The Environmental Protection Agency said Tuesday it wants more tests to determine if car engines can handle higher concentrations of ethanol in gasoline before it decides whether to increase the maximum blend from 10 to 15 percent.
Still, the agency appeared to be favoring a higher ethanol concentration in gasoline, saying that the congressional mandate for increased ethanol use can't be achieved without allowing higher blends of the renewable fuel, most of which comes from corn.
The EPA, in a letter to a pro-ethanol group, said it expects to decide by June whether to raise the concentration and is inclined to do so if the limited, positive test results conducted so far are borne out by additional tests being done by the Energy Department.
The ethanol industry has maintained there is sufficient evidence to show that a 15 percent ethanol blend in motor fuel will not harm the performance of car engines. But the refining industry, small engine manufacturers and some environmental groups have argued against an increase, saying more testing is needed.
"Although all of the studies have not been completed, our engineering assessment to date indicates that the robust fuel, engine and emissions control systems on newer vehicles (2001 or later models) will likely be able to accommodate higher ethanol blends," the agency said in the letter to Growth Energy, a pro-ethanol lobbying group.
But EPA Assistant Administrator Gina McCarthy emphasized the agency wants more cars tested to confirm the initial assessments. "We want to make sure we have all necessary science to make the right decision," McCarthy wrote.
Wesley Clark, Growth Energy's co-chairman said the EPA letter was "a strong signal" that the agency is preparing to adopt a 15 percent, or E15, ethanol blend. The group had petitioned the EPA to increase the maximum concentrations and, by law, the agency had to formally respond by Dec. 1.
Congress has mandated sharp increases in ethanol use, requiring refiners to blend 12.9 billion gallons of biofuels in 2010, of which 12 billion gallons would be ethanol. The mandate soars to 36 billion gallons, mostly ethanol, by 2022.
To meet those requirements "it is clear that ethanol will need to be blended into gasoline at levels greater than the current limit of 10 percent," acknowledged the EPA.
Ethanol content in gasoline varies from none at all in some parts of the country to as much as 85 percent for fuel blended to be used in so-called flex-fuel vehicles. About 80 percent of the gasoline sold in the United States contains some amount of ethanol, most of it in concentrations of 10 percent or less for use in conventional vehicles.
But with gasoline demand declining because of the sagging economy and the wider use of more fuel efficient cars, "we're rapidly approaching the ethanol blend wall" that would make it difficult to achieve the mandates for ethanol use without higher concentrations, said Matt Hartwig, a spokesman for the Renewable Fuels Association.
Hartwig said the ethanol industry was disappointed that the EPA did not at least boost the blend cap from 10 to 12 percent as an interim step.
An increase in the cap is a way to boost ethanol demand and would give an economic boost to the ethanol industry. While the industry's capacity has grown to just under 12 billion gallons a year, about 1.3 billion gallons of that capacity has been idle, Hartwig said.
Opponents to increasing the blend ceiling include manufactures of smaller engines -- used in everything from lawn mowers to boats -- because they say those engines are not designed to use higher concentrations of the renewable fuel.
"No recreational marine engines, fuel systems or boats are currently designed, calibrated or warranted to run on any fuel with more than 10 percent ethanol," said a statement by the National Marine Manufacturers Association, urging more engine testing.
Mat Dunn, the group's legislative director, said an attempt by EPA to approve different ethanol concentration for different gasoline uses "would lead to a myriad of misfueling, liability and consumer safety issues" and cause the price of fuel to increase.
The EPA said that long-term tests conducted on two vehicles showed no adverse performance impact from a 15 percent ethanol blend, but that the Energy Department is expected to complete tests on 19 additional vehicles by next August.
"Should the (additional) test results remain supportive and provide the necessary basis, we would be in a position to approve E15 for 2001 and newer vehicles in the midyear timeframe," McCarthy said in the letter to Growth Energy.