EPA proposes reduced ethanol blends

The Obama administration is proposing to reduce the overall amount of ethanol blended in the nation’s gasoline in coming years, a potential blow to renewable fuel companies that have pushed to keep high volumes of their product flowing into drivers’ gas tanks.
The move by the Environmental Protection Agency (EPA) is unlikely to mean much for consumers or prices at the pump, but the ethanol policy has been popular in farm states like Minnesota that have profited over the years from higher corn prices linked to the use of corn-based ethanol.
But the added value that ethanol has given to corn prices also provides important additional revenues for farmers during downturns in commodity prices, the case for the past couple years now. Revenue earned from their investment in ethanol plants has further provided an important source of income at times as well.
The EPA’s new mandated ethanol blend targets are at 13.5 billion gallons for 2015 and 14 billion gallons for 2016; both well below the 14 billion gallons required by Congress in each of those years.
Advanced biofuel targets would be severely reduced. Advanced biofuels sources include switch grass, agricultural waste such as corncobs and corn stalks, algae, and cooking fats.
 
Photo:  In amending the targets set by Congress, the EPA said the targets couldn’t be achieved, partly due to limitations on the amount of non-ethanol renewable fuels that can be produced. Further, next-generation biofuels, made from agricultural waste such as wood chips and corncobs, have not taken off as quickly as Congress required and the administration expected.