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Momentum building towards higher maximum ethanol
blend rate for non-flex fuel vehicles
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The U.S. government could move "fairly
quickly" to increase the 10 percent ethanol-to-gasoline blend rate
by 2 or 3 percentage points, and later to 15 to 20 percent, USDA Secretary
Ton Vilsack said March 9, echoing comments sources signaled last week.
Meanwhile, House Speaker Nancy Pelosi (D-Calif.) and the chairmen of the
House and Senate Ag panels told a farm group that they supported a higher
ethanol-to-gasoline blend rate, with Pelosi seeing it as a way to reduce
reliance on petroleum imports.
Background: An ethanol group, Growth Energy, formally
asked the Environmental Protection Agency (EPA) on March 6 for a maximum
blend rate of up to 15 percent. EPA has 270 days to respond to the petition.
Growth Energy officials have previously noted that EPA could allow a
12 percent or 13 percent blend in the interim. "We can, we believe,
move fairly quickly to move the blend rate to 12 to 13 percent in the
interim," Vilsack said at the National Farmers Union (NFU) convention.
After that, he said, the blend rate could rise to 15 percent or 20 percent.
Asked about raising the ethanol cap, Pelosi, said "I
hope so" and pointed to the goal of more domestic fuel production.
Vilsack said, "We'd love to see 15 percent. Right now my focus
is on 12, 13 percent because I think it is doable more quickly. Our
hope is that EPA can come to the same conclusion we have, which is that
this is something that can be done within existing regulations without
a great deal of time spent reviewing the science.”
Vilsack said he has had several conversations with EPA head
Lisa Jackson and her team to encourage the agency "to take aggressive
action on the blend rate." An increase to 12 or 13 percent
would be a good "first step" and would help expand market
opportunities and improve the stability of the ethanol industry, he
noted. Ultimately, EPA must decide whether to change the blend rate.
USDA and other federal departments can offer advice and information.
Senate Ag Committee Chairman Tom Harkin (D-Iowa)
told the NFU confab that he, too, supports moving the blend rate up
to 15 percent.
House Ag Committee Chairman Collin Peterson (D-Minn.)
also favors an incremental approach toward a 15 percent maximum blend
rate for non-flex fuel vehicles.
Meanwhile, the agriculture directors of 10 Midwestern states
sent a letter to President Obama Monday also endorsing the acceptance
of 15 or 20 percent ethanol blends. The letter noted that,
“American ethanol production has nearly reached 10 percent saturation.
We must move to a base blend of 15 or 20 percent in 2009 in order to
continue growing this vital industry. By working together to promote
domestic production and improve market access, we can continue to deliver
a clean, renewable fuel that has a positive impact on our domestic economy.”
Letter signers include the heads of state agriculture departments in
South Dakota, Iowa, Nebraska, Wisconsin, North Dakota, Kansas, Minnesota,
Michigan, Montana and Ohio.
On another ethanol industry matter, Vilsack
said he is looking for ways to help ethanol plants that are "on the
edge" of financial viability due to the lower fuel
prices and that he plans to work with the Energy Department to encourage
the construction of transmission lines that can get energy produced in
rural states to urban areas.
Comments: The House Speaker,
the USDA Secretary, and the chairmen of the Agriculture panels all support
a higher blend rate. That suggests it is not a question of if but when
and how much an increase. While the EPA doesn't take as long as the Food
and Drug Administration (FDA) to make a decision, the EPA usually takes
a lot of time to address a matter.
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retransmission is prohibited under U.S. copyright laws.