Groups want more tests on higher-ethanol U.S. fuel

WASHINGTON (Reuters) - A coalition of oil companies, car and engine manufacturers and fuel sellers told the Obama administration on Thursday not to increase the amount of ethanol blended into gasoline based on inadequate test data.

The Environmental Protection Agency said last month it needs more time to decide on a industry request to boost the level of ethanol in gasoline to 15 percent from 10 percent, but indicated it would likely approve the higher fuel blend for new American cars.

Gasoline approved to have a higher volume of ethanol would help absorb the annual increase in ethanol supplies required by Congress in its attempt to reduce U.S. petroleum imports. The higher blend would help the U.S. ethanol industry, which was hard hit in 2008 by the economic downturn and a drop in crude oil prices to nearly $30 a barrel. Many companies were forced into bankruptcy and some production capacity was also idled.

Crude oil prices have since rebounded to above $80.

The EPA plans to make a final decision on so-called E15 gasoline by mid-June.

"We are writing to express our concern that EPA may decide to allow E15 based on limited or inadequate data," the group said in a letter to agency head Lisa Jackson. "We urge EPA to base its decision on a complete and sound scientific record."

The agency already said it was waiting until this summer, so it can review test data on how a higher ethanol-gasoline ratio would affect engines. [ID:nN01495211] Initial tests showed vehicles built after 2001 would likely be able to handle E15, the agency said.

However, the coalition said the EPA needs to asses the effects of E15 on the existing automobile fleet, motorcycles and nonroad equipment as well as retail gasoline station pumps and storage tanks.

"As you proceed with important decisions that could affect the long-term success of ethanol and possibly other biofuels in the U.S. market, it is imperative that those decisions be based on a complete understanding of the potential impacts of increased levels of ethanol on all segments of the end-user market," the coalition of 14 trade groups said.

It also said the EPA should reopen the E15 comment period so the public can review the new test data and that the Energy Department should spend all the $15 million approved by Congress for research on increasing ethanol-blend levels.

The coalition includes the Alliance of Automobile Manufacturers, American Petroleum Institute, Motorcycle Industry Council, Boat Owners Association of the United States and the National Association of Convenience Stores.

The Renewable Fuels Association, which is the trade group for ethanol producers, says the EPA should go ahead and approve intermediate ethanol blends, such as gasoline with 12 percent ethanol, while the agency completes its testing on E15.

source: reuters