent ethanol and 15 percent gasoline, would boost the saturated ethanol market, but only cars equipped with flex-fuel technology can use E85 and the fuel costs 31 cents more per gallon after decreased mileage is considered. For now, Wald writes, the event most likely to spur increased ethanol demand would be a return of $4-a-gallon gasoline. (Read more)

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