Hitting the Brake on Ethanol

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from The Wall Street Journal,

Government Proposes Easing Level of Corn-Based Additive Required in Gasoline.

The Environmental Protection Agency on Friday proposed for the first time to ease an annual requirement for ethanol in gasoline, saying that levels mandated in a 2007 law are difficult, if not impossible, to meet.

The move represents one of the biggest setbacks to date for ethanol, long seen as a promising way for the U.S. to reduce dependence on imported oil. Most U.S. ethanol comes from corn, and the move came despite a heavy lobbying push from corn-producing states.

Under a 2007 law, refiners were supposed to blend more than 14 billion gallons of ethanol into the nation’s gasoline supply in 2014, representing more than 10% of the gasoline motorists pump annually.

Refiners and oil companies called the level too high, saying it would require them to produce fuel that could damage engines, and the EPA said it had authority to roll back the congressional mandate.

The proposal released Friday would require between 12.7 billion and 13.2 billion gallons of corn ethanol in the nation’s fuel mix—a level that is not only lower than what was originally intended for 2014, and also lower than the levels of the last two years.

The EPA went further in lowering the mandates for advanced biofuels, a category that includes ethanol made from non-corn sources such as grasses. Congress had envisioned a mandate of 3.75 billion gallons of advanced biofuels in 2014, but the EPA proposed that the level be cut to between two billion and 2.5 billion gallons.

Biofuels defenders blasted the regulators’ plan, saying it could end up strengthening petroleum’s stranglehold on the transportation market.

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