Industry Seeks to Raise Ethanol Levels in Fuel

By STEPHEN POWER

WASHINGTON -- The ethanol industry is putting pressure on the Obama administration to allow higher levels of ethanol in gasoline, a step that auto makers and some public-health advocates have resisted amid concerns it could harm engines and air quality.

Wesley Clark
On Friday, an ethanol trade group led by Wesley Clark, the retired Army general and 2004 Democratic presidential candidate, petitioned the Environmental Protection Agency to allow the ethanol levels in gasoline blends to be as high as 15%, up from the current 10%. Without the increase, the group said the U.S. won't be able to meet a congressional mandate requiring some 36 billion gallons of renewable fuel to be blended into the domestic fuel supply by 2022.
Demand for the corn-based fuel has been falling. Consumers have cut back on driving due to the economic crisis, and the plunge in oil prices from last summer's record high has pushed down ethanol prices, cutting producers' profits. The industry also has been stung by high corn prices, which increase the expense of ethanol production.
The EPA already is approaching another big decision with consequences for the ethanol industry: how to measure the greenhouse-gas emissions associated with biofuels such as corn ethanol. Many producers are nervous that the EPA will use a formula that hurts the industry, by taking into account not only emissions in the U.S. as a result of ethanol production but also emissions overseas when farmers world-wide respond to higher food prices by converting forest and grassland to cropland.
The vast majority of ethanol used in the U.S. is blended with gasoline to create E10 -- gasoline with up to 10% ethanol. Some auto-industry officials and public-health advocates, worried that higher ethanol blends could damage vehicles' engines and overwhelm their pollution-control systems, say there hasn't been enough testing done to justify raising the cap.
The group led by Mr. Clark, Growth Energy, cited an Energy Department study last fall that found blends as high as E20 didn't significantly change vehicles' emissions levels, and that "no operability or driveability issues were identified."
A spokesman for the Alliance of Automobile Manufacturers said the group believes that "more testing is necessary before the impact of midlevel blends on the 240 million vehicles currently in operation can be determined." A spokesman for the American Lung Association said the EPA shouldn't rush its decision before concluding its own research.
At the EPA, a spokeswoman said the agency will review the petition and "act based on the best available science." Speaking to reporters at an agriculture forum last week, EPA Administrator Lisa Jackson said a decision on lifting the cap would likely take several months.
Write to Stephen Power at stephen.power@wsj.com