Americans are burning the most gasoline in eight years. And the nation’s ethanol suppliers wouldn’t have it any other way.
More demand means more gasoline being blended. And more blending means more ethanol potentially getting added to the mix. That may give President Barack Obama’s administration just the support it needs to raise the amount of ethanol that fuel suppliers must use in their mix, according to the Washington- based consultancy ClearView Energy Partners LLC. The Environmental Protection Agency submitted proposed biofuel requirements to the White House for review on Oct. 30, the government’s website shows.
“We think the numbers are going higher,” Tim Cheung, vice president and research analyst at ClearView, said by phone Monday. “Gasoline consumption has increased and therefore consumers are using more ethanol.”
Since the Environmental Protection Agency issued its proposal in May to change national biofuel targets, the U.S. government has raised demand projections for both gasoline and ethanol to reflect improving economic conditions and lower prices. The revisions threaten to weaken refiners’ longstanding argument that drivers aren’t using enough of the motor fuel to support more ethanol blending.
“EPA is obligated to use the latest gasoline demand projections from EIA, so we fully expect the final” targets to reflect higher consumption estimates, said Geoff Cooper, senior vice president of the Renewable Fuels Association, a Washington- based trade group.
The American Petroleum Institute, which represents Exxon Mobil Corp. and Chevron Corp., referred to comments made on an Oct. 28 conference call with the group’s director, Bob Greco. During the call, he described the Renewable Fuel Standard as a “failed program.”
Ethanol already comprises 10 percent of gasoline consumption, and the institute has argued that blends exceeding that share may lead to car engine and fuel system damage.
In May, the EPA proposed to set corn-based ethanol requirements at 13.4 billion gallons this year and 14 billion in 2016. The government had targeted 15 billion gallons for both years when it was outlined in 2007.