EPA Refuses to Lower Ethanol Quota

Agency denies request by Texas governor
By Nick McMaster,  Newser Staff
Posted Aug 7, 2008 2:50 PM CDT
Rodney Gaffney fills his flexible-fuel pickup with E30 gasoline on Friday, June 20, 2008, in Granite Falls, Minn.    (AP Photo/Elizabeth Dunbar)
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(Newser) – The EPA refused to cut a minimum ethanol quota today, despite critics’ charges that the biofuel mandate is driving high food prices, the New York Times reports. The agency approved Congress’ quota that requires the US use 9 billion gallons of ethanol in gasoline blends this year, denying Texas Gov. Rick Perry’s request to shrink it.

It remains unclear what effect the quota will have—high oil prices this year have driven ethanol production higher than the quota, but if oil retreats, high corn prices could render ethanol unprofitable. Current automobiles can accept blends of gasoline and up to 10% ethanol, but carmakers hope to greatly increase the usable percentage of ethanol in coming years.