Plan To Raise Ethanol Standard Draws Resistance

The EPA’s plan to increase the amount of ethanol used in fuel is drawing criticism from experts who say doing so would hurt consumers.

Earlier this year, the agency was close to announcing that it would legalize the use of E15 fuel, or fuel that is 15% ethanol, 85% gasoline. That announcement was delayed, however, when the EPA decided it would take more time to test how newer engines – those manufactured after 2007 – and smaller engines handled the use of the higher blend of fuel. The estimate now is that the EPA will make the decision sometime this fall, perhaps as early as late September.

Currently in the U.S., ten states have mandates requiring all fuel to contain at least 10% ethanol, or E10 as it is known. In other states, the use of E10 is optional. In the U.S., corn is the main ingredient used for producing ethanol fuel. It’s because of this that some say raising the ethanol content in fuel would have a profound impact on everyday consumers.

“My concern is that we have a limited supply of corn,” said Bill Lapp, founder of an organization called Advanced Economic Solutions. “When you have demand exerted on the corn market [the price] tends to go up.”

Lapp, a former VP with ConAgra whose current company does consulting for food companies, said the net effect of E15 will be higher food prices across the board.

“We saw this in 2007 and 2008 when [corn] supply became tight because of ethanol demand being boosted back then.”

Since the EPA revealed last December that initial tests showed new vehicles would “likely be able to accommodate higher ethanol blends, such as E15,” an intense lobbying battle against the move has taken shape. Automakers have said ‘no’ to E15 on the grounds that it will damage engines, while food manufacturers have stood uniformly opposed due to price concerns. Moreover, environmental groups have said the higher fuel blend will create more pollution. Yet, backed by ethanol producers and farm state lawmakers, the EPA has moved forward with its testing.

Lapp says he’s holding out hope that enough push-back will force the agency to change its mind. Others, however, aren’t so optimistic.

“Unfortunately, the EPA will probably still wilt under pressure and legalize E15, wrote Matt Purple of the conservative American Spectator in a recent blog post.