Biofuel, farm groups seek to stop anti-ethanol measures

Ethanol producers and farm groups as pleading with senators to reject House-passed measures that would temporarily block an increase in the amount of ethanol that can be blended into gasoline. That provision is included in a spending bill that the House passed last weekend. “Such a prohibition would only contribute to our nation’s reliance on foreign sources of oil,” the industry groups said in a letter sent today to all 100 senators.

The broader House bill would cut federal spending by $60 billion. Sen. Charles Grassley, R-Ia., said this week that cutting the deficit is so important that he would vote for a bill similar to the House’s even if it contained the anti-ethanol measures.

The Environmental Protection Agency has agreed to raise the ethanol blending limit from 10 percent to 15 percent for 2001 and newer cars and trucks, but the House measure would bar the agency from implementing the increase during the rest of the 2011 budget year, which ends Sept. 30.

Agriculture Department economists say the ethanol industry is close to reaching the limit of the biofuel can be added to gasoline at 10 percent. Because of that so-called blend wall, the USDA estimates that the amount of corn used for ethanol will grow only from 4.95 billion to 5 billion bushels from the current crop marketing year, which ends Aug. 31, to the next. Slowing the ethanol industry’s growth is the intent of the refiners, food companies and livestock producers backing the House provisions.

“The blend wall is already biting,” said Matt Hartwig, a spokesman for the Renewable Fuels Association, one of the groups that signed the letter. “Getting meaningful gallons of E15 in the marketplace will take some time and certainly won’t happen this year. There remain issues regarding labeling, fuel regulations, and retailer concerns that must be addressed before we see meaningful E15 sales.”

The letter also was signed by the American Coalition for Ethanol, American Farm Bureau Federation, Growth Energy, National Corn Growers Association , National Farmers Union and the National Sorghum Producers.

SOURCE: blogs.desmoinesregister