Archer Daniels Midland Co. (ADM), Cargill Inc. and 18 other companies received approval from the U.S. Environmental Protection Agency to market ethanol in a 15 percent blend with gasoline.
The approval comes more than 14 months after President Barack Obama’s administration approved a waiver from the ethanol industry to boost the allowable limit from 10 percent.
“For over 30 years ethanol has been blended into gasoline, but the law limited it to 10 percent by volume for use in gasoline-fueled vehicles,” the agency said in an e-mailed statement. “Registration of ethanol to make E15 is a significant step toward its production, sale and use” in cars and light trucks produced in model year 2001 and later.
Growth Energy, an ethanol trade group, and the Renewable Fuels Association pushed for the EPA to approve a waiver lifting the limit in March 2009 to help an industry that saw at least a dozen companies seek bankruptcy protection in 18 months.
E15 “has great potential,” said Bob Dinneen, president of the association. “It doesn’t mean marketers across the country are going to start offering this everywhere. Some are going to take a step back and see how consumers adapt to it.”
Ethanol is mixed with gasoline to extend supplies and help reduce U.S. dependence on crude oil. This year, gasoline prices on the New York Mercantile Exchange have surged 26 percent to $3.3822 a gallon.
Gasoline’s premium to ethanol touched a record $1.251 a gallon on March 29, giving refiners an incentive to use more of the biofuel to pocket the difference between the two, Dinneen said.
Growth Energy, in an e-mailed statement, said filling stations in the corn-rich Midwest may be the first to start selling E15, perhaps this summer. The grain is used to make ethanol in the U.S.
Under a 2007 law, the U.S. is required to consume 13.2 billion gallons of ethanol this year and 15 billion gallons by 2015. The industry has the capacity to produce 14.7 billion gallons from its 210 refineries, according to the Renewable Fuels Association.
“To enable widespread use of E15, the Obama Administration has set a goal to help fueling station owners install 10,000 blender pumps over the next 5 years,” EPA said.
Stockpiles of the biofuel fell 0.4 percent to 22.6 million barrels in the week ended March 23 from a record 22.7 million the previous seven days, the Energy Department said in its most recent inventory report.
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