EPA to scale back ethanol mandate?

by Drew Thornley

It’s the rarest of rare moments when we can highlight something remotely sensible from the EPA, so this is worth noting. According to today’s WSJ, the EPA has plans to look into reducing the volume of ethanol that must be blended into our nation’s gasoline:

Because Americans are continuing to drive more fuel-efficient cars, U.S. gasoline consumption is expected to fall this year. At the same time, a 2007 law calls for rising use of ethanol, which makes up about 10% of the U.S. gasoline supply, and other fuels defined as renewable. That means the U.S. is heading toward the “blend wall,” the point at which fuel marketers can’t absorb any more ethanol into the gasoline supply without using higher-percentage ethanol blends that aren’t widely sold.

As a result, on Tuesday the agency said that next year it would take the unprecedented step of seeking to reduce the amount of renewable fuel that the oil industry must use, saying it “does not currently foresee a scenario in which the market could consume enough ethanol.”