Canadian Manufacturing

U.S. EPA delaying decision to reduce amount of ethanol in fuel

Latest delay one of many to plague ethanol rule as EPA struggles to balance ethanol production, fuel demand

WASHINGTON—United States President Barack Obama’s administration said it is delaying a decision on whether to reduce the amount of ethanol in the nation’s fuel supply.

Last year the Environmental Protection Agency (EPA) proposed to reduce the amount of ethanol in fuel for the first time, acknowledging that a biofuel law that both Republicans and Democrats had championed nearly a decade ago was not working as well as expected.

A final decision was due before the end of the year, but the EPA announced the final rule will come in 2015.

The ethanol targets are required by a 2007 law that tried to address global warming, reduce dependence on foreign oil and boost the rural economy by requiring oil companies to blend millions of litres of biofuels into gasoline annually.

But lawmakers did not anticipate fuel economy would improve as much as it has in recent years, reducing overall demand for gasoline.

Meanwhile, next-generation biofuels, made from agricultural waste such as wood chips and corncobs, have not taken off as quickly as Congress had required and the Obama administration anticipated.

Last year’s proposal to lower ethanol levels was not expected to mean much for consumers at the pump, but it angered corn growers and ethanol companies who have since lobbied the government to reverse it.

Ethanol is a fuel additive primarily made from corn.

Industry groups claimed victory at the latest delay, one of many that have plagued the ethanol rule as the EPA struggles to balance ethanol production and fuel demand.

“Today’s announcement is a clear acknowledgement that the EPA’s proposed rule was flawed from the beginning,” said Tom Buis of the ethanol industry group Growth Energy.

The EPA said in a notice in the Federal Register released Nov. 21 that its 2013 proposal had “generated significant comment and controversy,” particularly in regard to meeting ambitious ethanol targets set forward in the 2007 law.

The agency said it has been evaluating the comments in light of the Obama administration’s “commitment to the goals of the statute to increase the use of renewable fuels.”

Obama himself has championed biofuels since his days representing Illinois in the Senate, and his administration had resisted previous calls to lower biofuel volumes or repeal the law.

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