EPA Delays Decision On Ethanol In Gas

WASHINGTON (AP) — The Obama administration said Friday 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 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 on the already-delayed standards, but the EPA said Friday the final rule will now come in 2015.

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         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 billions of gallons 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 primarily made from corn.

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         At least one ethanol industry group 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 Friday in the Federal Register that its 2013 proposal had "generated significant comment and controversy," particularly in regard to meeting ambitious ethanol targets set forward in the 2007 law, known as the Renewable Fuel Standard.

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         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."

         President Barack Obama 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.

         House Energy and Commerce Chairman Fred Upton, R-Mich., has said he wants his panel to review the Renewable Fuel Standard. Delay only adds to growing uncertainty and frustration, he said.

         "This unexpected announcement highlights that there are still significant challenges facing the RFS and underscores the need to come together and find a practical, bipartisan solution," Upton said.

         The American Fuel and Petrochemical Manufacturers, the companies that make gasoline and other fuels, said Friday that the group will sue the EPA for not releasing the 2014 standards according to the timeline established by Congress. The group said Congress needs to "step in and repeal or significantly reform this badly broken program."

         Jack Gerard, CEO of the oil and gas group American Petroleum Institute, said the delays are creating too much uncertainty for the industry.

         "This is an example of government at its worst," Gerard said.

         – by AP Reporter Mary Clare Jalonick

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