A leaked document from the U.S. Envionmental Protection Agency (EPA) has started a furer of debate regarding the regulatory's agency's plans for ethanol content in gasoline next year.  Indeed, all appeared ready to go as early as this year for increasing the ethanol content in fuels to 15% (E15), but nothing ever happened.

Late last week Reuters news agency reported that EPS documents showed the agency proposing an unexpected drop in the amount of corn-based ethanol that would be required for blending in fuels next year.  This year was a banner year for the U.S. corn crop and you can imagine how farmers and ethanol producers reacted to the news.

In an effort to quell the fires, the EPA's administrator Gina McCarthy issued a statement saying, "At this point, EPA is only developing a draft proposal," noting that the Obama administration was still "firmly committed" to developing biofuels as part of its plan to reduce the nation's dependence on foreign oil.

While there is nothing concrete, it would appear that the EPA has been forced to readdress the entire E15 situation.  Reports indicate that the latest proposal acknowledges some of the challenges related to increasing the use of ethanol in gasoline.  Under the current proposal, according to reports, the EPA appears to back the oil industry's argument that it isn't feasible to inject more than 10% ethanol into gasoline at the moment because of concerns related to damaging some automobile engines.  This is the same arguement that automakers have consistently made in attempts to defeat the administration's original proposal. 

It would also appear that testing, which the EPA said it has performed on the use of E15, was not valid.

The new proposal, when ready, will be issued for public comment, so get ready for another firestorm of debate.

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