Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 10/13/10

The Environmental Protection Agency announced it raised to 15 percent from 10 percent the maximum allowable ethanol blend rate into fuel for use in cars and light trucks made in 2007 and later.

These vehicles account for more than one-third of gasoline consumption, EPA Assistant Administrator for Air and Radiation Gina McCarthy told reporters today in a news conference.  

The agency also announced that a decision on E15 use in model years 2001 to 2006 vehicles will be made after EPA receives the results of additional testing by the Department of Energy, which is expected to be completed in November.

EPA granted no waiver this year for E15 use in model year 2000 and older cars and light trucks – or in any motorcycles, heavy-duty vehicles, or non-road engines – because currently there is no testing data to support such a waiver.

Since 1979, up to 10 percent ethanol (E10) has been used for all conventional cars and light trucks, and non-road vehicles.

EPA also announced several steps to help consumers easily identify the correct fuel for their vehicles and equipment. First, EPA is proposing E15 pump labeling requirements, including a requirement that the fuel industry specify the ethanol content of gasoline sold to retailers. There would also be a quarterly survey of retail stations to help ensure their gas pumps are properly labeled.

Corn price impact
The recent run-up in corn prices did not factor into EPA’s decision, McCarthy said on a conference call.  
“No. Not at all,” she said in response to a question, adding that EPA’s mandate was only to determine if vehicles could use E15 and still meet emissions standards and whether its use would harm vehicle engines.

The recent run-up in corn prices, however, could dampen immediate adoption of the higher blending rate.
“With ethanol selling for very near the price of gasoline at present and containing only two-thirds the energy of gasoline, it is doubtful that many (or perhaps any) blenders will move to the 15 percent rate any time soon,” livestock analysts Steve Meyer and Len Steiner predicted in the CME Group’s Daily Livestock Report.

The DLR went on to predict that while the rule change will not increase corn usage for ethanol production soon, “it does promise an expanded market for ethanol producers who have been caught between rising (Renewable Fuels Standard) requirements and the 10 percent allowable blend rate.”

The Renewable Fuels Standard requires that 12 billion gallons of ethanol be produced in 2010 and allows up to 15 billion gallons of ethanol annually to be counted toward meeting a 2022 goal of 36 billion gallons of combined ethanol and advanced biofuels.

Meat industry groups have long opposed any increase in the blend rate, as well as any extension of ethanol industry subsidies, warning those actions ultimately will raise meat and other food prices.
Officials at the American Meat Institute, National Chicken Council, National Meat Association, National Turkey Federation, National Cattlemen's Beef Association, Grocery Manufacturers Association and National Council of Chain Restaurants all issued statements decrying EPA’s decision.      

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