Last month, the U.S. Environmental Protection Agency delayed the approval of higher ethanol blends in gasoline. Currently, companies can blend up to 10 percent ethanol in gasoline. The farm industry was pushing for up to a 15-percent blend limit. Ethanol, a clean-burning fuel made primarily from corn, is produced by several plants within a 60-mile radius of Peoria.

The EPA was supposed to decide by December 1st on a petition from Growth Energy and 54 ethanol manufacturers to let gasoline contain up to a 15-percent ethanol blend. In a letter from the EPA to Growth Energy, they stated that it is vitally important that the U.S. increase the use of renewable fuels. In an effort to meet that goal, the EPA is working to implement the long-term renewable fuels mandate of 36 billion gallons by 2022. It is clear that ethanol will have to be blended at higher levels than the current 10-percent limit to achieve the renewable fuel requirements in future years.

Before approving the E15 (15% ethanol), the EPA wants to make sure they have all of the necessary science to make the right decision. Although not all of the studies have been completed, the EPA's engineering assessment as of the end of November indicates that the robust fuel, engine and emissions control systems on newer vehicles will likely be able to accommodate higher ethanol blends, such as E15.

The EPA is currently evaluating the question of vehicle component durability when E15 is used over thousands of miles, and there is an ongoing study by the Department of Energy (DOE) that will provide critical data on the issue. According to the DOE, this program involves the complete testing of 19 vehicles to examine the long-term emissions impacts of higher ethanol blends on newer motor vehicles, and is expected to be completed in 2010. At the current time, data is only available on two vehicles, but testing is expected to be completed on an additional 12 vehicles by the end of May. As a result, the EPA expects to have a significant amount of data being generated through this testing program available to them by mid-June. If the test results remain supportive of higher ethanol blends, the EPA would be in a position to approve E15 for 2001 and newer vehicles in the mid-year timeframe. Of course, if the test results highlight potential problems, the decision would need to be delayed until all testing is received and reviewed.

In light of the current testing, the EPA plans to take steps to address the fuel pump labeling issues to ensure consumers utilize the proper gasoline for their vehicles and equipment (such as lawnmowers, boats, etc.), should the use of ethanol blends greater than 10 percent be approved. The EPA is initiating a process to assess how pump labeling requirements might be extended to fuel distributors. They are pulling together a working group to examine and address labeling issues to allow final requirements to be put in place after a renewable fuels waiver decision has been made.

On another note relating to renewable fuels, in a recent letter, the National Biodiesel Board (NBB) pushed the EPA to implement mandatory 2009-2010 "biomass-based" diesel volumes under the federal renewable fuels standard (RFS) by January 1st. The RFS, as revised in 2007, requires the use of 500 million gallons of biomass-based diesel in 2009, 650 million gallons in 2010, 800 million gallons in 2011, and one billion gallons in 2012. Biodiesel from soybeans is a domestically and commercially produced fuel that currently meets federal criteria for the bio-based diesel. According to the NBB, the EPA can implement the biomass-based diesel program by issuing an appropriate renewable "volume obligation" specifically for biodiesel. iBi