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EPA Sort of Raises Ethanol Blend for Gasoline and Creates a Market Mess

The EPA is expected today to raise the ethanol blend in gasoline up to 15 percent for use in cars made since 2007, a decision that will do little to help corn farmers, but will create a mess for consumers. That's assuming refiners like Valero (VLO) even sell the stuff.

Growth Energy, the coalition of ethanol producers, has lobbied the EPA to boost the ethanol blend wall from 10 percent to 15 percent to help draw down its supply and help meet federal renewable fuel targets. Federal law requires energy companies to blend 15 billion gallons of corn-based fuel a year by 2015.

The idea behind increasing the ethanol blend is to make gasoline burn cleaner (by increasing oxygen content) and pollute less through the evaporative emissions that occur when gasoline vapor escapes, my BNET colleague Jim Motavalli has noted before. But, as he's also written, there are serious concerns that an increase would damage engines -- especially in older vehicles -- and actually pollute more.

And so, we get this odd decision by the EPA that will please the corn ethanol lobby and in fact accomplish nothing, except maybe confusion. The EPA will raise the blend wall to 15 percent for cars made in 2007 or newer. The agency is expected to make a decision on cars made between 2001 and 2006 later this year.

As Reuters notes, many service stations are reluctant to sell E15 because most pumps have not been certified to sell the higher ethanol blend. And it opens them up to lawsuits from consumers if E15 damages the engines of boats and lawn mowers.

Not to mention that major refiners like Valero don't seem particularly interested in selling the higher blend to begin with. Refiners are not obligated to use the higher blend, although eventually that might be the only way to meet federal renewable fuel requirements.

Photo from Flickr user gaelx, CC 2.0
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